openfly - 08/02/2010 09:21 GMT
I have had a BA/Amex card for some time now and often use it abroad.
I have always had paper bills for accounting reasons. Recently I registered to use the card online through the Amex website and received quite a shock.
On the paper bill there is no mention of commission with each item charge that is non-sterling. On the website online bill each item shows a commission charge of over 3% for a foreign currency item!!
So not only do they give you a poor rate of exchange but BA/Amex have the cheek to charge you another 3%. There is also the £150 annual charge. No wonder that they can afford to give a ''buddy ticket''.
Bye bye BA/Amex, I shall stick to VISA!
tarisingh - 08/02/2010 09:29 GMT
I was also shocked to learn this but have found that all the major cards play the same game! One exception is the Post Office mastercard.
NTarrant - 08/02/2010 09:35 GMT
I have a Blue Amex card and whilst the number of BA miles is not as high as others there is no annual charge unless you spend less than £2K per annum.
I have used the Amex card abroad on many occasions and have usually found that when paying for items such as hotel bills and other purchases the direct exchange between foreign currency charged and sterling has been better or near enough the same as Visa or Mastercard and that includes any charges.
It's worth readers noting that the BA Amex cards have no annual fee if you hold a Amex Platinum Chargecard or higher.
It is also worth noting that American Express always use the Interbank Exchange Rate for foreign to demostic transactions, this rate, which can be viewed on-line on the Interbank website is always better than you would get in a BDC and so even taking into account the 'commission' Amex charge on the transaction the cost evens out to the normal tourist rate without the hassle of getting cash out etc.
Actually - allmost all cards charge 3% - Amex is just being transparent about it. I think they might have stopped this practice though - perhaps lots have had a similar reaction.
The actualy exchange rate (based on comparing same day transactions on my Visa cards) seems to be very simiar.
You are right though - these 3% charges do add up. The one card I am aware of (in the UK) that does not charge 3% is Nationwide, There might be one or two others, (the Post office perhaps?) but trust me - these are the minority! Chances are - you are being charged 3% but didnt know it.
VintageKrug - 08/02/2010 10:23 GMT
I *thought* Nationwide changed the T&Cs on that card. Not certain, though.
On my most recent personal trip, I just used cash - that 3% adds up!!
Sorry tarisingh - didnt mean to repeat your advice.
Incidently - the reason Amex can afford the buddy ticket and the generous mileage is that they charge retailers twice as much (sometimes more) to accept Amex. Thats why you often find your restaurant or retailer doesnt take it - or descretely asks if you might pay with something else. The reason merchants do put up higher interchange fees is because most corporate cards (and hence high end business account expense types) are Amex branded - and Amex are very good at showing figures that prove how much turnover can increase by accepting the card.
VK - nice try - but that cash has the 3% as well - either at the aiport (much more than 3%), or subtly added to your ATM transaction.
VintageKrug - 08/02/2010 10:34 GMT
Not if you are a Premier customer, I get commission free cash before I travel.
I would never change cash at an airport - usually the biggest rip off going, especially BAA/Travelex.
Vk - it may be commission free - but the 3% is built into the exchange rate. That’s why there is such a big spread between the buy / sell rates.
Credit card firms typically use the mid rate for exchange purposes then add the 3% on top, so the cost is actually comparable to paying with cash.
Banks make most of their money out of 'Premier customers' incidentally. That annual fee you pay for the 'commission free' benefit for instance?
M&S and Post Office sell commission free too and you don’t need to be a big fish to use them.
All this aside - one of the biggest problems in financial services is the lack of transparency. I have no problem in paying 3% for the convenience of paying for services abroad - think of the technology that goes into making this happen. Yet the FS industry ties itself in knots to confuse us all to hide the fact we are paying. And when one of the herd breaks free (in this case AMEX bravely doing what all should do) it's their own customers (such as in this case Openfly) who beat them up for it and force them back into line.
Quick illustration on this - im doing my expenses as it happens. A charge of $1,046 on my Amex card worked out as £670 (inclusive of £19 commision). If i paid cash, it would have cost £698 based on the exchange rate of my commission free cash.
This is precisely why I have stopped using my Amex card overseas. Instead I use a Saga-branded Bank of Ireland Platinum Visa card which has zero % commission & fees on overseas transactions. If you pre-load it even cash withdrawals are free! If, like me, you do any amount of overseas travelling a 3 - 4 % saving on forex costs mounts up to a very worthwhile saving.
The card is free so there is really no reason for anyone not to get one. Details can be seen at http://www.saga.co.uk/money-shop/credit-card/ . It states there that transactions outside Europe are subject to a 1% loading but even that is about to be scrapped, making the card truly commission-free anywhere in the world.
openfly - 08/02/2010 13:07 GMT
To everyone...thanks for the replies. All appreciated. I now realise that I have been a d..khead not to have noticed the BA/Amex charges before!
JordanD - 08/02/2010 14:27 GMT
It seems to be covered above, but currently (from my best knowledge) there are three main cards that offer 0% transaction fee abroad and give 'best rate' on currency conversion: The Nationwide Credit Card, which as VintageKrug rightly says changed its T&Cs so that it is 0% & 'best rate' in the EU/EEC only, with a loaded rate elsewhere; Cards issued by Bank of Ireland (which are mostly Saga & the Post Office branded cards as well as their own); Santander's Zero card.
To be fair to Amex, their T&Cs are fairly clear on commission being charged ... and if memory serves me right, they also make it clear that spends in currencies other than local & USD will incur conversion to USD before conversion to local.
Hope that helps.
Tim2sms - 08/02/2010 15:31 GMT
I have used a Citibank personal bank account for 20 years out of the UK. They charge zero commission and the buy/sell exchange rates are 1% either side of mid point. This is exceptional for retail banking. Greater savings can be had if you open a dollar or euro account and point your debit card to it. (a freephone phone call.) - Also free cashpoint withdrawals from any non Link cashpoint in the UK.
Credit cards and Bureau de Change will generally charge you 5%-10% *All in"
Credit card convenience comes at a whacking high price, and using credit cards when abroad is a deliberate choice to contribute to those banker bonuses... a worthy cause??!!
MarcusUK - 09/02/2010 07:35 GMT
I recently after getting the Gold VS card, was offered the Black Amex.
Already I have made bookings with VAustralia, Malaysian Airlines, & KLM from Amsterdam. None have included any 3% fee added, & the exchange rate was not less than the xe.com rate also a very good source. There is a fee of £115, but as others have mentioned, free upgrades, a large bonus when starting, etc.
Nationwide - I have been with them for some 15 years. In deed they have introduced "Some" charges for cash withdrawals overseas, but the list of countries is on their website. It does not include any countries I visit, including within the EU, Far or Middle East or Australia.
Nationwide debit cards, apply the banking rate & not the tourist rate, with no fee, no commission, I save approx 15-20% over the year for cash in every country, it appears, & have done for a long time. It is a very useful card abroad, via the Visa network.
The credit card also does not charge in every country, haven't had commissions or %'s added ever, & the exchange rate always at the level of the banking not tourist rates.
VintageKrug - 09/02/2010 08:09 GMT
You can currently get 6,000 BA Miles by taking out a BA Premium Plus American Express:
www.americanexpress.com/uk/britishair/britishairways.cgi
If you can get a referral from an existing BA Amex cardholder, you would both get a joining bonus and you should explore that option amongst your friends and family before joining via the link above.
