Comments on: Banks, airlines deserve no credit for card tricks

By: MeanMeosh

MeanMeosh — Sat, 07 Nov 2009 22:38:18 +0000

Beware of another nice little trick up the credit card companies’ sleeves. When I was in Ireland last week, every merchant I shopped with asked if I’d like for the transaction to be run through in EUR or USD. Turns out, there’s a new “service” that will automatically convert your foreign purchase to USD at the point of sale, unless you opt out. The lovely deal? They give you a crappy exchange rate (they were quoting about 1.57:1 instead of the spot rate of around 1.49:1), and I’m willing to bet your bank will still whack you with the 3% foreign transaction fee since it’s coming from a foreign merchant. Watch out for this when shopping abroad. Get a card with either a low or no transaction fee, and insist that the transaction be run through in local currency.

By: Noe Rosales

Noe Rosales — Thu, 05 Nov 2009 23:29:57 +0000

I am the manager at a foreign exchange company in Beverly Hills, and for years we have been informing the public of the high fees that the credit card companies have been charging. While taking your entire travel funds in cash is not reasonable, what else could one do? Take a combination of both, but leave your travelers checks where they belong, with your bank or American Express. Traveler’s checks are a thing of the past. That is why both American Express and Master Card discontinued the issuance of Australian and Yen travelers checks, no body wants them anymore.

As KF has said, “use your credit card for larger transactions”. But when it comes to taking your travel funds, I would suggest (not just because I work in a foreign exchange place) that you buy your foreign currency before you go. Keep this in mind when you travel. The dollar is no longer the strong currency it was fifteen or twenty years ago. Less and less countries are accepting the greenback for payment. As volatile as it was, some “Foreign Exchange” kiosks in The Netherlands stopped exchanging USD for EURO, this was cash for cash.

While you are still in the States, you will have the option of shopping around for the best rate of exchange. Once you have arrived at your destination, your choices will be narrowed down to two:
1. Spend part of your vacation negotiating for a better rate
2. Exchanging at the first place you find at whatever rate they are offering.

Here are a couple of places for you to get started:
http://www.ezforex – http://www.foreignmoney.com – http://www.travelex.com
All three work the same way, but we offer discounted rates of exchange when a client can pay by check. Yes, we accept credit cards, but as you may have guessed it, the rate of exchange is much higher due to “Merchant Fees”.

By: Chad

Chad — Thu, 05 Nov 2009 01:28:16 +0000

Do you seriously think that after all this time of credit cards being ubiquitous that every company accustomed to receiving credit cards hasn’t already incorporated that cost into their pricing?

Seriously. If the ticket was 300 yesterday, and it cost the company 9 dollars, then that ticket REALLY cost 291. The cost has already, long in the past, been transfered onto you, the customer.

If anything, these companies have an incentive to get you to pay in cash, since they don’t lower their prices when you do. When you buy the 300 dollars ticket in cash, the airline makes an extra 9 dollars (assuming 3 percent)

These surcharges only make sense if the cost of them processing your purchase with a credit card has gone up by the amount of the surcharge. I promise it has not.

This is either a money grab (keep the price the same, add a surcharge for something already incorporated into the price of the ticket), or a way for the companies to appear, in the future, to have a lower rate, for example:

You are looking for a ticket on a travel site. You see a ticket from American Airlines for 300 dollars, and you also see a ticket from US Airways for 280 dollars, which do you buy?

But wait! After choosing US airways, in the final window you see that there are surcharges for 30 dollars! Ha Ha, you chose the more expensive ticket!

By: Ronda

Ronda — Tue, 03 Nov 2009 16:11:23 +0000

I still feel safer with using credit cards on online purchases and travel. (provided it’ll back you up in a dispute) Its better to be hit with a couple hundred dollers in fees then potentially lose a couple thousand dollers in a trip gone wrong.

By: Noah

Noah — Mon, 02 Nov 2009 20:40:35 +0000

“it is illegal (per the agreement with the credit card company) to charge the customer for this fee. Therein lies my anger.I don’t mind they want to recoup the money. I do mind they want to do it illegally and call it something else.”

Even assuming that the airline’s deal with the credit card company does not allow it to charge the customer for the for this fee, there is nothing “illegal” about it doing so. It may be a breach of its contract with the credit card company, but only the credit card company has the right to enforce that contract.

