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VivreManger

Credit Card Costs

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I was told by Chase that they didn't apply the 2% foreign currency surcharge, but when I did a test withdrawal in France, I got exactly 2% less money for my withdrawal from the Chase account than I did on another bank account. Unfortunately I made the test on the trip following one in which I paid everything with my ATM/debit card.

Hmmm... MBNA makes the same claim-- I wonder if that is also subterfuge....

By the way, did you ever challenge Chase on the matter?

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One useful resource for comparing this sort of thing is www.oanda.com which has historical exchange rates going back years. It's not enough to look up the rate when you get back, because it might have changed by a percent or two from when you made the transaction.

MBNA swears up and down that they don't add the fee, but I haven't checked any transactions myself.

This may be a bit late, but I would not be sure about being able to use a checking account to withdraw from France. The ATMs I've used do not ask which account you want to draw from, it always comes from checking. While a student I ran out of money because I was hoping to draw from my savings account. Thank goodness someone else was paying for meals and accomodations. Of course, this doesn't mean that a savings-only account wouldn't work, but a prepaid card like Buxx is certainly more reliable.

Walt


Walt Nissen -- Livermore, CA

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Hmmm...  MBNA makes the same claim-- I wonder if that is also subterfuge....

By the way, did you ever challenge Chase on the matter?

I did and they said there must have been a mistake of some misunderstanding. No one admitted to the surcharge on ATM withdrawals, but they gave me a $20 credit. That left me $18 to the good on that withdrawal and at least a hundred dollars in the red on past exchanges for debits and withdrawals as well as insulted. I moved the bulk of my business to the other bank. It's hard to find someone who isn't passing the buck (no pun intended) at any major corporate bank however.


Robert Buxbaum

WorldTable

Recent WorldTable posts include: comments about reporting on Michelin stars in The NY Times, the NJ proposal to ban foie gras, Michael Ruhlman's comments in blogs about the NJ proposal and Bill Buford's New Yorker article on the Food Network.

My mailbox is full. You may contact me via worldtable.com.

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I hope to post a fuller report on this subject, based on a recent trip to Quebec, but my report has been delayed because, among other reasons, I have not had a chance to check my recent bank statements.

The preliminary report based on usage in the province of Quebec is limited to credit card not ATM or, for that matter, debit card transactions.

The MBNA card I was using does not charge BankOne's 2% fee for credit card transactions in foreign currencies.

On the other hand, with regard to full disclosure, MBNA do not provide, as the BankOne statement does, the actual exchange rate on which the transaction is based.

To confirm this I made a purchase which I divided evenly into two different credit transactions. Ultimately the MBNA transaction was 2% cheaper in US Dollars than the BankOne.

On the other hand the exchange rate was insignificantly better by a few ten-thousandths of a per cent for BankOne. However when rounded off to the nearest penny it was in fact the same result. This was a purchase of a few hundred dollars -- I imagine the standard maximum on most single credit card transactions. Even with the infinitesmally different exchange rate, the MBNA card saves money.

It remains to be confirmed that similar savings prevail in Sterling and Euro transactions. That test will have to wait about two or three months.


Edited by VivreManger (log)

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As this earlier thread which I am now reviving demonstrates, US credit card companies have found annoying ways to charge you for services they do not perform.

A few years ago I left United Airlines for MBNA to avoid the 1% charge most companies add on top of the other transaction costs (1% for Visa which handles the foreign exchange). There is no expense for the credit card company itself to justify the charge, but they have gotten away with it. Now MBNA has joined the gougers and I am looking for another card to use, particularly on foreing travel.

Now in 2006 does any one know who does not add the 1% charge?

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There is supposed to be some new disclosure law, where the companies have to say how they arrived at the dollar amount; most banks just give the amount in Euros, and then the amount in dollars, with no formula for how they arrived at the number. It is basically smarmy, but most folks just shake their head and pay up...

One thing for sure, you may have noticed-- Amex is not welcome in France!! Other than Hotels and Rental Cars, it is daunting to try to use an Amex anywhere in France, they must gouge the fees to the merchants. Visa, Master Card, and their European "Carte Bleu" are welcome, though.

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Here is a link that does gather a lot of useful options,

http://www.smartertravel.com/advice/askans...e.php?id=288725

According what Ed Perkins writes, the best credit card deal right now - - and I use now advisedly - - is Capital One. I went to their web site to clarify their options, but unfortunately the two issues that need to be addressed, the extra charge and the alarming practice of dynamic conversion - - in other words allowing the merchant rather than the wholesale market to set the actual exchange rate - - are not addressed. Perkins advice on this subject is rather clueless:

"Merchants are free to use whatever phony rate they choose.

The result is an obvious double markup. You pay both the merchant's currency markup and the bank's surcharge. If the merchant uses an exchange rate that's, for example, five percent below the wholesale rate, your exchange cost could total eight percent—five percent for the merchant plus three percent for the bank, an obvious gouge. Clearly, you should never accept dynamic conversion."

