Avoiding 3% Foreign Conversion Fee
 

I would like to bounce this idea off all of you: The facts are these: I know that the basic room price in Swiss Francs is a total of $1'070 CHF or about $890 USD at a conversion rate of .84CHF to one USD. I know that the rate fluctuates but what if I get the hotel to agree (say 7 days before my stay/checkout) to whatever the prevailing rate is at that time (e.g., a rate of $.84CHP to a dollar) and to take US traveler checks denominated in USD. Under this scenario, I would buy Amex travelers checks using my Amex credit card (and being a AAA member, there would be no fee for the checks). I would then have the requisite traveler checks to pay for the room stay in agreed-upon USD, thus not having to use credit cards. What do you think? Am I missing something?

Isn't the buying of traveler checks a cash advance? :confused:

The best way to avoid the conversion fee is to use a card that doesn't charge the fee (or at least charges a fee lower than 3%).

Yes. :p

Why would the hotel agree to take payment in US Dollars? They would then incur a currency conversion charge, not to mention the hassle of going to the bank.

I speculate that the hotel's relationship with its bank would result in much less of a loss as a result of conversion of my dollars to CHF.

I thought that AAA advertises that Amex cheques were free of any fees but don't recall if it is, indeed, a cash advance. I didn't think so.

It is, if only for the simple reason that buying $10,000 in travelers check per month using an MR Amex and then paying the credit card bill using the travelers checks would otherwise be a great free travel scam.

No, it's not. I can buy travellers checks from AAA and not pay a fee for it. It's like swapping currency.

Please locate this credit card. :D

If you buy with a credit card, your credit card issuer certainly will consider it a cash advance.

I concede on the zero fee (although some credit union cards may still rebate the Visa/MC fee). I think CapitalOne Visa/MC still charges only 1% (as it was formerly computed, the 1% Visa/MC fee with no bank fee added). That "avoids" the 3% Amex fee...

That hasn't happened with me. Given my credit card is with MBNA, I find that amazing. :D

Today, I was just quoted $1.399 per euro, with NO FEE at AAA. The Euro is trading at 1.2948. That is 7.5% discount.


In old days, I purchased a lot of foreign currency TC's from AAA. Although I never payed a fee, I never got them at the bank rate either. Nothing like today's discount, but still a 1-1.5% discount.

I have a LH MBNA, and an Amtrak MBNA, and both charge 1.5% per month if I take a cash advance. This may not be seen if one does not pay the cards down to zero each month.

This charge can be huge, as if I use the card in an ATM machine for a lousy 1
$1-200, and have a monthly set of charges to $10k, I get hit the 1.5% on the whole 10k, which is about $150 by my count.

That's a hideous rate. It never ceases to amaze me that currency converters of all stripes manage to pull the wool over so many people with claims of "no fee" and then charge a rate like that.

Unless you are a bank, no business is going to offer you the interbank rate for currency conversion. To do so would be a big money-loser. So whenever you see a claim of no fee, be doubly careful about checking against the market rates.