Foreign transaction fees with AAdvantage Visa?
 

Hi - Is anybody else getting foreign transaction fees periodically on their Aadvantage Visa?

I have now gotten two. Citibank has gotten rid of both when I complained - but this time they were pretty defiant about it saying that Visa charges them 3% and they just pass this cost on to the consumer. Reading online it seems like most banks charge 3%, though Capitol One seems not to charge any fee whatsoever.

Is there any way around this? The last company that I got one from is based in the USA, but they do their banking out of England apparently (moneybookers.com). Their is no mention (that I can find) on their website of this fact, so that's pretty lame. (interesting note - when I called moneybookers I went to a call center in Sofia, Bulgaria. I'm not used to that and Bulgarian accents are much more pleasant sounding and easier to understand than Indian accents IMHO)

Thanks, and sorry if this question belongs elsewhere. :)


edit: apparently Chase BA Visas also don't have foreign transaction fees.

AFAIK, most Citi credit cards charge the foreign exchange fees, except for maybe the Chairman's card. Capital One, Amex Platinum/Centurion, Chase BA, Chase Marriott Rewards don't charge foreign exchange fees. There may be others. If you do a search, there should be a FAQ on this somewhere.

As you note, nearly all US-based credit cards charge a 3% foreign transaction fee. (It is *not* a fee from Visa or MasterCard. Visa and MasterCard typically charge the bank 0.8% or 1.0%. The bank can choose to pass all, none, or more than all of that fee through to you; most, including Citi, pass more than all.)

The way around it is to use a credit card that doesn't charge foreign transaction fees. Capital One is the only major national bank I'm aware of that doesn't charge foreign transaction fees, as you mention. My credit union only passes along the 0.8% fee from Visa on a credit union credit card; I think that's common for credit union-issued credit cards. (Perhaps small banks too; I don't know.)

The extra 2.2 cents isn't worth the AAdvantage mile for me for foreign transactions, particularly because I do get (limited) rewards on my credit union credit card. Check the exchange rates, though....

For those with the AmEx Platinum, foreign transaction fees are now waived.

Chase United Visa
 

The Chase United Visa card (US-based) has also waived FX fees
Just tested mine in Japan last week!

American Express, Capital One, Chase, Citi, and PenFed all issue some cards without foreign transaction fees, but you need to read the terms of your specific card to verify. To my knowledge all Citi AAdvantage cards are still subject to foreign transaction fees -and- the fee applies even if the foreign transaction is billed in US Dollars.

Any idea if the fee is charged by Visa or by the bank itself? From reading online, it sounds like Visa charges a fee, but then the bank increases that fee. Accurate?

Correct. The explanation that Citi customer service gave you is an oversimplification.

I don't think this is true, unless you have the Mileage Plus Club Visa card.

So my question is, if you get one of the cards that does not charge the foreign exchange fee, do they just give you a worse exchange rate to make up the difference?

No.

I didn't realize that it was Visa charging the 3%. This makes Cap1's policy even more significant.

Is there a way for us to test it, or do you know any group who has?

It isn't. VISA is charging the card issuer perhaps 1%. The issuer is charging the cardholder the amount specified in the cardholder agreement, typically ranging from zero to 3%.