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credit card charges to exchange currency?

credit card charges to exchange currency?

Old Apr 24th 2002, 2:16 am
  #1  
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Default credit card charges to exchange currency?

Both my airline credit cards (USAirways and United) have sent notices that they have started charging 3% on "foreign currency transactions." This seems to eliminate some of the good-rate advantage of using them. Does anyone know if a) it applies to all purchases or just ATM withdrawals, and b) if ALL companies are doing this? (If not, anyone know one that isn't? I don't even care about the extra $ that much, it just annoys me.) Thanks.
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Old Apr 24th 2002, 4:50 am
  #2  
Miguel Cruz
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Default Re: credit card charges to exchange currency?

hess <[email protected]> wrote:
    > Both my airline credit cards (USAirways and United) have sent notices that they
    > have started charging 3% on "foreign currency transactions." This seems to
    > eliminate some of the good-rate advantage of using them. Does anyone know if a) it
    > applies to all purchases or just ATM withdrawals, and b) if ALL companies are doing
    > this? (If not, anyone know one that isn't? I don't even care about the extra $ that
    > much, it just annoys me.) Thanks.

Plenty of credit cards charge closer to 1%.

But ATM withdrawals with credit cards have been a lousy deal for a long time. Much
better to use an ATM card instead.

miguel
--
Hit The Road! Photos and tales from around the world: http://travel.u.nu
 
Old Apr 24th 2002, 5:20 am
  #3  
Hamilton
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Default Re: credit card charges to exchange currency?

In article <[email protected]>, hess <[email protected]> wrote:

    > Both my airline credit cards (USAirways and United) have sent notices that they
    > have started charging 3% on "foreign currency transactions." This seems to
    > eliminate some of the good-rate advantage of using them. Does anyone know if a) it
    > applies to all purchases or just ATM withdrawals, and b) if ALL companies are doing
    > this? (If not, anyone know one that isn't? I don't even care about the extra $ that
    > much, it just annoys me.) Thanks.

it is obscene -- and it applies to all charges -- ATM withdrawals on credit cards pay
much higher interest rates than that generally
 
Old Apr 24th 2002, 5:50 am
  #4  
Hamilton
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Posts: n/a
Default Re: credit card charges to exchange currency?

In article <[email protected]>, [email protected] (Miguel
Cruz) wrote:

    > hess <[email protected]> wrote:
    > > Both my airline credit cards (USAirways and United) have sent notices that they
    > > have started charging 3% on "foreign currency transactions." This seems to
    > > eliminate some of the good-rate advantage of using them. Does anyone know if a)
    > > it applies to all purchases or just ATM withdrawals, and b) if ALL companies are
    > > doing this? (If not, anyone know one that isn't? I don't even care about the
    > > extra $ that much, it just annoys me.) Thanks.
    >
    > Plenty of credit cards charge closer to 1%.

name some -- Wachovia used to not have the charge but it sold out -- we haven't been
able to find one that doesn't charge these extortionate rates

I'd like to get a new card
 
Old Apr 24th 2002, 7:20 am
  #5  
Miguel Cruz
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Default Re: credit card charges to exchange currency?

hamilton <[email protected]> wrote:
    > [email protected] (Miguel Cruz) wrote:
    >> Plenty of credit cards charge closer to 1%.
    >
    > name some -- Wachovia used to not have the charge but it sold out -- we haven't
    > been able to find one that doesn't charge these extortionate rates
    >
    > I'd like to get a new card

Here's a couple transactions from my MBNA card a week or so ago:

Total amount billed on statement : Amount spent in local currency : Rate I received :
oanda.com rate for that day : difference in %

US$29.94 : EUR33.60 : 1.1222 : 1.1329 : 0.9% US$28.99 : UKP20.00 : 0.6898 :
0.6953 : 0.8%

These were purchases and not cash withdrawals.

I'm not sure whether different MBNA cards have different exchange terms; I've had
this one for a few years now.

miguel
--
Hit The Road! Photos and tales from around the world: http://travel.u.nu
 
Old Apr 24th 2002, 9:20 am
  #6  
The Oik
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Default Re: credit card charges to exchange currency?

