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Old Aug 28, 12, 12:44 pm   #1
 
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Cathay Pacific USA internet booking triggered foreign transaction fee

I recently booked a one-way ticket from LAX to BLR via HKG on Cathay Pacific's USA website. On my statement, I noticed I have been charged 3% foreign transaction fee. It came around $31 since ticket was little more than $1k.
I had used Citi Amex AAdvantage card which is issued by Citi bank USA. This is my 4th trip in 4 years on CX. I was never charged a foreign transaction fee on CX before.

First of all, my statement clearly states Cathay Pacific Los Angeles. I have been calling back to back Citi customer service and Cathay Pacific Internet booking support. While Citi claims Cathay Pacific has run the transaction from Hong Kong, Cathay Pacific denies that and states that booking was made from Los Angeles in USD. Basically, both of them are giving me a run around and neither of them is ready to fix. I'm not sure who is at fault.

BTW, I noticed that Cathay Pacific's website states that all internet bookings are approved from their HQ (Hong Kong). May be their transaction really went through Hong Kong bank.

Since it's not a big amount I'm going to give up. But I will avoid using Cathay Pacific's Internet booking and Citi card on airline tickets in the future.
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Old Aug 28, 12, 1:06 pm   #2
 
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Billed from CX in Lantau. Did you get a line detail like this from Citi?

xx/06/2012 CATHAY PACIFIC TICKETING HONG KONG HK HKD 712.41 DR USD 90.00 DR

(This is my MPO redemption list clearing fee, which I must pay in USD despite being a HK-based MPO member with a HKD credit card. When I paid with my CX HK Amex, it used to even say Lantau HK specifically).

Assuming this is what CX did to you (at the backend at least), yes the foreign transaction fee will apply.

CX's being a skinflint in terms of cost but also perhaps trying to avoid compliance issues with offshore USD processing. And Citi's trying to claw back the miles by whatever underhanded way they have (how do you know a US$ transaction wlil be processed onshore or offshore?). With our cards here, we have foreign transaction fees for Mastercard but not Visa or Amex. Using MC to pay for HK$ overseas only incurs 0.95%, but we get out of it by using Visa which is foreign transaction-fee free.
Not much you can do about it except use a card with no foreign transaction fee next time.

Last edited by percysmith; Aug 28, 12 at 8:10 pm..
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Old Aug 28, 12, 1:38 pm   #3
 
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Chase's Sapphire Preferred Visa gives double miles for travel (i.e. air tickets) and has no foreign transaction fees. Ime they also have vastly superior CS support. [This unsolicited advice comes from a longtime Citigold customer for whom Citi AAdvantage cards have been free from annual fees, but still only uses the cards when flying on AA....]
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Old Aug 28, 12, 1:50 pm   #4
 
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Quote:
Originally Posted by percysmith View Post
Billed from CX in Lantau. Did you get a line detail like this from Citi?
That's the worst part. Citi did not provide me the details of the charge. They didn't even mention if they charged in HKD. I'm suspecting Citi is just trying to make some quick buck by giving a lame reason that Cathay is headquartered outside of US.
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Old Aug 28, 12, 1:54 pm   #5
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Quote:
Originally Posted by kramerican View Post
That's the worst part. Citi did not provide me the details of the charge. They didn't even mention if they charged in HKD. I'm suspecting Citi is just trying to make some quick buck by giving a lame reason that Cathay is headquartered outside of US.
Assuming there's not remark stating the charges will be in HKD, can you dispute the purchase? CX quotes the charge in USD for you and that's the amount you agreed to pay for. But instead they charged you in HKD without informing you.
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Old Aug 28, 12, 2:33 pm   #6
 
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Just my 2 cents, but frequently on any site connected to a foreign anything, the USD amount is just a display overlaid with a transparent conversion. The actual charge is done in foreign $$ and you just can't see it. This includes anything they say is charged in $USD.
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Old Aug 28, 12, 5:53 pm   #7
 
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Originally Posted by 7Continents View Post
Just my 2 cents, but frequently on any site connected to a foreign anything, the USD amount is just a display overlaid with a transparent conversion. The actual charge is done in foreign $$ and you just can't see it. This includes anything they say is charged in $USD.
This is not Dynamic Currency Conversion if that's what you're referring to: Using Credit Cards in China - The Great CC Rip Off (dynamic currency conversion)

Happens in Hong Kong but will not happen to an Amex card - Amex doesn't allow DCC transactions on its cards (only Visa/MC).

Last edited by percysmith; Aug 28, 12 at 6:11 pm..
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Old Aug 28, 12, 5:56 pm   #8
 
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Originally Posted by JALPak View Post
Assuming there's not remark stating the charges will be in HKD, can you dispute the purchase? CX quotes the charge in USD for you and that's the amount you agreed to pay for. But instead they charged you in HKD without informing you.
This is probably not done in HKD.

