Went to BofA to buy Euros this Spring and found the exchange rate used for this service costs you close to 10 %. Yes I said 10 %!

This doesn't bode well for MBNA cards.

Scroll down here to Foreign Transaction Fees and you'll find five banks that impose no fees.

Just got back from St. Maarten and all our charges on Capital One Go Miles Visa showed up exactly as expected (no fees at all); our receipt shows $300 and so does our statement, $30=$30, etc.

Just called CapitalOne this week - CapitalOne charges NO forex fees. Not even the 1% fee charged to the bank by Visa/MC. The CSR obviously had a script touting this advantage when I asked. This was right before he tried to upsell me on some protection scheme or another, so some things don't change.

It used to be that the Visa/MC 1% was hidden inside the exchange rate, and the banks were allowed to add their own fee of 1-3% on top of that. Now (since the outcome of the class action lawsuits) the CC companies are required to break out the 1% forex fee and charge the bank. Banks separately charge the customer a fee of up to 3% (or more) but it must be separately broken out and not hidden in the exchange rate.

My Credit Union (Navy Federal) still only has a 1% fee.

The Pentagon Federal Credit Union Platinum Rewards Visa Card offers 1.25% cash back. Witht the 1 % Visa charge, you net 1/4 percent profit. It worked just fine in Europe this August and September.

Anyone can join this credit union, one way or another. As a last resort, join the National Military Family Association.

Info and links on the Free Cards page (Cash Back Cards section) of the Credit Card section of my website below.

Capital One is the best choice because it currently charges no additional fees on foreign transactions and absorbs the 1% fee charged by Visa. Next best choice is usually a credit union card e.g. Pentagon Federal Credit Union which charges the 1%.

Hmm: 1% - 1.25% = ?

Merrill+ Visa issued by MBNA still does not add a foreign exchange fee, and there is no annual fee for the card.

October 5 transaction posted October 6: GBP 14.49 billed as USD 25.54 = USD 1.7626 per GBP. xrates.com shows these rates:

2005-10-05 Wednesday, October 5 1.7655 USD
2005-10-06 Thursday, October 6 1.7728 USD

dennis

cash advance v. purchases
 

you all need to draw a distinction between the purchase fees (well discussed above) and the outrageous transaction fees on cash advances

i was in taiwan last month and withdrew NT$3000 just as a test to see if it would work, (about $90US), as a cash advance on my AAdvantage-branded Master Card

i expected to pay a cash advance interest charge from the date of withdrawal, and was charged $0.71 (seventy-one US cents) on my statement

fine, no problem

i was also charged $10.US "minimum transaction fee"!!!!

so they were charging me more than 11% just to get the cash advance!!

i called and was told they do charge 3% of the amount advanced- i.e. had i taken $1000US it would have cost me $30- but that the minimum is $10

after complaining, they credited it back to me

my local bank in NY says i could have used my ATM card and only paid a small fee- like $1.50- for any size transaction

so i'll try that next time

beware of cash advance transaction fees on your credit cards

MBNA Fidelity Card
 

The Fidelity MBNA Mastercard (No annual fee, 1.5% cash rebate) didn't charge me any fees for purchases made last month. The foreign currency transactions converted at roughly the interbank rate; there were no fees in the finance charge portion of my statement.

Here are the details (I'm including the interbank rate from OandA.com on both the transaction date and the post date; I'm not sure which is used by MBNA:

19 Sept Charged GBP 20, converted to $36.03 or USD 1.8015/GBP. Interbank rate was 1.8086/1.8047
22 Sept Charged RUB 3,320, converted to $117.12 or RUB 28.34/USD. Interbank rate was 28.39/28.35
23 Sept Charged RUB 1,287, converted to $45.16 or RUB 28.49/USD. Interbank rate was 28.54/28.39
25 Sept Charged GBP 22.45, converted to $39.88 or USD 1.7763/GBP. Interbank rate was 1.7757/1.7716
25 Sept Charged GBP 15.8, converted to $27.98 or USD 1.7708/GBP. Interbank rate was 1.7757/1.7792

MBNA said they don't charge currency exchange fees, just as nyventurecapital said. MBNA's written terms and conditions also say no such fees, and that they use the interbank rate. My few foreign currency charges over the past couple of month indicate this is correct. Moreover, they will have to notice cardholders before imposing a charge, and MBNA said they list all such charges as a seperate line item on statements, so it will be easy to spot if they begin to tack on fees.

