Question
I just got one of the "fine print" mailings from Citibank and it states that starting 4-2-05 they are going to charge a "3% Finance Charge" for the transaction fee.
I think it used to be 2%.
I assume ATM's are still the way to go in Europe whenever possible.
Answer
My experience with my Citibank AA account is that Citibank used to add 2% onto the balance that Visa Internatonal submitted, which already had a 1% fee included.
This means that foreign charges on my Citibank account got hit with a 3% fee!
It looks like the new fee will be 1%+3%=4%
Answer
Also, note that previously it was described as a service fee, but now it's a FINANCE CHARGE. The 3% FINANCE CHARGE does not reflect an increase: it's the same as the old 1% Visa/MC fee plus the old 2% Citibank fee.
Also, Customer Service says that the service fee will now be listed separately on the statement so that you know exactly how much you're paying. I'd be willing to bet that this is all a result of those class action lawsuits last year about "lack of disclosure" of these fees.
Answer
Sorry but I am confused. Regardless of what these fees are called, will I be paying more on my foreign currency purchases than before or not?
RKDuke
Answer
As far as I can tell, there has been no change to the amount of the fee.
Answer
As far as I can tell, there has been no change to the amount of the fee.
Actualy this is not totaly correct as Mastercard (or Visa) is not longer adding 1% to the conversion rate they use and than the bank 2% (which is a little bit more than 3%).
Now you get the goverment approved rate or interbank rate or wholesale currency rate charged and than your bank adds 3%.
The problem there is that you don't see this cost for each item, it is now shown as a total in one line as Finance Charge, hence it is distorting a the cost you see on your bill .
Funny is however that my "sub-prime" cards are only adding 1% while my prime cards are adding 3%.
So if you spend 75.53 Euro in the past you got 101 $ charged by visa or mastercard plus 2.02 $ by your bank and the total of the item was then 103.02 $ and shown as such on your statement (for the most banks).
Now the item will show as 100 $ and somewhere at the list of your finance charges there will be a 3$ charge. In effect this is saving you 0.02$ :D
My BoA Visa DEBIT card had this principle a long time, they lined staying with that example 101 $ for the item and at the end of the month they hit me with 2.02 fee as a seperate line item.
I find that bad as I travel a lot in Europe and now travel expenses get worse as I need to add 3% to each line item which than does not match the bill so I now need to make more work in converting.