By: EllaJo08

EllaJo08 — Mon, 02 Nov 2009 19:39:07 +0000

My understanding is that it costs the company 1-3% of every transaction to run a credit card. So if you’re buying a ticket for $300, then $9 goes out of the travel company’s pocket and into the credit card company’s pocket. So while it makes sense that they would want to recoup this money, as someone mentioned before, it is illegal (per the agreement with the credit card company) to charge the customer for this fee. Therein lies my anger.I don’t mind they want to recoup the money. I do mind they want to do it illegally and call it something else.

By: Ahmei

Ahmei — Mon, 02 Nov 2009 19:36:41 +0000

Also keep an eye out on PayPal transactions…banks like to sneak in fees where you think you are paying in local currency only to find out afterward that you weren’t. Banks are deflecting to PayPal, PayPal are deflecting to the banks…not fun!

By: Lianne

Lianne — Mon, 02 Nov 2009 18:24:58 +0000

To add to what KF says, check and see if your bank has a partner bank in the country you’re traveling too for ATM withdrawals. I use Bank of America and when I was in China 2 weeks ago I used their partner bank, China Construction for withdrawals. The exchange rate was extremely reasonable and there were no foreign ATM fees since the banks have an agreement.

By: Only Words Can Make You Money » Banks, airlines deserve no credit for card tricks

Mon, 02 Nov 2009 18:08:33 +0000

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By: KF

KF — Mon, 02 Nov 2009 17:24:27 +0000

I’ve bought tickets with my Amex on Air New Zealand and not had a transaction fee. Usually when I travel though I take a Visa from my local credit union since they charge a 1% fee. It is a toss-up sometimes between carrying cash and using a credit card since I don’t like carrying large amounts of money and exchanges can be problematic (I’ve also found fewer and fewer places that will take traveler’s checks).

My advice is to still use your credit card for the big transactions – like hotels that you may need to dispute and pay cash when you can. Bring enough foreign currency to cover your first day or two – ATMs and exchange places in the airport offer the worst rates and you can usually get foreign currency at your local bank plus check what they will charge you for a foreign ATM fee (some can actually be reasonable). Also let them know it will be you traveling so your ATM or credit card isn’t declined. Do your homework if you have to exchange money – in some countries like Japan, exchanges are heavily regulated so you get the same rate wherever you go.

By: Thomas Brenneman

Thomas Brenneman — Mon, 02 Nov 2009 17:15:36 +0000

Capitol One=No exchange fee

By: Bela Fleck

Bela Fleck — Mon, 02 Nov 2009 16:57:05 +0000

Ain’t that the truth. I just got back from a cruise to Mexico and for the first time, I paid cash for nearly everything. Even though I usually have the cash waiting to pay the bill off afterward, it was nice to come home with no bills to worry about at all.

By: Travel-Writers-Exchange.com

Travel-Writers-Exchange.com — Mon, 02 Nov 2009 15:22:48 +0000

Good point about having foreign credit cards. It will help relieve the pressure of added fees. Good point about doing a wire transfer. It will behoove travelers to READ their credit card statements and booklet that accompanies their credit cards. Travelers will be rethinking the way they travel. Sometimes carrying a lot of cash is not a good idea, but more and more travelers will probably carry more than they used to in the past.

By: Ames

Ames — Mon, 02 Nov 2009 14:53:23 +0000

The merchant cannot charge the true cost of the credit card transaction – a percentage of the final invoice – because the credit card agreement forbids it. So the merchant is wiggling its way around the regulations with a flat fee and gambling that few people will make the extra trip to the airport to buy tickets. The fee is low enough to be a better value than going to the airport but high enough to anger us. And if the passenger does go to the airport and pay by cash, there is the side benefit that the passenger cannot protest any problems by protesting the credit card charges. Likewise, no extra costs can be assessed either. Do the airlines take checks? Or PayPal??

The airlines might have picked this maneuver up from TIckettron – take a look a the convenience and other fees for concert tickets!

By: Eric Smith

Eric Smith — Mon, 02 Nov 2009 14:53:02 +0000

Cynthia. The way I read this, those two airlines don’t require you to pay cash, you’re only required to book the ticket in person. Which makes even less sense, when you consider that processing a credit card transaction costs the same amount whether you’re online or standing at the counter.

This is still a pretty snakey ploy since most people will pay the fee rather than drive a substantial distance to the airport. That said, I’m sure Spirit would love for you to pay cash since it eliminates one possible recourse for their customers if the airline tries to screw them. How many cash customers do you think will get a refund for a cancelled flight?