Tagged: Credit Card Charges FX
23rd August 2017 at 15:13 #823905
I just spotted somethingt hat seems a bit unfair.
My Swiss based Visa Card (issues in Switzerland in CHF) just imposed a charge on me (2.0%) for a CHF denominated transaction in CHF but where the transaction was processed ‘Abroad’.
I bought an item from a UK retailer who ships to Switzerland and this retailer ‘required me’ (i.e I had no option but) to pay in CHF. All prices were quoted in CHF. This retailer provides mail order to most Countries (Europe, USA, Asia, RSA etc)
I full expected that if the items were denominated and payable in EURO or GBP that I would pay a FX fee but certainly not when I paid in CHF (the currency of my Card and account). I checked my card terms and there was indeed a separate charge for CHF transactions processed abroad. I expec that this is new.
The wider point (aside from my online purchase) would be in respect of one of the Dynamic Exchanges which now seem to be offered to me at most point of sales in many countries.
‘…Would you like to pay in CHF [your card currency] of in [insert the local currency]……..’
I always answered this question in that I wanted to pay in the Local Currency having read that the Dynamic Currency conversion (“DCC”) Rate was usually inferior to the Visa/Mastercard own rate.
Now it seems that if I were to actually select to pay in my Card Currency (in this case CHF) that when I get home I will find that my local Card issuer will Hit me with a 2% charge nonetheless because the transaction is “abroad”.
I expect that this (and it seems to be a new) fee is a way for the Local Bank to ‘Not miss out on getting some form of charge in’ on the customer whilst abroad because users of DCC transaction would in the past only face 1 charge (the Margin built into the DCC).
Seems like it maybe some of those Swiss Bankers have worked for Ryanair !!
Any views?23rd August 2017 at 15:24 #823910
That’s a disgrace. We all know, I suppose, about DCC and avoid, but thanks for the tip about this.
I have accounts in the three currencies I use regularly so rarely have to face a Forex conversion, although I did get caught once last year in Poland.23rd August 2017 at 15:41 #823913
Tom OtleyKeymaster23rd August 2017 at 16:30 #823923
This Thread is essentially further commentary on the subject of DCC but it is at LEVEL 2….i.e from the Perspective of the Banks back at Base seeing that their nice little FX conversion margins being eaten in front of their eyes by overseas DCC companies.
Essentially a person now being offered a DCC in a foreign country is now being charged twice. one by the DCC company via their poor FX rates and then seeing their Bank back home levvying another fee.
I should expect (not holding breath though) that there should be a warning issued to each customer when offfed a DCC that they may face a 2nd charge from their own card company back home.
One of the arguements used when selling the DCC is that ‘You know what you are being charged’ but now that is not quite True since there may be a further charge from your card issuer.
In the past I have made many online purchases in the UK (priced in Euro, billed in Euro) onto a Euro denominated Card and never faced a further charge. Now that, at least via my bank and card in Switzerland, seems to be changing.
Consumers need to be warned… Maybe a feature in BT ?23rd August 2017 at 16:37 #823924
I think so – I was intending to publish a revised version of our DCC currency Guide in the November issue – perhaps it should be extended to take into account the matters you raise.
Tom23rd August 2017 at 22:53 #823939
It’s not only Switzerland that levies those charges SwissExPat. HSBC does as well as three other foreign banks where I have credit cards. Amex levies a 3% charge and Corner Bank is like yours also 2%. If you’re billed in CHF in for example the UK, you’re actually better off paying with a UK card as in that instance (USD billed in the UK in my case), I do not get billed the 2%.
Otherwise as already said, do not take the option to pay in your home currency when offered. The rate is always awful.29th August 2017 at 17:09 #824599
I have a separate UK Amex Card that I specifically use for foreign transactions. They do not charge for foreign transactions in the local currency or if I purchase something in the UK in online and has to be paid in foreign currency.
I regularly use in Spain and USA. In Spain they nearly always ask if I want to pay in £ or €. The way I understand it, is that I must always say the local currency of where I am (Euro) and then I will not be charged. This has always worked for me. Equally I used it to pay for Convention tickets from a USA website and it is in $ and I have not been charged with this either.
Have generally found the rate of exchange they use is even better than cash I have exchanged.29th August 2017 at 20:26 #824603
My US Amex has no charges and gives the proper conversion rate for purchases as does my Nationwide UK card for currency withdrawals….important to be aware of what card to use for what as this can suddenly change…
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