(mis)labelling of international transaction fees

[ryberg]

This may be worth noting. A guest who recently confirmed a stay with us reports that while we only placed one charge on his card (the confirmation deposit) during the booking process, and that charge came out correctly on his end (in fact a dollar or two lower than the amount in question, interestingly enough), a second charge from us in the amount of about $8 US appeared on his end, as well.

Turns out that the second charge is 3% of the main charge, so not surprisingly, we're talking about an international transaction fee of the type discussed here before, which the credit card companies and individual banks/card issuers often apply in such cases. The difference here, however, is that Bank of America has also listed that additional charge as being from Playa Maya. The guest even copied it from his statement and emailed it to me to show it to me.

As I told him, I find this highly questionable, first because it's just misleading and confusing, suggesting that we charged him twice when we did no such thing, but also secondly because it looks an awful lot like an attempt to disguise the fact that they are applying additional fees to transaction by putting it under our name as the vendor, effectively blaming us for it.

So I'd like to know if others have seen these fees appearing as separately listed items on their statements, and if so, if they were properly identified as fees or (improperly, imo) labelled with the name of the vendor charging the original amount to which the fee in question is being applied. I don't have a BofA card and the only one I use (Chase) builds any added fees right into the original transaction, which seems to be more the norm at least up to this point, based on occasional comments from guests here.

Well I'd be interested to know, and in the meantime, fair warning that you may want to double check with your card issuer before assuming that some vendor here has charged you something additional in this way.

Steve

[beer_dude]

How do the major credit card issuers stack up? Below are the international transaction fees from each issuer:

• Capital One: 0% transaction fee. (Capital One not only doesn't impose its own fee, but it also eats the 1% fee that Visa or MasterCard impose.)
• Providian: 1% transaction fee
• American Express: 2%
• Juniper Bank (issuer of US Airways credit card and other partner-branded cards): 2%
• Bank of America: 3%
• Chase: 3%
• Citibank: 3%
• HSBC: 1%-3% depending on card (Updated 4/3/06)
• MBNA: 3%
• U.S. Bancorp (U.S. Bank): 3%
• Wells Fargo: 3%

Looks like Capital one is going to get all of my international business!

[Dijo]

charges is Mexico is: in all other countries, the vendor i.e. Playa Maya absorbs a fee for all sales through Visa of anywhere from 3% - 5% depending on the dollar amount business they put through Visa. In other words, if I put $100 US on Visa, Playa Maya would collect only $95. Visa in turn bears the responsibility of collecting said charges from purchaser. The government of Mexico does not allow Visa to charge Mexican businesses this fee, so in turn Visa adds it to the purchaser's bill. In all fairness, I think it should be listed as their fee (Visa's) and not the vendor's.

This has been a problem for businesses in Cozumel and explains why a lot of smaller businesses there don't accept credit cards.

[ryberg]

I think this to some extent is conflating commission (what the vendor pays to the banks/card companies on each transaction for the privilege of offering customers the chance to pay using such-and-such card, which here often approaches 5%) and international transaction fees (what the card user pays for the "privilege" of using his/her card outside his/her home country, arguably to cover the bank and card issuer for fluctuations in exchange rates and the like).

But yeah, looks pretty bad if they separate out the latter and label it as coming from the vendor rather than the bank.

Interesting stats above that on transaction fees. What's the source on that?

Steve

[beer_dude]

Originally Posted by ryberg

Interesting stats above that on transaction fees. What's the source on that?

Steve

Hey Steve,

I got pretty hacked when I got my credit card bill from Bank of America. I don't remember them showing you as charging the fee though or I would have given you a call. I got my stat's from here

I am definatly going to use my capital one card in the future when travelling internationally.

[Dijo]

so in effect, Visa (example) will charge Playa Maya a fee for the priviledge of having Visa and is also charging the consumer? Sounds like "double dipping" to me.

For this very reason, we stay away from using our credit card unless it is "absolutely" necessary.

