No/Low Currency Conversion Fee Card

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Old Feb 14, 06, 9:42 am
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No/Low Currency Conversion Fee Card

I received notice yesterday that the Mastercard I've been using for years to make purchases abroad will begin imposing a 3% currency conversion fee effective 1 April. Until now, it has only charged the 1% fee imposed by Mastercard, and because I do make a fair amount of non-US dollar charges, I have foregone the miles or points I could earn with an affiliated card and instead used this fee-free card. The math has obviously changed.

I know that Capital One imposes no conversion fee, and AMEX imposes a 2% fee, but are there any hotel- or airline-affiliated cards which don't impose more than the 1% fee that Visa and Mastercard impose? The Capital One doesn't offer "real" miles or points, and I doubt I'd be able to take advantage of the rewards it offers. Any information would be appreciated.
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Old Feb 14, 06, 11:26 am
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Merrill+ Visa issued by MBNA. No annual fee. No foreign currency exchange fees. Reasonable rewards, including 1:1 redemption for British Airways Executive Club miles in 5,000 point increments.

I would not be surprised if they were to add a foreign currency fee, but inasmuch as there is no annual fee it seemsto be low risk to use it in the interim.

dennis
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Old Feb 14, 06, 2:20 pm
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MBNA's AAA Visa and Pentagon Federal Credit Union's Visa both charge 1%. The later gives a 1.25% rebate on all purchases, neting you a profit. Both are described on the Free Cards Page, Cash Back Cards section of the Credit Cards section of my website below.
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Old Feb 14, 06, 2:36 pm
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Capital One actually has a cash back card. The offer tends to change quite frequently. What I see now is 1% cash back, 2% on groceries, payable in $25 chunks as a statement credit or check. A good deal if they stick with 0%. Though you then have to deal with Capital One...

Regarding the MBNA cards (Merrill+, AAA), I would guess at the first opportunity possible they will be converted to 3% as BofA is buying MBNA.
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Old Feb 14, 06, 4:05 pm
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See Thread in MilesBuzz

There's one long thread about this over in MilesBuzz.
I expect you'll find it quite comprehensive if you have the time to read it all!

Best card for foreign exchange?
http://www.flyertalk.com/forum/showthread.php?t=401958
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Old Feb 14, 06, 5:22 pm
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Bank of America has already completed the acquisition of MBNA.

I believe cards serviced for other financial institutions, such as Merrill Lynch, are contractually different than affinity cards and that Merrill decides the terms. Still I cannot see any reason Merrill would choose not to charge a fee if their primary competitors already charge because they are not marketing this as a feature.

Originally Posted by acf573
Regarding the MBNA cards (Merrill+, AAA), I would guess at the first opportunity possible they will be converted to 3% as BofA is buying MBNA.
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Old Feb 15, 06, 7:43 am
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Thanks for the info. pgary, I'd always discounted the Pentagon FCU's Visa on the assumption that I couldn't qualify, but after clicking through on your website, I learned that by paying $20 to join an auxiliary, I could. The things one learns through FlyerTalk ! Too bad the card doesn't earn miles or points, but you're right, the cash back more than makes up for that.

As you noted acf573 , the problem with the Capital One card is that you have to deal with Capital One . . .

jbfield, believe it or not, I did a search for threads dealing with currency conversion fees before posting this question, but obviously I didn't choose the right search terms; I'll try to do better next time. After all, it was the first time I've ever started a thread. (And you're right about the length of time it took to scan the other thread.)
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Old Feb 20, 06, 1:41 pm
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I know this has been beaten to death on other threads but it seems like a very fluid situation with many companies changing terms as of April 1, 2006.

Is the CapitalOne card still the lowest foreign conversion fee at 1%?

If so, can CapitalOne miles/points be converted into BA miles?