How in the world do you know whether or not "dynamic conversion" is being imposed? Do you have to walk around with the wholesale rate in your head and then ask the merchant what he is charging?

Does anyone have the Capital One phone number handy?

As it turns out after posting that, I checked my mail to find two Capital One credit card offers clogging the box. I called the first number about the offer and they did not know about dynamic conversion, but they did claim no added charges on foreign credit card exchange transactions.

As for dynamic conversion, the representative was quite surprised to hear about it, but could do nothing but offer the general customer service number 800-548-4593.

I did call customer service who promptly contradicted the other marketer. The second representative claimed that Capital One does charge 1% on top of the international charges.

Re: AmEx in France, over the years my experience has been inconsistent. Certainly MC and Visa (Carte Bleue) are widely accepted, but sometimes AMEx has worked better. One of those machines refused my Visa card, but happily billed the AmEx.


Edited by VivreManger (log)

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I called customer service a second time and was told that there is no extra charge on foreign credit card charges, "aside from what the merchant imposes". Whatever that means. Unfortunately the companies will not send the fine print unless you sign up for their cards. That strikes me as a classic bait and switch.

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I called customer service a second time and was told that there is no extra charge on foreign credit card charges, "aside from what the merchant imposes".  Whatever that means. 

Many merchants, particularly in Asia, will add the credit card commission to your total if you pay by credit card. For example, in Bali, many of the smaller stores which accept credit cards will add 1 or 2% to your charge to cover their commission. I also know of at least one discount travel agent in Canada (Winnipeg, specifically) that does this (I'm sure there are others).

As far as I know, this is actually against most credit card companies' merchant agreements and you can (if you can prove it) apply to have the extra charge reversed.

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To the best of my knowledge, CapitalOne and HSBC do not add to the Visa or MC 1% on either credit cards, debit cards or ATM cards. I believe Commerce Bank cards are free of surcharges. Of these, CapitalOne may be the only nationally available card. The other two may only be available regionally if there's a bank in your area.

I got hit with the dynamic conversion thing a year or so ago in Spain because I hadn't heard about it and didn't know what to look for. It seems to be on a bank by bank basis. That is, some hotel bills of a particular chain of Spanish hotels, had the charge in dollars, while others had it in dollars because they used different banks to process their accounts. On the other hand, I'm pretty sure that all charges handled by certain banks were in dollars. There is a little note at the bottom of the receipt you are given to sign saying the charge has been converted to dollars, but it didn't dawn on me that it was by the originating bank and that the rate was in excess of what my bank would have charged. On a recent trip to Italy, all charges were in Euros, with the exception of one charge of about ten dollars for which my wife signed and which wasn't worth arguing about. However, I am under the impression that you have the right to have the charge made to your account in the local currency and that if you are presented with a slip in dollars in a euro country, you can demand the cherge be reversed and a new charge made in euros. Perhaps the best thing is to inform the waiter, clerk, etc. that you want your charge made in local currency before he takes the card, once you discover you are in a country where the dynamic currency conversion scam is prevalent.

The sad thing is that most bank executives in the US really have no idea how this all works and what happens to a traveler abroad carrying the bank's cards.


Robert Buxbaum

WorldTable

Recent WorldTable posts include: comments about reporting on Michelin stars in The NY Times, the NJ proposal to ban foie gras, Michael Ruhlman's comments in blogs about the NJ proposal and Bill Buford's New Yorker article on the Food Network.

My mailbox is full. You may contact me via worldtable.com.

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Here is a link that does gather a lot of useful options, 

http://www.smartertravel.com/advice/askans...e.php?id=288725

According what Ed Perkins writes, the best credit card deal right now - - and I use now advisedly - - is Capital One.

. . . .

I disagree with some of what Ed Perkins has to say on the subject. To his credit, he notes that charges in constant flux and it's obvious we could both be right or wrong and not agree simply because we've gotten our information at different times from different sources at the same bank. Honestly, the bank reps don't know the details. Years ago I had an interesting conversation with the V.P. in charge of credit cards for one of the very major banks. He had no explanations for why my card would, or would not work at ATMs in Tokyo. The other thing that was evident to me, was that the logo on the machine was not a valid clue. Sometimes I couldn't get cash from a machine with my bank's network logo and sometimes, I could make a withdrawal at a machine without that logo.

I believe my HSBC cards do not add a surcharge. I will note that HSBC has changed the wording on their agreement so that it's not as clear as it could be. I tend not to make any distinction between ATM, debit and credit cards because in my experience, if the charge shows up on one card, it's usually going to show up on all of the bank's cards. Many years ago I stopped using a Chase credit card in favor of their debit card simply because a rep told me the surcharge was only on credit cards. A careful examination of my accounts when I return, suggested a loss of about 2% on average from my debits and withdrawals. I opened an account elsewhere.

