My USAA Master Card and Charles Schwab VISA (MBNA) cards both charge 1%. The cards charging 3% get to stay home except for one AmEx (just in case).

Some corrections to what has been posted before:

Visa and MasterCard charge 1% currency conversion fee for foreign currency transactions to all banks and credi unions. This 1% is not bad at all, since they use the interbank exchange rate, which is better than the exchange rate we get when buying foreign currency on any bank or money exchange office (for small transactions). Appart from this 1% conversion fee, the banks could charge additional fees (1% or 2% more), and that is what is actually happening with credit cards like Citi, Chase, Bank of America, etc. They just figure out how to bring more money to their P&L's...

For someone who travels a lot, the best advice I can give is to get a credit card from a credit union or a small bank who only charges the 1% currency conversion fee and use the normal points or miles card for all transactions done in the USA...

Credit Card fees have been increased in the last five years because the US Credit Card business is saturated, so the only way to increase profits is to charge more fees...

MasterCard does not currently charge 1%, although they may begin to in the autumn. For the next several months, a 0% surcharge issuing bank with a MasterCard-branded card would have 0 (ZERO) markup from the interbank rate.

I was told by my bank that as of June 2005, VISA now also stops charging 1% foreign transaction fee.

It is the bank that will continue charging the fee, not Visa nor Master Card.

That's partially true. Visa/MC no longer build the 1% into the exchange rate. In a move to be more transparent, Visa/MC will bill the issuing bank the 1% and leave it up to them how to collect it from their cardholders. Visa instituted the new change already, MC has removed the 1% and will start charging the banks in November I believe.

So if your bank suddenly starts charging you a 1% fx surcharge, they're really not making any extra money off of it. Of course, if you're MBNA, you feel like if you have to change your procedures to recoup the 1%, you might as well take the opportunity to jack your rate up to 3% while you're at it...

See http://www.bankrate.com/brm/news/cc/20050624b1.asp

(I cannot format this table into FT...)

I was actually referring to the USD foreign transaction (transaction done in a foreign country but in USD), will Visa/MC still bill the bank for the 1%? From what I was told, it is no longer billed if the currency is in USD.

Please help confirm.

Thanks,

You have it backwards. In the past, the 1% was only for forex purchases. If you were overseas and getting billed in USD, there was no charge. With their new policies, Visa charges the bank 1% for all foreign purchases (regardless of currency). MC will still only charge the 1% for foreign currency purchases until Oct 1. This was discussed here:
http://www.flyertalk.com/forum/showthread.php?t=401958
(look around post #161)

There's a link to a USA Today article discussing the changes:
http://www.usatoday.com/travel/news/...ard-fees_x.htm

1-2% is acceptable but 3% is outrageous NTM in some coutries they tack on a surcharge for using a credit card. Of course if you are a good customer you can dispute the charges and sometimes they will remove them. I agree CC companies at times are getting very greedy.
-UFFA

Well BofA is taking over MBNA.

So you can expect 3% for any MBNA card which wasn't charging 3% already.

Maybe more since they may have to recoup an expensive acquisition.

I think that the only MBNA cards w/o a 3% rate are those where there's some sort of contractual agreement with the affiliated group/company. So until those contracts come up for renewal, expect the status quo.

Interpreting new card int'l policy--help?
 

Have a new Advanta Business card and here is their foreign currency statement. Does this say what I think it says--that they don't charge the typical 3% fee? I only travel out of the country maybe once a year so am probably not the most qualified at interpreting these statements...

"Foreign currency and international transactions

Account transactions made in countries other than the US and/or in currencies other than US Dollars will be converted to US transactions in US Dollars under the regulations for such matters established and in effect from time to time by our card issuer membership organizations. Any such conversion may occur on a date other than the date of the transaction, and the currency conversion rate applied to the transaction may be different from the rate available to the membership organization. We do not determine the currency conversion rate used and we do not receive any portion of the currency conversion rate or of any fees that may be charged by those organizations. If we elect to charge you a separate fee in connection with such transactions, that fee will be disclosed to you. You agree to pay the converted amounts and fees."

I just got my Citi statement and had the separate fee for charges in Canada. I called, and they said they always charged a fee but now it is a separate line item.

The fee bugs me because I always heard you got the best exchange rate by using your cc, maybe you get the best rate but get screwed on the fee.

I used my card for business and expensed off my charges now I have to expense off the fee. I'm sure others disagree, but if your going to screw me then build it into each transaction so I can't see you screwing me.

Well, the reason why it's a separate fee now is because people were complaining before that it was a hidden fee that was inadequately disclosed (and there were several lawsuits over it). I guess they can't win. :)

But at 3%, you're probably best off getting cash from an ATM and spending that (that is, if your bank doesn't charge you exorbitant fees), but you're probably still better off using your CC than exchanging currency at the airport or something.

I hear ya! For business expenses it's a pain separately, for pleasure I will now use cash. I always have some Cdn cash, and then I'll just go to the bank once I get there. It isn't worth 3% for the miles.