Now it’s gone too far.
When Leticia Lopez returned to Albuquerque from her trip to Puerto Rico, she found an “international transaction fee” added to every purchase on her credit card bill.
See the problem?
Puerto Rico isn’t an international destination. It’s an unincorporated, organized territory of the US with commonwealth status — meaning you pay in dollars and don’t have to show a passport before being let on the island.
Lopez is furious.
I have paid such fees in the past when I have used my Visa card in many countries I have visited and understand that it is warranted in those cases because there are different currencies that have to be converted.
However, in Puerto Rico, there is no other currency but the U.S. dollar. I contacted State Farm Bank and pointed this out to them, as well as the fact that I did not have to use a passport to travel to Puerto Rico nor go through international flight immigration and customs there or on the return.
They insisted that Puerto Rico is international travel, and would not remove the $16 fees in international transaction fees.
Adding an “international transaction fee” to Lopez’ bill is nothing more than a money grab by her credit card company. I suggested that she appeal this decision, which she’s in the process of doing.
This is just the latest in a series of abuses by credit card companies in the wake of credit card reforms that will take affect later this year. I’ve mentioned international transaction fees in several previous posts, including this one. The Center for Responsible Lending also has a thorough report on the issue.
How does this affect you? Now more than ever, it’s important to review your credit card bill often, particularly when you’re traveling. (My credit card company just changed its terms and conditions, and odds are yours has, or will.) These revisions are designed to extract more money from you. And travelers are an easy target.
Dispute any funny fees immediately. If your credit card company insists on boneheaded charges like an “international transaction fee” for purchases in Puerto Rico, dump the card and find a better one.
Update (Jan. 11): Lopez’ bank has responded.
As stated in your Credit Card Agreement and Disclosure Statement, if you use your card to make an international transaction, we will assess a FINANCE CHARGE equal to 1.0% of the U.S. dollar amount of the transaction. An international transaction is defined as any transaction that was acquired in any country other than the United States. Puerto Rico is still considered a Latin America country as it pertains to currency conversion–thus the fee is charged. Visa charges State Farm Bank Visa, along with ALL other issuers for cross border transactions thus being the reason for the charges which were placed on your account.
As a courtesy, I have waived the amount of $16.81 total International Transaction Fees from your account. I do need to strongly caution you that if you use your State Farm Bank Visa card in Puerto Rico that there will be International Transaction Fees and we will not be able to remove from your account.
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Can the attorney general of Puerto Rico file suit ?
Will some one from a San Juan newspaper pick up this story ?
Could they get the U.S. State Department to file an amicus brief ?
Maybe a number of US Territories – PR, VI, Guam, American Samoa – could lobby the Comptroller of Currency to issue a statement.
These aren’t obscure places like Howland island…
I think her own AG can file suit. No need to go as far as getting Puerto Rico’s officials involved, although they certainly could consider doing so.
I had this happen to me with Citibank. I called to have the charge removed and even though I escalated to a manager, they refused. It was $4 but because they refused to honor a long-term client’s request, for a charge that was not fair, made me switch credit cards. The Citibank manager even lied to me, saying that all card charge foreign transaction fees, which is simply not true.
“Puerto Rico is still considered a Latin America country as it pertains to currency conversion–thus the fee is charged.”
Except it is owned by the United States and the currency is the American dollar. There is no “local” version of the dollar and there is no conversion. State Farm is completely in the wrong here, and I think a thorough investigation by either New Mexico’s state attorney general office or the department that handles banking regulation is warranted.
“Puerto Rico is still considered a Latin America country as it pertains to currency conversion–thus the fee is charged. ~ The Bank”
Um, no it’s not. Because there is no currency conversion. Morons.
Sounds like Sarah Palin runs Citibank, “I can see Russia from my house.” & thus I she knows foreign policy. Just more scamming. I hate corporate America and the greedy TARP grabbing bastards like CITI. Use Capitol One, they charge no foreign transaction fee when used in ANY country, and have resolved issues very well when a foreign merchant adds in their bank’s fee (usually 5%) which is lot when I bought a $1000 USD South Aftican tour. Plus Capitol One returns 1% on all puchases, and 2% on grocercies. In short a great card to have..
Soooo. Puerto Rico and/or the U.S. Virgin Islands: Which requires a U.S. passport to enter a United States territory? On which can you buy duty-free? Which has the better duty-free allowance and why? I buy a U.S. postal stamp with American currency and mail a “registration for the military draft” post card to the mainland in U.S. mailbox outside a U.S. post office, but I can’t vote for the POTUS nor VPOTUS on these territories.
Can the incarcerated extremists at Guantanamo be moved to Navassa Island? Can I buy Cuban cigars there without extra charges on my Visa card?
Nobody was faster
“Puerto Rico is still considered a Latin America country as it pertains to currency conversion–thus the fee is charged.”
Since when was Puerto Rico a country. Puerto Rico is still part of the United States though not a U.S. state, yet. All credit cards that say that Puerto Rico is a foreign destination should be ashamed of themselves for failing geography. There is no other currency conversion in Puerto Rico. A U.S. Dollar in Puerto Rico is a U.S. Dollar in the States-period; end of story. I sometimes wish that someone could bring the news of this over to a major media outlet.
Panama also uses the US dollar, but is obviously a different country. However, despite the lack of a currency conversion, I was hit is a 3% fee when I used my Visa there.
“Puerto Rico is still considered a Latin America country as it pertains to currency conversion–thus the fee is charged.”
Considered by whom? Not any government entity.
Currency conversion? I am pretty sure that during her trip the conversion rate was 1USD = 1USD. Although these rates change from day to day.
Puerto Rico is still considered a Latin America country as it pertains to currency conversion–thus the fee is charged
The statement is FALSE, it does not pertain any currency conversion; thus her assumption is WRONG.
Like a good neighbor?! Doesn’t look like it.
I stumbled upon this thread while trying to find out if my credit cards are going to charge me the ubiquitous “international transaction fee” when I travel to Guam next month. I still don’t have a definite answer, nor would I trust the credit card rep over the phone (they’re great at take backs!), so I’ll stick to my usual Charles Schwab Visa that I use for travel. We use this when we’re in Europe to visit my husband’s family because not only is there no foreign currency fee, but they actually give you going rate of exchange for the day, rather than the banker’s rate of exchange that you’ll get with Capitol One.
My foreign transaction fee story was in purchasing a cellular phone from a company in New York. Which shipped to me from New York. But apparently the company’s “headquarter” are in London. And so although I paid for the phone in US dollars from a company in New York which shipped me said phone from New York — I paid a 3% “foreign currency transaction fee”. The credit card company refused to refund it, citing the fact that the company’s headquarters are in fact in London. Bollocks!
Are there any lawyers out there who would like to file a class action lawsuit on behalf of all credit card holders who have been charged a currency conversion fee for territies that use the U.S.dollar?
It seems to me that this would even constitute fraud since the credit card companies are misrepresenting the transactions and are charging for a service that is not rendered and does not exist.
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