Citi now charges 3% on ALL foreign purchases (even in USD)
I have a small website hosted by a company in New Zealand. They bill me in USD and I've had the charge billed to my Citi Mastercard every month for several years with no issues.
On my March statement, I noticed Citi charged me a 3% "foreign transaction fee." I just called them and they said the 3% foreign transaction fee now applies to any charge made outside the US, even those in USD.
I guess I need to move that billing over to Schwab...
Even more ridiculous is that these fees can pop up in places where you wouldn't expect them.
Consumerist reported a little while ago that someone was charged a fee for booking an airline ticket on Expedia (because the charge was processed by Qatar Airlines, not Expedia).
And my latest Citicard statement has a foreign purchase fee for a reservation at a bowling alley in New York City. Turns out the bowling alley's website uses a credit card processor based in Denmark, so Citi see it as overseas.
Meanwhile, over on the AC forum, there are reports of BofA similarly charging a 3% fee to Aeroplan credit card holders for buying tickets on Air Canada through AC's US website.
This is patently absurd. I wrote an e-mail to the head of credit cards at Citi pointing out how absurd this fee is given how international our economy is these days. If a bowling alley in NYC uses a Danish credit card processor for its reservations, ANY purchase I make could turn out to be "foreign" and thus subject to the 3% fee (a purchase at H&M could be processed in Sweden, a purchase at the Sony store could be processed in Japan, etc.). I have absolutely no way of divining whether any particular purchase will be domestic or foreign, and thus I am strongly considering dumping my Citicards.
I got a prompt phone call from Citi's executive customer service acknowledging my concerns, but not offering anything. I asked them to take off the fees they've charged me (which they did as a "one time" favor), and asked them to get rid of this fee going forward (which they said they'd look into, but couldn't promise).
But seriously, this may be the end of the line for me and Citi.
Over on Cruise Critic, there is an ongoing thread about the Foreign Exchange Fees. Think about a $8-10K cruise and getting hit with the 3%. The cruise line is based in Florida and naturally charges in USD. In this case, the cruise line uses EITHER a US based bank to process charges OR a bank based in Ireland. Depending on which bank they happen to use for your specific payment, you may or may not get hit with the 3% charge.
With these stupid fees now in vogue, I have a question for the people with Visa/MC and a foreign address, i.e. UK resident. Do you get this nuisance fee when you purchase goods from outside your country of address? Even more silly do you get hit with it while still in the Euro zone if you have an address in the Euro zone?
A lot of these issues callout for a billing error dispute on the fees. And, a complaint to your Congressional Representative and the FRB.
I am a fan of billing error disputes on forex charges because I have had great success with them. And, when one bank ignored such disputes I was involved in a case that cost them some big bucks.
With these stupid fees now in vogue, I have a question for the people with Visa/MC and a foreign address, i.e. UK resident. Do you get this nuisance fee when you purchase goods from outside your country of address? Even more silly do you get hit with it while still in the Euro zone if you have an address in the Euro zone?
Or are we US residents the only unlucky people?
UK cards used in the EURO zone get hit with, in general, a 2.75% fee. Rather than showing this as a seperate fee, the exchange rate used is adjusted to incorporate the fee.
So for example, say you had a charge of EUR117.64, which at todays rate should be £100. You will find that the rate of exchange used generates a charge in the area of £103, but more than likely, closer to £104.50, as the CC companies tend not to use the optimal interbank rate for the day.
Now I dont know about a French Visa (eur) used in Spain (also eur) - in theory, there should be no surcharge, as a euro is a euro.
But I do know that if you use a debit card from France say in a ATM in Spain, you would get hit with a bank fee for using the ATM (I suppose this is similar to USA using a Chase debit card in a BofA ATM - you get hit with a fee).
