foreign currency fees - a rip-off!.
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I want to rant about credit cards charging exorbitant fees on foreign currency transactions.
For example, for our overseas trips we often booked car hire and hotels using credit cards (Amex and Mastercard). I have discovered that the exchange rates they gave were sometimes worse than the CBA retail rates, and on top of these they charged 2.5% fee on the conversion. We complained when we bought foreign currencies from the CBA and had to pay 1% commission. But, having to pay 2.5% conversion fees is a big rip-off.
I would like to hear your suggestions on what would be cost effective ways of paying for foreign currencies using credit cards?
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Option 1 - Wizard Clear advantage Master card - No FX fees
Option 2 - Earth Cards 1-1.5% FX charge (correct me if Im wrong)
The market norm for this is 2.5%, however you will find fees as high as 3.4% with citibank.
All credit cards (except for the Wizard) charge this fee. Its only been in the last couple of years that it has been transparent. This was due to consumer backlash in the US and NZ.
Regrettably, the fee is not negotiable. I have called AMEX and requested this on more than one occasion.
I did a deal in a previous life where the fx fee was negotiated with a large multi-national on their corporate card program but the spend in USD was huge.
Has anyone had any luck with getting their bank/cc company to budge on this one?
There is not much that can be done about the exchange rate itself. As far as I am aware the conversion is done by the credit card company itself (Visa/MasterCard/Amex). In my experience, though, the exchange rate has generally been what I expect.
On top of that, there are fees that the scheme charges to the bank (a conversion fee), and then the bank has its own fee. Not really much scope for negotiation on the scheme charged fees (although I understand Wizard credit this back).
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I haven't, but even with the FX fee it still works out cheaper than using something like a Cash Passport from Travelex who's exchange rate is so much worse than the card providers so I just don't think about it anymore.
Like most things in financial services, someone ends up paying for it somewhere along the line. My advice is just to cop it on the chin and enjoy the journey.
The only way around it is the Wizard card, however there are some small irritations even with that card. Customer service seems a little slap dash sometimes as one example. The feedback is mixed on this product.
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Re: foreign currency fees - a rip-off!
Quote:
Originally Posted by Travel Guru
I haven't, but even with the FX fee it still works out cheaper than using something like a Cash Passport from Travelex who's exchange rate is so much worse than the card providers so I just don't think about it anymore.
TG
Yes at SYD on Monday Travelex were quoting 99.9 cents when buying US notes-nearly made parity!Unfortunately the wrong way round for us.
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A good exchange rate and no fees. And you can convert them to cash (indeed, they are cash in the US) at many banks in your destination country for no fee either (just don't try Brasil!).
A good exchange rate and no fees. And you can convert them to cash (indeed, they are cash in the US) at many banks in your destination country for no fee either (just don't try Brasil!).
Are you sure about that? My understanding was that you could get TC fee free at the CBA, but only in $AUD. So when you turn up to some overseas banks with $AUD they can charge an international transaction fee (as well as a counter fee).
I stopped using TC because of this, plus the inconvenience of trying to find banks overseas that would accept $AUD. I guess it may depend on where you travel.
Since then, I applied for a Wizard card, and will be using that for all future CC transactions, and the second Wizard card (my wife's) will be used to withdraw money out of ATMs. Of course we'll load the card up with some cash first.
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Re: foreign currency fees - a rip-off!
Quote:
Originally Posted by Myrna
I would like to hear your suggestions on what would be cost effective ways of paying for foreign currencies using credit cards?
The Wizard MC is your answer. See this post of mine;The Australian Frequent Flyer Online Community - View Single Post - Best card for travelling overseas?
Apart from the countries mentioned in the above thread, you can add US, UK, Thailand to the countries that I've used it without any problems (either as a credit card or to withdraw cash after putting the card into +ve balance). I also use it when I buy stuff in foreign currencies over the internet. Karl Marden use to say about AMEX: "Don't leave home without it". My philosophy is "Don't go overseas without the Wizard.
Unsubtantiated rumours, however, are that the Wizard's lack of Fx fees may not last forever...
Quote:
Originally Posted by Nutcase
The only way around it is the Wizard card, however there are some small irritations even with that card. Customer service seems a little slap dash sometimes as one example. The feedback is mixed on this product.
In my experience, they are very minor irritations that I can live with so long as they don't charge any Fx fees!
The latest fiasco with Citibank charging 5% commission on foreign currency transactions has really got me thinking about the best approach although I am yet to be convinced that Wizard Mastercard is the answer. Perhaps a trial is necessary for me to see the actual results as that would be the best indication. Just on AFF alone I have found that there are serious discrepancies with people using different banks and even with people using the same bank and product.
As I spend a fair amount of time in Thailand every year I may end up opening an ATM account over there and deposit cash into the account on every trip. This would ensure that I get the best possible cash rates and do not have to worry about bank charges. What to do with other countries? I guess continue with the current practice of carrying cash until it becomes an issue.
I have less faith in banks everyday. Just when you think they can't get any lower....
foreign currency fees - a rip-off!
. See this post of mine;
). I also use it when I buy stuff in foreign currencies over the internet. Karl Marden use to say about AMEX: "Don't leave home without it
". My philosophy is "Don't go overseas without the Wizard
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