"Miguel Cruz" <[email protected]> wrote in message
news:[email protected]...
    > hamilton <[email protected]> wrote:
    > > [email protected] (Miguel Cruz) wrote:
    > >> Plenty of credit cards charge closer to 1%.
    > >
    > > name some -- Wachovia used to not have the charge but it sold out -- we haven't
    > > been able to find one that doesn't charge these extortionate
rates
    > >
    > > I'd like to get a new card
    >
    > Here's a couple transactions from my MBNA card a week or so ago:
    >
    > Total amount billed on statement : Amount spent in local currency : Rate I received
    > : oanda.com rate for that day : difference in %
    >
    > US$29.94 : EUR33.60 : 1.1222 : 1.1329 : 0.9% US$28.99 : UKP20.00 : 0.6898 :
    > 0.6953 : 0.8%
    >
    > These were purchases and not cash withdrawals.
    >
    > I'm not sure whether different MBNA cards have different exchange terms; I've had
    > this one for a few years now.
    >
As I've said before, my UK MBNA card SUCKS for rates in eastern Europe, as in 30% off
the real rate. Take care.
 
Old Apr 24th 2002, 11:50 am
  #7  
Beefeater
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Default Re: credit card charges to exchange currency?

I only use my credit-card to withdraw cash in an emergency. That is, when my
debit/ATM card is "empty". It has a nasty habit of happening Then it is down to
lend money with the creditcard. Rates and fees are the same as the ATM/debit piece of
plastic (none!) but they apply a 19,9% intrest rate from day 1 on cash-withdrawals.
And that's not cheap at all. So it's only for emergencies..

beefeater

"hamilton" <[email protected]> wrote in message
news:[email protected]...
    > In article <[email protected]>, hess <[email protected]> wrote:
    >
    > > Both my airline credit cards (USAirways and United) have sent notices that they
    > > have started charging 3% on "foreign currency transactions." This seems to
    > > eliminate some of the good-rate advantage of using them. Does anyone know if a)
    > > it applies to all purchases or just ATM withdrawals, and b) if ALL companies are
    > > doing this? (If not, anyone know one that isn't? I don't even care about the
    > > extra $ that much, it just annoys me.) Thanks.
    >
    > it is obscene -- and it applies to all charges -- ATM withdrawals on credit cards
    > pay much higher interest rates than that generally
 
Old Apr 24th 2002, 11:50 pm
  #8  
Bryan Gros
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Default Re: credit card charges to exchange currency?

[email protected] (Miguel Cruz) wrote in message
news:<[email protected]>.. .
    > hamilton <[email protected]> wrote:
    > > [email protected] (Miguel Cruz) wrote:
    > >> Plenty of credit cards charge closer to 1%.
    > >
    > > name some -- Wachovia used to not have the charge but it sold out -- we haven't
    > > been able to find one that doesn't charge these extortionate rates
    > >
    > > I'd like to get a new card
    >
    > Here's a couple transactions from my MBNA card a week or so ago:
    >
    > Total amount billed on statement : Amount spent in local currency : Rate I received
    > : oanda.com rate for that day : difference in %
    >
    > US$29.94 : EUR33.60 : 1.1222 : 1.1329 : 0.9% US$28.99 : UKP20.00 : 0.6898 :
    > 0.6953 : 0.8%
    >
    > These were purchases and not cash withdrawals.

I've got a United Card through First USA, and another platinum Visa from MBNA.

I called both.

United card said they charge going rate plus 3%. MBNA said they charge noting, but
that the Visa network charges 1%

So that is the same thing you're showing in your post: a 1% difference.

I'm taking the MBNA card.

- Bryan

Bryan Gros bgros <at> aggienetwork <dot> com
 
Old Apr 25th 2002, 3:50 am
  #9  
Don Wilkins
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Posts: n/a
Default Re: credit card charges to exchange currency?

On 24 Apr 2002 01:50:03 GMT, hess <[email protected]> wrote:

    >,;Both my airline credit cards (USAirways and United) have sent notices ,;that they
    >have started charging 3% on "foreign currency transactions." ,;This seems to
    >eliminate some of the good-rate advantage of using them. ,;Does anyone know if a) it
    >applies to all purchases or just ATM ,;withdrawals, and b) if ALL companies are
    >doing this? (If not, anyone ,;know one that isn't? I don't even care about the extra
    >$ that much, it ,;just annoys me.) Thanks.