With 1.5% cash back from Fidelity, this is a 4.5% savings over cards like MP Visa and it seems a pretty good deal for those with hefty overseas purchases. Any thoughts from experts such as PGary?

what about relying on ATMs?
 

In the course of this thread about the costs when using CCs abroad, there has been only passing mention of ATMs when traveling. What about the costs associated with them, especially any variable ones based on the amount of local currency withdrawn?

I do not recall any notice of the per transaction fixed fees one routinely encounters here in the States (usually $1 or $2), and my own bank imposes no charges to my account for the use of other banks' ATMs, domestic or foreign. So where am I getting hit - unfavorable exchange rates between the local currency and the dollars coming out of my account?, fees that are buried in there?

I thought that if one wasn't uncomfortable drawing large sums of cash from ATMS while abroad and settling hotel and restaurant bills with cash, one could manage on $500 a day or whatever the limits for withdrawls from ATMs, and one didn't need the paper trail that credit cards give, then ATMs were a good way to go.

Why not more reliance on ATMs while abroad? What am I overlooking or unaware of?

If you use "Search this forum" for the term "ATM" you will see discussions of this issue in other threads...

http://flyertalk.com/forum/showthrea...&highlight=atm

http://flyertalk.com/forum/showthrea...&highlight=atm

...my own experience with a Visa check card was that a 2% fee was incorporated into the exchange rate.

dennis

I think ATMs weren't being discussed because they were slightly off-topic for the thread.

Having said that, in the last acquisition wave my bank instituted a $5 fee for international ATM use. This makes it possibly less attractive than credit cards, especially conssidering that my CapitalOne Mastercard has a 90-day grace period on top of no foreign use fee.

There are a number of banks that charge no fee for use of ATMs, and a few who give rebates for fees of other banks, and at least one that does all of these plus pays a good rate of interest on your money. If someone starts a thread specific to this question, I will respond to it.

The problem, of course, is where to post it. Do the moderators have guidance on this? ATMs are not credit cards, and thus discussion on them probably does not belong here.

If someone starts a thread, please send me a Private Message telling me where it is.

The conversation on that thread was about using ones credit cards to get local currency from ATMs while abroad. I am not interested in using credit cards to get local currency while abroad, but rather to use my ATM card for that purpose, drawing on what is on deposit in my checking or savings accounts back home.

It seems to me that while this thread and this forum are about credit cards, it is not wildly OT to discuss in a conversation about how banks stick it to us with their 3% vigorish for foreign exchange transactions whether ATMs cannot be used to avoid such charges. Getting local currency through ATMs while abroad has both obvious advantages and disadvantages (e.g., peril of carrying large amounts of cash on one's person, no paper trail for expenditures, no "float" for expenses, no bonus miles, etc.), but it is the possible hidden ones I wonder about.

So unless the moderator wants to bounce this to somewhere else (where?), I would like to hear why or why not on ATMs withdrawls from personal account for cash needs abroad (not ATM withdrawls with credit cards). Any "hidden" downsides, especially hidden or underappreciated costs that make it better to charge everything to credit cards even with 3% bank surcharges?

Re: the Fidelity MBNA Mastercard, I haven't been charged any foreign exchange fees either and the 1.5% rebate is passive, i.e. when you accrue $50 in rebates the $$ are automatically put into your brokerage account. You don't have to make a phone call to request a rebate, like on most Citi rebate cards.

