I spent a weekend in Montreal recently with some friends. Some notes:

• I charged my rental car to my Citi AA card (for the CDW coverage) and gas to my Citi Dividend Rewards Card (for the 5% cash back). Both charged a rate that was roughly interbank, and then tacked on 3% in "finance charges" at the end of the statement cycle.
  • Note that Citi Dividend Rewards Card is still good to use for gas purchases overseas--I got my 5% back, which more than made up for the 3% forex fee.
• I made two ATM withdrawals in CAD using my Umbrellabank.com Visa ATM card, which normally gives me a rate approximately 1% above the interbank rate.
  • The YUL airport ATM outside customs charged me roughly 3% above the interbank rate for the day (in addition to a disclosed CAD1.75 fee). A friend who withdrew from the same ATM using a Citi ATM card got roughly the same terrible rate. I'm going to follow that up with my bank, b/c it's unacceptable.
  • Another ATM I used two days later gave me very close to the interbank rate + 1%, as I've come to expect with Umbrellabank. Another friend who used his Commerce Bank (of NJ/NY) ATM card at that same ATM received a slightly more favorable rate (about 0.5% better).

My fiancee also recently returned from Israel, where she made purchases on an MBNA Visa, a Target Visa, and her UmbrellaBank Visa ATM/Debit card. I'll try to get ahold of her statements and compare the rates there as well.

It was a credit card. The offending party was Bank One not Citibank. I'm sure Citibank does the same. BTW, I got a great rate on my atm withdrawal. The exchange rate was better then the current rate and no 1% fee at least not yet.

Isn't this new policy of imposing as a separate item a 3% finance charge on all foreign purchases going to cause problems for international business travel? I guess the accounting office will have to add 3% to all receipts (and credit statement line items) for hotel, meals, etc. before billing clients. And employees using their own cards will have to remember to prorate the finance charge to their various clients in order to get reimbursed and not have to eat the charges personally.
Fortunately, the people who do a lot of travel (and spending money) abroad tend to be fairly intelligent and may rebel against this unfair treatment, moving their foreign (and maybe some domestic) credit card use to credit unions, etc. And the companies that employ them aren't stupid either and may find alternatives for their traveling employees. I hope the banks lose enough customers (and the high commisions they already get from merchants) that they realize they have overreached and will get less profit in the end than if they had not been so greedy.

Juniper Bank's Best Western Mastercard 'only' charges 2% on foreign currency transactions. Another option to consider, particularly if you already have a Juniper card in your wallet.

"Transaction Charges:
Foreign Country Transactions: 2% of the U.S. Dollar amount. "

http://www.juniper.com/app/japply/lp...CIMar&ATT=BWMC

I highly recommend USAA. Ask for the Cash Reward. You get 1% rebate at the end of the year.

I agree about recommending USAA, but the Cash Rewards card is only available to those people who qualify for USAA membership, i.e., can buy USAA insurance. Anyone can use the bank, but to buy USAA insurance you must meet their eligibility requirments. Their website has more details. USAA

I have a question about opting-out of the surcharge.

I just got a letter from Citibank (my AA miles card) notifying me of the 3% charge and stating that I can "opt-out" of the charge by calling 800-719-9044. The old terms stay in effect until the expiration date on my card or the end of my "membership year", whichever is later, at which point the account will be closed.

Am I missing something here? This sounds pretty straightforward to me and like there's no reason not to do it, since I don't mind if they close the account when it expires.

I think Citi was a bad deal even before they raised their forex fee to 3% (under the old terms, it was 2% + 1% for MC).

As for "opting out" I believe that is standard procedure for any change in T&C: they send you a notice, and you can refuse the changes by dropping the account as soon as the current term expires. You'll just have to find another card by the time the Citi account is closed. But as I mentioned, I wouldn't use Citi for forex even under the old terms.

I'm pretty sure my MBNA AAA card will go up shortly, I believe I called. Maybe it's my specific card (SCAAA ie SoCal). Should I double check.

Should I get a Cap One MC for a BIG trip to the South Seas in September. Looks that way.

ziobacio--
Can you let us know how you can get a bank account with USAA without being a member? Even without the ability to get credit card I'd like to try out their online banking. The website forces you down the path of membership-which I don't qualify for. Do you just have to call them?

Thanks!

It seems all banks are going to the 3% surcharge route now, according to the article. The banks are making about $1 billion from this.

If anyone have the 1% card, please let me know.

Excellent question! I've been with them so long, I am not sure how to do that! LOL.

Looking at their site without logging in, I would suggest calling either of these "contact us" numbers:

1-800-531-2265 (USAA Fed Savings Bank)

1-800-292-8302 (USAA eligibility)

Good luck -- I am sure that if you decide to get a banking account with them you will not be disappointed. I've often said that the one really good thing about being in the Army 35+ years ago was getting into USAA.

Just got back from Canada and used my Nordstrom Visa....it's still 1%

http://biz.yahoo.com/brn/050624/16435.html?.v=1

Bankrate.com
Are you overcharged for overseas purchases?
Friday June 24, 6:00 am ET
Kristin Arnold


Your credit card company is making a killing off the money you spend on your foreign vacation, and you might not even know it.
This extra profit is called a "foreign currency-conversion fee," and you could be paying up to 4-percent extra when you make an overseas purchase with a credit card.
One percent of that charge comes from the Visa or MasterCard networks, which charge a 1-percent fee for converting your foreign-currency purchase into American dollars.


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On April 1, Visa replaced its 1 percent currency-conversion charge with a 1 percent "transaction fee." MasterCard plans to start charging the same transaction fee starting Oct. 1, replacing its current 1-percent currency-conversion charge.

No matter what you call it, it's a good deal. Changing your money in almost any other manner will probably cost you a lot more.

But many credit card issuers and banks are cashing in by adding a 2 percent to 3 percent charge on top of that 1 percent without doing a thing to earn it.

"Banks have been making a profit off their customers for a long time, while providing no service," says Linda Sherry, the editorial director for Consumer Action in Washington. "Visa and MasterCard are doing all the work; it's simply pure profit for banks."

Ed Perkins, syndicated travel columnist and author of "Business Travel When It's Your Money," agrees.

Are you sure? Banks don't list this rip-off as a separate charge.