It applies to all charges on the credit card. It is not difficult to total several
thousand on a two or three week trip overseas. That comes to $30 per thousand which
the credit card company collects for doing just about zilch.

There was an article concerning this topic in the April 23 Wall Street Journal.
Title?... "New Hidden Fees Hit Overseas Travel"

In a nutshell:

Here are the credit cards to take with you

Capital One MBNA Many credit-union cards.

Cards to leave at home

Citibank First USA Providian

American Express charges consumer card holders a total of 2% overseas, while
corporate card holders pay 1.5%.

There already have been a couple law suits slapped on the credit card companies. One
in California goes to trial next month. I suspect that the best that will come out of
the lawsuits is forcing full disclosure and not just in the fine print.

Credit cards still give you the best exchange rates but there are hidden charges
showing up with some cards that are although disclosed in the fine print are hidden
in the charges.
 
Old Apr 25th 2002, 6:20 am
  #10  
Robert Buxbaum
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Posts: n/a
Default Re: credit card charges to exchange currency?

In article <[email protected]>, hess <[email protected]> wrote:

    > Both my airline credit cards (USAirways and United) have sent notices that they
    > have started charging 3% on "foreign currency transactions." This seems to
    > eliminate some of the good-rate advantage of using them. Does anyone know if a) it
    > applies to all purchases or just ATM withdrawals, and b) if ALL companies are doing
    > this? (If not, anyone know one that isn't? I don't even care about the extra $ that
    > much, it just annoys me.) Thanks.

It's likely to apply to credit card purchases and ATM cash advances. Not all credit
cards do this, but all of the advantage or bonus cards do, afaik. American Express
has a 2% fee which is the equivalent of a Visa or MC plus 1% from your bank. Amex has
a Delta Skymiles card and some other program with miles or other bonuses. Right the
extra charge is annoying as the bank does nothing to earn the surcharge. All it does
is pass on a dollar charge (well for Americans) after Visa or MC handle the exchange.

One credit card that has no fee and no added roeign currency surcharge is HSBC USA.

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Old Apr 25th 2002, 6:21 am
  #11  
Robert Buxbaum
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Posts: n/a
Default Re: credit card charges to exchange currency?

In article <[email protected]>,
[email protected] (hamilton) wrote:

    > In article <[email protected]>, [email protected] (Miguel
    > Cruz) wrote:
    >
    > > hess <[email protected]> wrote:
    > > > Both my airline credit cards (USAirways and United) have sent notices that they
    > > > have started charging 3% on "foreign currency transactions." This seems to
    > > > eliminate some of the good-rate advantage of using them. Does anyone know if a)
    > > > it applies to all purchases or just ATM withdrawals, and b) if ALL companies
    > > > are doing this? (If not, anyone know one that isn't? I don't even care about
    > > > the extra $ that much, it just annoys me.) Thanks.
    > >
    > > Plenty of credit cards charge closer to 1%.
    >
    > name some -- Wachovia used to not have the charge but it sold out -- we haven't
    > been able to find one that doesn't charge these extortionate rates
    >
    > I'd like to get a new card
    >

HSBC USA. I've been told that they're trying to hold to an international policy. They
have affiliated banks worldwide, although not in every country.

--
Food/Wine/Travel web sites http://www.worldtable.com
http://forums.egullet.com/ikonboard....ff;act=SF;f=10
 
Old Apr 25th 2002, 7:51 am
  #12  
Calif Bill
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Posts: n/a
Default Re: credit card charges to exchange currency?