Re: ATM withdrawals, I've used my credit union ATM card all over the world and have never been hit with any fees from my bank. That's a good enough reason to join a credit union right there. YMMV. ^

I don't have any accounts with a credit union, but I believe I am getting the same advantage from my own bank. And like you, I have never been hit with any fees when out of the country (USA) withdrawing local currency from a bank ATM.

So what are we missing, where are the banks putting it to us, why is this not clearly a superior way to go rather than letting credit card companies hit us with their 3% surcharges? Why, for example, not pull the local equivalent of $400 or whatever is needed to satisfy a hotel bill or pay the restaurant tab rather than give them my credit card and pay the credit card company and extra $12 (maybe $60 or more, depending on expenditures, for a 10 day stay outside the country)?

Here is a good site w/ foreign exchange percentages for mileage/points earning cards.

http://www.andrewcram.com/frequentflyerCC.html

Rebel against the Foreign Tranaction Fee
 

The problem is that the USA banks charge foreign transaction fee on V and MC but provide no service whatsoever for this fee.
In VISA and MasterCard network ALL foreign transactions are exlusively processed by the respective networks not by the banks. USA bank has nothing to do with conversion and has no related costs.
The fraud, as has been suggested by others, is not greater abroad. Every time I use my card in Europe they make me show the passport.
Anyhow - the cardholder's USA bank is not exposed to fraud losses, because it always makes a chargeback to the bank that services the mechant's account - i.e. the bank abroad.
VISA and MC networks charge a fee for the conversion and it is built into the exchange rate thay they choose.
Thus USA banks charge the fee for nothing or rather for behaviour.!!
There were already court cases where such a fee was found illegal because most of the time banks did not disclose them or even did not show them on bills.
After the case law developed - banks started showing the fee on bills but it still does not make them legal. Arguably the only pseudo-legal support exists if banks discolse the fee in the card agreement. Than the argument become: "so what that we do not provide any service for the fee we charge - you agreed to it" - a reasonable court should find that argument frivolous and kick such contract of adhesion out. In a normal country - banks would need to provide a service if they charge a fee - but in the USA it is all right and they can do what they want.

I can't imagine success based on the argument that these were contracts of adhesion, not when you are under no pressure of any sort to carry and use the card.

Usbank just started charging 3% on my Worldperks card for foreign transanctions. I switched to Bank of America

Which bank do you use? It may vary per bank.

My wife and I recently honeymooned in Australia/NZ, and I didn't check our foreign ATM withdrawls until this thread. After calculating it out, it looks like Chase (our bank, and my wife's employer) was hitting us with a 2.75% surcharge, which got wrapped into a poorer exchange rate. The rate on our bank statement was .788, and the interbank rate was .761 or so.

Ironically enough, my wife works in foreign exchange! At least I had an Amex card at my disposal, so only got hit with 2% most of the time.

I'll be looking for a credit union soon! :) Luckily our trip this month is to the Bahamas, where the Discover card is accepted a fair amount. 0% fees on Discover!

I think that since the class action suits of a couple of years back, banks are required to separately disclose currency exchange fees (generally they're classified as finance charges although they're a one-time, flat fee) and not wrap them into the exchange rate. But the banks are free to choose the exchange rate to use, and the rate can be based on a different day than the day of the purchase. As a result the rate applied to the transaction may not be the same as the official rate on that particular day.

ATM experience in Mexico
 

I will amend that "never been hit with any fees when out of the country (USA) withdrawing local currency from a bank ATM." A couple of weeks ago in Puerto Vallarto, Mexico, I found that local bank was going to take a flat $3 (USD) fee on any cash (pesos) withdrawal from their ATM. I opted to rely on cash (USD) to cash (pesos) exchanges, as well as AmEx travelers checks and credit cards, so can't report on additional, if any, transactional costs to get local currency from ATM (e.g., "currency conversion fees"). Still think ATMs an attractive way to go, complementing travelers checks, with credit cards in reserve. (Will do the ATM thing next week in Munich to see what happens there.)