OP is subject to the charge because CX charged him USD in HK (foreign transaction charge)

Not because CX charged him HKD in either HK or the US (foreign currency transaction charge)

Last edited by percysmith; Aug 28, 12 at 6:10 pm..
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Old Aug 28, 12, 6:58 pm   #9
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Originally Posted by percysmith View Post
This is probably not done in HKD.

OP is subject to the charge because CX charged him USD in HK (foreign transaction charge)

Not because CX charged him HKD in either HK or the US (foreign currency transaction charge)
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Old Aug 29, 12, 1:26 pm   #10
 
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Quote:
Originally Posted by percysmith View Post
This is probably not done in HKD.

OP is subject to the charge because CX charged him USD in HK (foreign transaction charge)

Not because CX charged him HKD in either HK or the US (foreign currency transaction charge)
Makes sense. However, customer will have no clue about this while purchasing ticket through CX's site. If it were in foreign currency you would know upfront that there will be a transaction fee unless CC waives that.

Worst part is, CX internet support kept denying the fact that ticket was approved/purchased in HKG. She even suggested me to talk to the bank manager to get the fee waived
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Old Aug 29, 12, 6:11 pm   #11
 
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Quote:
Originally Posted by kramerican View Post
Makes sense. However, customer will have no clue about this while purchasing ticket through CX's site. If it were in foreign currency you would know upfront that there will be a transaction fee unless CC waives that.

Worst part is, CX internet support kept denying the fact that ticket was approved/purchased in HKG. She even suggested me to talk to the bank manager to get the fee waived
Get a receipt for the transaction http://www.cathaypacific.com/cpa/en_...etpurchase/pay ? Does that help show who billed?
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Old Aug 29, 12, 6:36 pm   #12
 
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Quote:
Originally Posted by kramerican View Post
Makes sense. However, customer will have no clue about this while purchasing ticket through CX's site. If it were in foreign currency you would know upfront that there will be a transaction fee unless CC waives that.

Worst part is, CX internet support kept denying the fact that ticket was approved/purchased in HKG. She even suggested me to talk to the bank manager to get the fee waived
it seems complete crap for me that you'd have to pay an extra $30 which you aren't supposed to pay
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Old Aug 29, 12, 7:55 pm   #13
 
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Originally Posted by QRC3288 View Post
it seems complete crap for me that you'd have to pay an extra $30 which you aren't supposed to pay
Just checked my line entry for VS ticket bought online:

xx/08/2012 xx/08/2012 VIR ATLxxxxxx2671 VIRATL.COM HKHK HKD 9,3xx.00

For a ticketing transaction, it's processed locally
(Even tho VFC fees gets processed in the UK)

Shame on CX not to have local processing
(But then again easier to open and maintain an account in HK than the US)
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Old Aug 29, 12, 10:03 pm   #14
 
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http://www.washingtonpost.com/wp-dyn...2900927_2.html

Quote:
Oops. No way did the credit card companies want to lose out on their hefty fees. Visa International took in $424 million in currency exchange fees for the fiscal year that ended September 2004, according to Robertson of the Nilson Report. That's nearly 30 percent of its annual revenue, he said.

This past April, Visa began adding a 1 percent fee onto any foreign transaction, whether dynamically converted to dollars or charged in local currency. But then in June, it suddenly rescinded the move, and went back to the previous policy of charging a 1 percent fee only on transactions made in foreign currency. In a statement, Visa said it made the change to "address issues raised by cardholders, merchants, and member financial institutions." In other words, almost everybody was upset. The company is "now reviewing the fee structure related to single-currency cross-border transactions," according to Rhonda Bentz, Visa's vice president of public affairs.

MasterCard currently charges 1 percent on foreign currency transactions only, but has announced that, in October, it will switch to charging 0.8 percent for all foreign transactions, with an additional 0.2 percent fee for transactions made in foreign currency.

Hefty Penalties

Whether you get socked with these fees -- and more -- all depends on the bank that issues your credit card. Some issuing banks, such as MBNA [and Citi, in this case], are charging fees on any foreign transaction, regardless of whether you pay in dollars or local currency. According to MBNA spokesman Jim Donahue, the company levies a flat 3 percent fee on every foreign transaction; in the case of a charge made in foreign currency, MBNA absorbs Visa's 1 percent currency conversion fee.
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Old Aug 29, 12, 10:04 pm   #15
 
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Same with MH on Citibank US card:

http://www.credit.com/blog/2009/04/f...nsaction-fees/

Other merchants do it, such as
- Paypal US (charge in HK) http://www.fatwallet.com/forums/finance/1067272/ ; and
- Paypal HK (charge in SG) http://www.hongkongcard.com/forum/fo...ow.php?id=5987

Last edited by percysmith; Aug 29, 12 at 10:17 pm..
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