Credit Card Charges – Fees for Transactions abroad (but in own Currency)

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This topic contains 22 replies, has 13 voices, and was last updated by  Chris in Makati 6 Jun 2018
at 09:48
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Viewing 15 posts - 1 through 15 (of 23 total)

  • SwissExPat
    Participant

    I just spotted something that 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?


    capetonianm
    Participant

    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.


    Tom Otley
    Keymaster

    I’m sure we had a thread on this – [edit – found it].

    Dynamic Currency Conversion

    It is shocking how often retailers (and others) do this.

    Dynamic Currency Conversion (DCC) Guide


    SwissExPat
    Participant

    Thanks Tom,

    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 ?


    Tom Otley
    Keymaster

    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.
    thank you
    Tom


    LuganoPirate
    Participant

    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.


    handbag
    Participant

    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.


    PeterCoultas
    Participant

    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…


    capetonianm
    Participant

    I have just spent a few days in Poland where DCC appears to have become the default when you pay for anything with a debit or credit card. In one place where I had a meal the waitress even passed me the machine after she’d (on my behalf) accepted the option to pay in my card’s ‘home’ currency and seemed quite surprised when I asked her to cancel the transaction and start again.

    I paid for one night at a hotel online in advance, and when I checked in was given my bill, in PLN, with the credit card slip attached saying : “I agree that I have chosen to pay in another currency and I have no claim ………” etc. I had never agreed, or even been asked, about this, and the emailed confirmation showed me the price in PLN with no mention of any other currency.

    I took this up with the receptionist and in fairness I have to say it was dealt with pleasantly and efficiently, they refunded me the first GBP amount and then re-charged me in PLN. The difference on a bill of about £150 between the DCC and the normal bank conversion has come out to £12, obviously the DCC being the higher amount. £12 may not seem a lot but it all adds up if applied to every payment.

    Just a warning. I don’t know how widespread the practice is as I have accounts in most of the currencies is use regularly, PLN being an exception.


    AisleSeatTraveller
    Participant

    always request payment in local currency, DCC is a potential con whereby the acquirer and the issuer may charge the forex fee


    SwissExPat
    Participant

    Hi All

    Many of us are well aware of the DCC scam.

    This Thread is shining a light on the NEXT LEVEL OF THE SCAM whereby some card issuers are adding a SECOND charge when the transaction arrives back into your account at home.

    So even if the Customer accepts a DCC overseas and thinks that this is the end of it, then your card issuer hits you with a 2nd charge.

    I have 2 CHF issued cards in Switzerland, One levvies this charge , the other does not.

    Beware !


    capetonianm
    Participant

    Coincidentally, in this morning’s Daily Wail :

    http://www.dailymail.co.uk/money/news/article-5784137/The-proof-pay-local-currency-never-pounds-holiday.html

    For every transaction, it worked out more expensive to pay in pounds.

    In the worst case, the difference was almost 10 per cent — which means you would lose £100 if you spent £1,000 over the course of your holiday.

    Most restaurants, shops and cash machines overseas give tourists the option to pay in sterling — this is known as dynamic currency conversion. It can be tempting as it means you’ll be able see straight away how much the transaction will cost you in pounds and pence.

    But the conversion rates used by foreign firms almost always work out as more expensive than if you had paid in the local currency and left it to your own bank or credit card provider to convert the cost.


    Tom Otley
    Keymaster

    Absolutely. I have been using a Platinum Travel Card from Barclaycard for the last 2 years which, for the period of the promotion, does not charge any non sterling conversion fee. It is still available as per the below…

    * 0% interest on purchases for 12 months from the date you open your account
    * No non-sterling transaction fees on your foreign spend and ATM withdrawals until 31 August 2022. After this, the fee returns to 2.99%.
    * Protection on purchases over £100 so if there’s a problem, you could be covered for a refund – that’s a little feature that comes with every credit card (conditions apply)
    * An exclusive package of benefits and savings with Barclaycard Entertainment  

    It’s been very good, but my one runs out in August this year so I’ll be searching around for something else.

    To be clear, I am not recommending a financial product, am not qualified to do so, and am not allowed to, and so have not posted a link to it for that reason!


    mkcol74
    Participant

    Absolutely. I have been using a Platinum Travel Card from Barclaycard for the last 2 years which, for the period of the promotion, does not charge any non sterling conversion fee. It is still available as per the below…

    * 0% interest on purchases for 12 months from the date you open your account

    * No non-sterling transaction fees on your foreign spend and ATM withdrawals until 31 August 2022. After this, the fee returns to 2.99%.

    * Protection on purchases over £100 so if there’s a problem, you could be covered for a refund – that’s a little feature that comes with every credit card (conditions apply)

    * An exclusive package of benefits and savings with Barclaycard Entertainment

    It’s been very good, but my one runs out in August this year so I’ll be searching around for something else.

    To be clear, I am not recommending a financial product, am not qualified to do so, and am not allowed to, and so have not posted a link to it for that reason!

    @tom-otley I too am not recommending the following, however I can confirm that I’ve had several successful transactions go through my Curve card without issue – a mixture of website, over the phone (CNP) & real life chip+PIN/contactless transactions go through, plus ATM withdrawals at home and abroad. You simply link whatever debit/credit card (ex AMEX) you want to actually be charged in GBP, and the app pops up with a notification for every transaction so you know each time it’s used.


    capetonianm
    Participant

    Since we’re on this topic, a friend of mine has a card called ‘Revolute’ which he swears by for multi-currency transactions. I have no first hand knowledge of it and therefore am not recommending it, but it may be worth looking into.

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