It's been a while since the last message in this thread was posted - and I wonder if anyone has anything new to say? I'm going to Japan in April - will be charging a fair amount on credit cards (surcharges could run into hundreds of dollars) - and wonder which is the best to use. So far - the best candidate seems to be my Merrill Lynch MBNA card - but I can always get a new credit card before I leave. Robyn

Resurrecting an old thread.

I'll be traveling in Asia (SIN, NRT) after June this year. Among others, i have a MBNA issued Credit Union Card that used to have just the Visa Foreign Currency fees. Effective June MBNA is tacking on another charge (as others have reported elsewhere in this forum), making it 3% just like the others.

I searched a bit here and the only card that eats the Fx transaction fees seems to be the ones from CapitalOne.

Before I proceed with that, what do others based in the US, use when traveling in Asia? Any reason to consider a SPG Amex or another card?

In Asia - VISA seems to be accepted almost 99% of the time that credit cards are taken. MC probably about 90%, and then Amex about 85%. Most cards are taken in the larger cities, but when you're in the smaller cities in China (for example) - I've had places that only take Visa or cash.

So, first off, stick with VISA in Asia. Capital One seems to be a favorite, as the fx fees may be absorbed. Also, keep in mind the Pentagon Federal Credit Union Visa (1% forex fee, then 1.25% cash rebate = net rebate of .25%). See pgary's previous mentions of this card.

This whole thing started with the class action lawsuit, VISA/MC used to build the 1% into the exchange rate and pass the US$ amount to the issuing bank. Some self acclaimed "consumer protector" thinks this 1% is not fair becaused its hidden and started the lawsuit. VISA/MC lost/settled the case, in order to make the 1% legal, the banks has to change their system to separate the charges, while they were at it, the bank decided to recoup the loss from the lawsuit by changing the sur-charge amount coming from VISA/MC before passing onto the cardholder.

So who should we blame this 3% fee for? I for one won't blame the bank on this one.

We just returned from Japan and are receiving our credit card statements (note that credit cards were more widely accepted than we thought in Japan). I can't say for sure (it's hard to match up my daily currency charts with the credit card bills) - but it looks like the Merrill + card (Visa/MBNA) we used performed as promised (no currency markup). It isn't a great card for rewards - but it is free - so I'd recommend it to avoid currency markups. You don't have to be a ML customer to get one. Robyn

Has Visa changed its fee structure for international transactions?
Effective April 1, 2005 Visa assesses a 1% International Service Assessment (ISA). The ISA is not a currency conversion fee but rather a charge to issuing banks for their use of the global payment system. Visa will no longer charge issuing banks the 1% Multicurrency conversion fee. It is important to note that issuing banks, not Visa, determine the cardholder pricing structure. Visa cardholders receive, through their Issuers, an effective foreign exchange rate that is typically better than converting cash at a local currency dealer. However, your conversion rate may differ depending on whether the merchant converts the currency at the point of sale and the terms or if the bank that issues your card assesses a foreign transaction fee.

Effective June 9, 2005, Visa suspended the ISA on all single-currency cross-border transactions. Visa is now reviewing the fee structure related to single-currency cross-border transactions. We believe this action will help address issues raised by cardholders, merchants, and Member financial institutions, and allow Visa the flexibility to respond to marketplace changes and ensure fair and equitable support for the global payment system.

Visa remains committed to providing consumers a safe, efficient and secure method of payment when traveling abroad. Since 1986, when Visa first offered currency conversion services through Visa's member banks, we have given our cardholders convenient access to better currency exchange rates than would otherwise be available to them. Over the years, Visa has become a symbol of international acceptance, and we view currency conversion services as paramount to providing our cardholders superior services and benefits.

This is exactly what I was talking about, before the lawsuit, VISA does not need to separate the charge, they just receive the transaction, if the currency code is not USD, convert it using whatever exchange rate they have, which was very reasonable, and send the transaction in USD amount to the issuing bank for authorization.

Now, since they can not mark up the exchange rate, the have to create a new field to put the mark up $$$ amount, which also give them the ability to decide when to charge for the mark up.