Credit Card currency conversion fee?

[lovecruisingtoo]

They cited as examples: cruises that take place in non-US waters, purchases from companies that have a US mailing location but the goods come from outside the US (Cash's of Ireland or Leibkuchen from Germany), portions of flights that are outside the US. They stated that you may even see the fee if your flight starts in the US but ends-up in Europe.

 

In other words, if your credit card company decides that the majority of goods sold at Walmart are manufactured outside of the US, YES - you will be paying the international fee for your underwear and groceries.

 

Just because a majority of the goods a company sells come are manufactured outside the US does not mean that the majority of the cost of the items are going outside the US. How would a bank know how much of the price you paid were for profit, overhead, labor etc? This would be a lawsuit waiting to happen.

 

The current philosophy of the banks is that they will charge the fee if the charges COME from a foreign bank. So if Walmart decided to use a foreign bank for their credit transactions, you would be charged a foreign transaction fee. If a foreign entity utilizes a US bank and you were charged in USD, you would not see the foreign transaction fee. A good example of this is if you go to a Bang & Olufsen store in the US and buy one of their phones or TVs, you will not be charged a foreign transaction fee because they use a US bank and charge in USD. Buy the same phone or TV at one of their stores in a foreign county and you will be charged the transaction fee.

[lcand1923]

Lovecruisingtoo,

I agree with everything you state. The newspaper article was written to alert readers as to changes that they would see in 2009.

 

I agree with what you say about how would the bank know what to charge based upon overhead, labor, etc.

 

But, the article gave an example regarding Cash's of Ireland. You order something from their catalog. You mail the order to a US address. You get charged the transaction fee because the item is shipped from overseas.

 

Using your example, I can't see a fee because the item is in stock. However, if the item had to be ordered, I can see the fee being charged based upon the new rules.

 

I can also forsee a bank putting a disclosure statement in a Revised Members Agreement stating that they will charge some sort of prorated fee on items manufactured overseas. (Of course, this would probably start a major discussion in Congress regarding Favored Nations, etc.)

 

The advice given to readers was to be aware that they would be getting new Members Agreements from their cards and to read them very carefully, especially the wording associated with the foreign currency/international fees.

[lovecruisingtoo]

 

But, the article gave an example regarding Cash's of Ireland. You order something from their catalog. You mail the order to a US address. You get charged the transaction fee because the item is shipped from overseas.

 

 

I would bet the reason for the transaction fee was that Cash's uses a foreign bank - not a US bank. This is the same issue that people have had with Oceania.

 

If you look at the disclosures of most banks, they state something like this: "3% of the U.S. dollar amount of each purchase made outside the U.S., whether made in U.S. dollars or in a foreign currency."

 

If an item was purchased from a company in the US and utilizes a US bank, the credit card company would have to consider this a domestic purchase - not a purchase made outside the US. If, however, a foreign bank was used, then they could make the case that the purchase was made outside the US.

[Bowie MeMe]

If Oceania used an American bank then it would not be an international transaction. I hope that market's pressure will bring them into line or all cruises could have the fees because almost no ships are registered in America nor do they cruise from American port to American port. Also from what I read from British and Canadian posters they are not allowed to buy from American travel agencies so I really can't buy a cruise as an international transaction. IMHO

[StanandJim]

I don't understand this whole silly thread.

 

Not everyone is charged that fee, first of all, so if you are charged the fee it is your credit card who assessed it.

 

If you don't like your credit cards rules and regulations, please take it up with them. Oceania has the right to bank at any institution that it chooses.

 

To make this discussion even more esoteric, if you do get charged the fee, O will give it back to you as a courtesy onboard credit, so you're not out any money. What IS the problem?

[LHT28]

Also from what I read from British and Canadian posters they are not allowed to buy from American travel agencies so I really can't buy a cruise as an international transaction. IMHO

 

Incorrect, I use a US agent

 

 

Lyn

[lcand1923]

Lovecruisingtoo,

 

You're right. Sorry for being so dense. But, now I'm really puzzled.

 

We've paid 4 deposits, 4 final payments, prepaid about 20 shore excursions and settled 2 ship-board accounts on O. (The difference between ship-board accounts and final payments is caused by two last-minute cancellations due to health problems.)

 

None of these resulted in foreign currency/international currency fee on our credit cards. Most were paid via Chase VISA cards (3% fee), one with a State Farm Bank VISA card (1% fee). Only one cruise started and ended in the US.

 

Does O only use the Irish Bank for some of its transactions? Does the TA used to book the cruise drive how O processes the credit card transaction? Why wasn't I charged a fee when so many others were? Is it strictly luck?

 

(StanandJim,

I'm not so wealthy that I can ignore a 1% - 3% fee. Granted I wasn't charged, but the shipboard credit wouldn't have done me any good on those two cancelled cruises. It would have been money out of pocket. So, I don't consider this a silly thread.)

 

All other posters,

I know this topic has been discussed at length in the past. However, it had died until very recently when a lot of new cruisers started being attracted to Oceania with their various discounts. I assumed it was the change mentioned in that newspaper article that I've been referencing. Now, I'm not sure.

 

Any thoughts?

 

Connie

[Rickey 88]

Icand1923...

I try to stay out of these discussions because they do go on and on and on.....

However, there are ever so many misconceptions regarding this subject that as a retired credit card executive, I have to get in again this one time:

1. Yes - the majority of Oceania's deposits and payments never incur any kind of transaction charge because the majority of banks have chosen not to levy the charge!

2. The charge (mislabeled "foreign currency fee"), is one which was dreamed up by Visa International and Master Card, but not all banks have chosen to add the fee to transactions. Only a limited number have, as an example - The JPMorgan/Chase group of banks.

3. As a merchant, Oceania has absolutely NOTHING to do with this charge - it was the bank used by the traveler. Oceania does not receive this charge, yet has graciously agreed to credit the OBC account of those who were involved.

4. And finally, I have no knowledge of why Oceania has chosen to process their transactions through their present bank, but no matter what their reasons, it is their absolute right to so. All merchants chose their "Transaction Processing Bank" for reasons such as cost of service, speed of processing and accuracy of accounting detail. I am sure those few who are demanding the Oceania "change banks' haven't a clue as to how expensive and cumbersome such a task would be!

Banks over these past few years have become very creative in finding way to tack charges upon unsuspecting cardholders and this is just one example. Others are accelerated closing dates, comparison of FICO scores, analysis of buying patterns, etc. You might want to read the following for a better understanding: http://www.creditcards.com/credit-card-news/visa-international-service-assessment-fee-1267.php

I am so happy to be sitting on the sidelines while all this furor boils around.....

[StanandJim]

(StanandJim,

I'm not so wealthy that I can ignore a 1% - 3% fee. Granted I wasn't charged, but the shipboard credit wouldn't have done me any good on those two cancelled cruises. It would have been money out of pocket. So, I don't consider this a silly thread.)

 

If you had been charged the fee, it would have been reversed when you cancelled, so this is still a silly thread. :confused:

 

I sometimes wonder if these "It has not happened to me, but what if" threads are genuine. How long can you fight a dragon that is already dead?

[lcand1923]

Rickey 88,

 

Thanks for the link and for your detailed explanation. I will consider myself lucky that my Chase issued VISA did not incur the fees when I used it with Oceania because it looks like it should have.

 

StanandJim,

Sorry you think I'm not genuine, I am. I worked Quality Improvement so long, that I am always trying to solve problems even when they did not happen to me.

 

I think Oceania provides a good product. I want others to have the good experiences that I have had with it so it stays in business. My continuation of this thread is part of that process.

 

I will return quietly to my cave with all of the other dead dragons now.