Use your credit card in Canada? Pay an extra 3% fee.

Currency conversion costs

I'm hardly a credit card newbie, but this one really surprised me. My VISA statement this month had a surprising line entry:

07/14 00000000 PURCHASES*FINANCE CHARGE*FOREIGN TRANS Standard Purch 49.5

I get hit by some credit card fraud about once a year or so (I expect more thanks to the vast amount of stolen card data now on the market), I thought this was another example.

Not so. It was a 3% fee Citibank VISA places on all "international" transactions.

It turns out Citibank VISA has very, very quietly included this fee for years, perhaps decades. Recently, however, it's been split out as a separate line item. Hmm. Such sudden honesty among villains is a wee bit suspicious. This couldn't have anything to do with the November 2004 New Zealand Commerce Commission action, could it?

So now the story is out. Citibank is not unusual, VISA always charges 1% and most banks kindly add another 2%.

AMEX does better with a 2% conversion rate, but AMEX is not well accepted internationally.

Years ago I was taught that the simplest way to manage exchange rates was to use a credit card. That's no longer true. In the future I'll use my ATM card to get cash, and forget the credit card.

Sometimes it's hard to keep straight what company to despise more -- my cellphone company (Sprint), my phone company (Qwest) or my credit card company (ok, so there's Microsoft too). I think today my vote is for Citibank VISA.

PS. The great thing about America is there's always a starving lawyer somewhere in desperate need of a class action suit to pay the bills. Sick 'em Rover!!