[maureena5]

Hi Steve,
Citibank lists this charge separately (the very last item listed for the month). It is listed as "Purchses Finance Charge Foreign Trans". The charge is further explained further down under statement messages. It essentially states that our card provides the convenience of transacting in foreign currencies & that each purchase is subject to a one-time foreign currency transaction fee. We happened use to use our card at a variety of businesses. None of the businesses are mentioned in the charge.
Maureen

[fijidawg]

what showed up on my Bank of America Visa card statement. It looks like it was a charge based on all my international charges and was not broken out for hotel, car, etc.

[Dijo]

representative. For all purchases in Mexico, they will add a 2.5% "Foreign Currency Conversion Fee". This will be incorporated in the rate of exchange i.e. if the going rate is 10 pesos / Cdn. dollar by paying through Visa you would be charged on a bill of 4,000 pesos 4100 pesos converted into Cdn. dollars. This is not shown as a separate item. There is also a fee for US funds for us Canadians, which I never realized before, because is does not show up separately on our Visa bill. It is 1.1%

Her final words were "it is better to pay cash than use your Visa card for large purchases in Mexico". In our case we pay $3.00 to use the ATM in Mexico and Traveller's cheques are free to anyone over 55 years of age. So standing in line at the bank and cashing TC's is definitely to our advantage. On checking back to last year, we spent $12.00 in ATM transaction fees for a 2 week period. We felt this was OK, because if the line at the bank was long, we'd use the machine.

So Visa is definitely "double dipping". Charging vendors 3-5% and cardholders 2.5%. That's between 5.5% and 7.5% profit on every transaction.

Steve, just wondering. Do most hotels/businesses prefer cash or credit cards? Thanks.

[MN GKJ]

Steve Wells Fargo discloses it as an international fee, MBNA which i use now just went to 1%, will use in Canada in a week. B of A, shouldn't be doing that!!!!!!!

[ryberg]

[quote=Dijo]Steve, just wondering. Do most hotels/businesses prefer cash or credit cards? Thanks.[/QUOTEOh, no brainer: cash. Cash is king in that regard. I can't imagine why an establishment would prefer to run a credit card charge rather than cash if there are no logistics prevening cash (for example, credit cards are a great invention for charging the deposit to confirm a stay weeks or months prior to arrival).

Credit cards are just a reality of the business, though.

Steve

[ronp3660]

Steve,

Just got my Citi Bank bill in the mail showing the deposit for the hotel room at the Playa Maya. The forgeign transaction fee (2.99%) is listed as "Purchases*Finance Charge*Foreign Trans." I guess perhaps only Bank of America is confusing their customers as on the Citi Bank statement it is relatively clear. It is good to know about the foreign transaction fee as I will now be dealing only in cash on our trip in December.

-Ron

[Dijo]

charges separately and correctly; unlike TD Visa. They just incorporate the charge in the exchange rate they use to convert from pesos to Cdn. dollars. When you look on the back of your Visa bill, in very, very faint print they list foreign exchange fees, but do not explain how they apply them.

Sorry Steve for the "no brainer" but if we ever attempted to pay cash in the US/Canada for our week's hotel bill I'm sure there would be some shocked front desk people. Hotels here do not want cash and if you insist on paying cash, they collect a deposit for use of the telephone, or do not connect your phone and it takes forever to check out. Different countries; different preferences.

[kittiekat]

Hi Steve. We have a Bank of America account and it does show the 3% international fee as coming from the particular vendor not B of A. I called about this months ago because I found it confusing and inaccurate. We use our B of A debit card to pay our Sky bill each month.(Sky will not accept our local Santander debit card for payment) See example of our Sky bill below. Only by looking carefully and in more detail on-line does it show me this:

Transaction Detail - Fee

What is a non-Bank of America ATM fee?

This fee, also known as a foreign transaction fee, is assessed each time you use an ATM machine that does not prominently display the name and logo of Bank of America or Fleet National Bank. Additional information about ATM fees is provided in Frequently Asked Questions.

For complete details about fees refer to the Personal Schedule of Fees. Look for the Miscellaneous Fees section in the schedule.
+++++++++++++++++++++++++++++++++++++++++++++
Account Nickname: joint
Account Type/Number: Regular Checking-76xx
Type: Debit
Transaction Description: CHECKCARD 0510 SKY RETENCIONES MEXICO DF 749xxxxxxxxxxxxxx
Date: 05/12/2006
Reference Number: 0009xxxxxxx
amount: $1.46