ATM withdrawals on credit cards are LOANS! With a set of fees added plus the high
interest rate of an unsecured loan. ATM card withdrawals are just like a check,
without the banks having to handle paper and the possibility of no money in the
checking account. It is you r money to start with, not the card companies. Bill

"hamilton" <[email protected]> wrote in message
news:[email protected]...
    > In article <[email protected]>, hess <[email protected]> wrote:
    >
    > > Both my airline credit cards (USAirways and United) have sent notices that they
    > > have started charging 3% on "foreign currency transactions." This seems to
    > > eliminate some of the good-rate advantage of using them. Does anyone know if a)
    > > it applies to all purchases or just ATM withdrawals, and b) if ALL companies are
    > > doing this? (If not, anyone know one that isn't? I don't even care about the
    > > extra $ that much, it just annoys me.) Thanks.
    >
    > it is obscene -- and it applies to all charges -- ATM withdrawals on credit cards
    > pay much higher interest rates than that generally
 
Old Apr 25th 2002, 7:50 pm
  #13  
Steltzjr
Guest
 
Posts: n/a
Default Re: credit card charges to exchange currency?

<< That comes to $30 per thousand which the credit card company collects for doing
just about zilch. >>

Yes, the credit card companies are doing very well. But don't put them down for
"doing about zilch." I remember those old days before credit cards when you had to
spend long lines at banks to get cash or had to waste lots of cash to just exchange
money and spent lots of time trying to figure out exactly your budget so you wouldn't
end up with too much money before before entering another country and starting the
process all over again. With credit card in wallet and ATM access for small amounts
of cash, I save many, many hours of what used to be tedious money business. I'm
willing to pay some percentages for all that time now available for me to enjoy my
traveling.
 
Old Apr 27th 2002, 2:50 am
  #14  
Robert Buxbaum
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Posts: n/a
Default Re: credit card charges to exchange currency?

In article <[email protected]>, [email protected]
(Steltzjr) wrote:

    > << That comes to $30 per thousand which the credit card company collects for doing
    > just about zilch. >>
    >
    > Yes, the credit card companies are doing very well. But don't put them down for
    > "doing about zilch." I remember those old days before credit cards when you had to
    > spend long lines at banks to get cash or had to waste lots of cash to just exchange
    > money and spent lots of time trying to figure out exactly your budget so you
    > wouldn't end up with too much money before before entering another country and
    > starting the process all over again. With credit card in wallet and ATM access for
    > small amounts of cash, I save many, many hours of what used to be tedious money
    > business. I'm willing to pay some percentages for all that time now available for
    > me to enjoy my traveling.

Just bear in mind that some banks add nothing to the 1% taken by the organization
that actually does the work, while other banks add 3% for the same function. I
personally see no reason to give one bank 3% of my trip cost when I don't have to.

--
Food/Wine/Travel web sites http://www.worldtable.com
http://forums.egullet.com/ikonboard....ff;act=SF;f=10
 
Old Apr 28th 2002, 2:50 pm
  #15  
Greg Byshenk
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Posts: n/a
Default Re: credit card charges to exchange currency?

Steltzjr <[email protected]> wrote:
    > Don Wilkins <[email protected]> wrote:

    > > That comes to $30 per thousand which the credit card company collects for doing
    > > just about zilch.

    > Yes, the credit card companies are doing very well. But don't put them down for
    > "doing about zilch." I remember those old days before credit cards when you had to
    > spend long lines at banks to get cash or had to waste lots of cash to just
    > exchange money and spent lots of time trying to figure out exactly your budget so
    > you wouldn't end up with too much money before before entering another country and
    > starting the process all over again. With credit card in wallet and ATM access for
    > small amounts of cash, I save many, many hours of what used to be tedious money
    > business. I'm willing to pay some percentages for all that time now available for
    > me to enjoy my traveling.

You are correct in noting that credit cards and bank cards have made travel easier,
and indeed save time, etc.

That said, the credit card companies are _already_ turning a tidy profit on
transactions before the add-on of a few percentage points. If the transaction is a
credit card sale, then they are _already_ making money on the transaction -- and they
are already charging high fees for cash advances. The "standard" 1% is more than
sufficient to cover any additional costs for currency changes (which approach zero
per transaction). Anything over and above that is just an attempt to skim a bit more
in a way that they hope the consumer will not notice.

And in the case of bank cards, there aren't even any actual costs to the bank for
foreign currency transactions. It's purely a bit of hidden extra profit.

--
greg byshenk - [email protected] - Leiden, NL hate spam? <http://www.cauce.org>
<http://www.byshenk.net/ive.been.spammed.html
 

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