Question
"Of the top 10 card issuers, only Capital One has no fees on foreign transactions. It never added a surcharge of its own, and it has stopped passing along the MasterCard-Visa fee to its cardholders." Also no fees, Amalgamated Bank, BMW Bank, Discover, Tompkins Trest. AmEx 2%. Many others, 3%.
2005 Credit Card Survey, Consumer Action News, Summer 2005.
www.consumer-action.org
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I just got off the phone with Gerard at Capital One. My Capital One Platinum MC has a 1% Foreign Currency Fee. They don't pass along the 2% fee from MC. Better than a lot of others, but not 0%.
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Sounds like you got it backwards. 1% association fee passed through (and no longer opaque in the conversion rate) and no additional surcharge added by Capital One.
-David
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the net charges would be 2% as you get 1% back in the form of cash dividend (provided you are within the annual cap of $300 rebate - technically can extend to $600) only work for relatively small overseas expenses.
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Sounds like you got it backwards. 1% association fee passed through (and no longer opaque in the conversion rate) and no additional surcharge added by Capital One.
-David
I thought MC/VISA charged 2%, not 1%
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I thought MC/VISA charged 2%, not 1%
Nope, to my knowledge, it's always been 1%. Certainly over the last 6 years or so.
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My bank told me that Visa charged customers 1%. Now Visa is charging the bank 1% instead of the customer. So it's up to the bank to either pass on the 1% to the customer or not.
My bank has graciously decided to pass the burden of the 1% to me.
Thus:
1%-->bank-->customer
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My bank told me that Visa charged customers 1%. Now Visa is charging the bank 1% instead of the customer. So it's up to the bank to either pass on the 1% to the customer or not.
That's correct. There were lawsuits alleging that the currency conversion rates + the banks percentage were really a hidden finance charge, so in order to adjust, the currency fees are now broken out as finance charges, including the 1% fee charged by MC or Visa. (The fees used to be hidden in the exchange rate, but aren't any more.)
If your bank has decided to absorb the 1% fee charged by the association, then you're getting the best possible exchange rate, and a very good deal. Which bank is this?
-David
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I thought MC/VISA charged 2%, not 1%
No, they only charged 1% premium over the wholesale exchange rate. Since the conversion is done by Visa/MC, they get the best exchange rates (wholesale). Those wholesale exchange rates are never available to the retail consumer. So even with the Visa/MC 1% fee tacked on to the wholesale rate, we were still getting a very good exchange rate, better than any rate we could ever get by exchanging cash retail, in a booth, store or in a bank.
Banks that charge additional fees are just being greedy in my opinion. They do nothing except bill you at the exchange rate imposed by the association, and the association has taken care of the conversion and all the bookkeeping before sending the transaction to the issuing bank. In short, it's pure profit.
-David
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I just got off the phone with Gerard at Capital One. My Capital One Platinum MC has a 1% Foreign Currency Fee. They don't pass along the 2% fee from MC. Better than a lot of others, but not 0%.
That's odd - I just got off the phone with "Raid," and he said that there is no fee for transactions performed overseas and that they use the market foreign currency exchange rate current at the time of the transaction. Seems very fair to me, though he did indicate that it is necessary to contact Capital One in advance to let them know that you will be using the card overseas, otherwise, there is the possibility that they'd decline charges.
I was considering cancelling this card, but now I think I'll keep it.
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Avoid Citibank credit card because I went to Canada and citibank credit card charge a transaction fee based on your APR plus 3%. I called customer rep and they keep telling me it is only 3%, I asked him to do the math for me and it wind up 19% because my apr is 16% + 3%. I cancelled my citibank cards.
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Avoid Citibank credit card because I went to Canada and citibank credit card charge a transaction fee based on your APR plus 3%. I called customer rep and they keep telling me it is only 3%, I asked him to do the math for me and it wind up 19% because my apr is 16% + 3%. I cancelled my citibank cards.
Huh? The rep is quoting you an effective finance charge or something like that (see LIH Prem's earlier post for details). So if you charge $100 worth of stuff overseas and your APR is 16%, then to be compliant, they have to tell you that your APR is 19% due to the finance charges they impose. But the 16% is only charged if you carry a balance (and it's, of course, imposed through the course of the year).
And I've noticed that Citi actually charges a smidge below 3%. It seems that for each individual purchase, they charge 3% and then round down. Then for the monthly sum, they add that all up. Kinda a weird way to calculate it.
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the net charges would be 2% as you get 1% back in the form of cash dividend (provided you are within the annual cap of $300 rebate - technically can extend to $600) only work for relatively small overseas expenses.
Would the 5% dividend on gas and grocery charges also apply overseas, or do foreign merchants not appear as such? Better to get only 2% instead of paying 3%.