The fee to use a foreign ATM is usually tied to the size of your deposits at the bank. Premium accounts with larger minimum balance requirements usually waive such fees at many banks. It is against Visa and MC policy for a bank to charge a fee to overseas users of their ATM. In NY you will see notices to that effect on ATMs. No fee if you're a bank customer, using that bank's card and no fee if you're a foreigner. Others get hit with the fee. Canadians pay like a native, or so I assume as I was charged a fee in Canada.

Most of all, I disagree that merchants are free to use any fee. As I noted above, it's the bank and not the merchant who sets the fee and keep the ill gained percentage on dynamic conversion. I agree with Perkins when he says "you should never accept dynamic conversion." To answer to VivreManger's "How in the world do you know whether or not "dynamic conversion" is being imposed?" it's simple, if the local currency is not the one that appears on the bottom line of the slip you sign, dynamic conversion is likely the reason.


Robert Buxbaum

WorldTable

Recent WorldTable posts include: comments about reporting on Michelin stars in The NY Times, the NJ proposal to ban foie gras, Michael Ruhlman's comments in blogs about the NJ proposal and Bill Buford's New Yorker article on the Food Network.

My mailbox is full. You may contact me via worldtable.com.

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I used my MBNA credit card in Finland last summer, after everyone started saying they were now charging fees, and I did not see any fees on the bill and the exchange rate used seemed correct. And with the cash back they offer of a 1/2% it stills seems like a great card to used overseas for me. I also have a Chase One Pass card simply because it offers what I think is a great insurance coverage when renting cars. Even though there is a pretty high annual fees and I only rent cars about once every two years (for about 1 month) I think it saves me about 500 USD everytime I have that long rental.

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I used my MBNA credit card in Finland last summer, after everyone started saying they were now charging fees, and I did not see any fees on the bill and the exchange rate used seemed correct.

MBNA probably instituted the charge later. Last November in Paris their 2% surcharge

was in force and it was itemized as such on my bill. That's on top of the MC 1% charge. I don't use their card for non dollar purchases. What I'd like to see is a multi-currency card;if not a credit card, at least a multi currency debit card with interbank exchange rates. If anyone knows of one please post.

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I know that Bank of America allows customers to use certain ATM's at foreign banks without paying any fees on either ends. In France, BNP is their affiliated bank, and Barclay's is in England. Other no-fee B of A banks are Deutschbank and Scotiapank.

Since there things change, it's worth checking with your bank, but it's far cheaper than paying the whopping 3% that many of the credit card companies charge.

You can also ask your bank to increase your limit prior to your trip. That way even if you do have to use ATM's and pay a fee, you can make fewer withdrawls.

BTW: I've noticed an increase in US credit cards being denied, another reason to think about using an ATM card (although you'll have to carry cash around). This is due to fraud, since US credit cards are becoming more suspect (due to the fact that US bank and credit card companies have an information-rich magnetic strip and can and do sell and share personal information about you freely) whereas the cards in Europe use a 'puce' which doesn't have that information, nor can they share your information unless you have a problem with your credit standing.

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I know that Bank of America allows customers to use certain ATM's at foreign banks without paying any fees on either ends. In France, BNP is their affiliated bank, and Barclay's is in England. Other no-fee B of A banks are Deutschbank and Scotiapank.

Since there things change, it's worth checking with your bank, but it's far cheaper than paying the whopping 3% that many of the credit card companies charge.

You can also ask your bank to increase your limit prior to your trip. That way even if you do have to use ATM's and pay a fee, you can make fewer withdrawls.

BTW: I've noticed an increase in US credit cards being denied, another reason to think about using an ATM card (although you'll have to carry cash around). This is due to fraud, since US credit cards are becoming more suspect (due to the fact that US bank and credit card companies have an information-rich magnetic strip and can and do sell and share personal information about you freely) whereas the cards in Europe use a 'puce' which doesn't have that information, nor can they share your information unless you have a problem with your credit standing.

There may be no " fee" , supposedly, but they can get you on the exchange rate! Until these banks are required to break down their formula of exactly how they made the switch from Euros to Dollars, they can say whatever they want, and you really can't validate the veracity of the statements...

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There are just about no "credit cards" in France; they are all debit cards, tied to your bank account, and they have had that circuit chip on them for many years. That's why restaurants use that portable machine that they bring to the table so that you can input your PIN.

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I don't think that is correct. I am pretty sure that US credit card (as opposed to debit cards) work in France. I clearly remember using my US credit card without a pin at the same registers where French cards required one.

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I don't think that is correct.  I am pretty sure that US credit card (as opposed to debit cards) work in France.  I clearly remember using my US credit card without a pin at the same registers where French cards required one.

Yes, of course, US non-pin credit cards are accepted in France. But your original post stated "French credit cards", so I assumed you menat the ones available to French residents.

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