The Merrill+ card looked like the winner until another poster said Bank of America was buying them. They will surely impose the 3% fee like they have with all their other acquisitions.
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Old Feb 20, 06, 5:03 pm
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Capital One is actually at 0%. And yes, that is the lowest. Cap One "miles" are essentially just points that you can apply to purchasing a plane ticket.
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Old Feb 21, 06, 12:10 am
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Originally Posted by acf573
Capital One is actually at 0%. And yes, that is the lowest. Cap One "miles" are essentially just points that you can apply to purchasing a plane ticket.
though they still charge the 1% pass through fee from MC - or at least, that's what they told me on the phone yesterday. I use my local credit union credit card when I travel abroad - 1%, and no rewards - but no games, and the money stays in the local community. I don't travel internationally more than a couple times a year, so I don't lose a lot in rewards.
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Old Feb 21, 06, 11:18 am
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I also just use my local credit union's credit card when traveling abroad. No hassles, low conversion fees (1%), no worries.
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Old Feb 21, 06, 2:43 pm
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Originally Posted by psychtobe
though they still charge the 1% pass through fee from MC - or at least, that's what they told me on the phone yesterday.
My understanding is that they're at 0% and they eat the 1% (this was also mentioned in an article posted here in the last week). This is somewhat untenable over the long term, but to date, they have not introduced a change (to my knowledge). The guys that previously only had the 1% Visa/MC fee got caught a bit by the change in policy. For instance, my credit union had a period of a bit less than a year where they were at 0% because they didn't have the software set up to tack on 1% for all foreign-originated charges. In contrast, those banks that previously tacked on an extra 2% could pretty easily change their software to do 3%.

That said, I use my Citi PP and Amex SPG when abroad. PP earns ~2%, 3% fee = -1%. Amex SPG I count as ~1.9%, ~2% fee = -0.5% or so after accounting for Amex's less competitive exchange rate. These options are competitive with a no reward, 1% card and don't have to deal with another piece of plastic.
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Old Feb 21, 06, 5:04 pm
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I recently responded to a Washington Mutual Visa card solicitation that had a 1% international service fee.
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Old Feb 28, 06, 3:49 pm
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The fee is 1% for EVERY VI or MC!

The fact is Visa and Mastercard updated their system to impose an association fee of 1%. All VI & MC cards will have a 1% Foreign Transactions Fee as a result of the "WALMART LAWSUIT SETTLEMENT" Everything Walmart does is good for Walmart and bad for everyone else. Now off of the soapbox. The associations charge 1% as a seperate line item. The banks can add a surcharge to this fee as per their contract. This amount can be from 0% to 5% for doing absolutely nothing. The result is that for a VI or MC you will pay between 1% & 6% for any foreign transactions. I did a little research and this is what I found out. Bank of America cards are all 3%, Chase cards are all 3%, HSBC is 2% eeck, American Express is 2%, Discover is 0% (but only good in North America), Nordstrom is 1%, most credit unions are 1%, Macys is 1%, Juniper Bank is 2%, US Bank is 3%, MBNA is 1% on some and 3% on others but will increase all cards to 3% as of April 2006, Capital One is 1%. I hope this information is of help to you.
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Old Feb 28, 06, 4:32 pm
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Originally Posted by drbond
The fact is Visa and Mastercard updated their system to impose an association fee of 1%. All VI & MC cards will have a 1% Foreign Transactions Fee as a result of the "WALMART LAWSUIT SETTLEMENT" Everything Walmart does is good for Walmart and bad for everyone else. Now off of the soapbox. The associations charge 1% as a seperate line item. The banks can add a surcharge to this fee as per their contract. This amount can be from 0% to 5% for doing absolutely nothing. The result is that for a VI or MC you will pay between 1% & 6% for any foreign transactions. I did a little research and this is what I found out. Bank of America cards are all 3%, Chase cards are all 3%, HSBC is 2% eeck, American Express is 2%, Discover is 0% (but only good in North America), Nordstrom is 1%, most credit unions are 1%, Macys is 1%, Juniper Bank is 2%, US Bank is 3%, MBNA is 1% on some and 3% on others but will increase all cards to 3% as of April 2006, Capital One is 1%. I hope this information is of help to you.
And Citibank??????
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