credit card usage

[drefinnej15]

Hi Len,

I live in Coram out in Suffolk county:D

[alphomegait]

I read this thread with a lot of interest because of a 1st time to the UK cruise I am taking this summer.

I called to get a pin number for my visa yesterday. The young lady helping me told me that there would be a 3% surcharge on any purchases and 3% on any cash advances (even if you put some money on the card before making the trip).

I budgeted 3k in spending money for the trip, so $90 in fees. That is not much for the convenience of not having to carry large sums of money around with you.

Is there a better way? Can I get a card through a UK bank that will bypass the fees and is it worth it?

[MATHA531]

I read this thread with a lot of interest because of a 1st time to the UK cruise I am taking this summer.

 

I called to get a pin number for my visa yesterday. The young lady helping me told me that there would be a 3% surcharge on any purchases and 3% on any cash advances (even if you put some money on the card before making the trip).

 

I budgeted 3k in spending money for the trip, so $90 in fees. That is not much for the convenience of not having to carry large sums of money around with you.

 

Is there a better way? Can I get a card through a UK bank that will bypass the fees and is it worth it?

 

Where are you from? For argument sakes, let me assume you are from the United States.

 

In many respects, on many things, the United States is almost like a third world country in terms of thinking our (I'm from the USA so no flaming please) way or the highway in so many things. Why are we still the only country on the outdated English system of weights and measures? Why do we waste so much money printing a $1 banknote when almost every other country has abandoned paper money for such a trivial amount? Why is our mobile phone system different than the rest of the world and why do we use different frequencies in those cases where we use the same technology?

 

Having said all that, let's look at the credit card issue. For what it is worth, the USA banking system has chosen not to invest in chip and pin. Probably their bean counters have done a survey and discoverted the cost to converty all the terminals, re-issue all the cards is greater than the amount they lose due to fraud. Too bad if it puts consumers at somewhat of a disadvantage. Now for the most part, as long as a terminal is manned (or womanned) not to worry. In theory the old fashioned archaic magnetic strip cards are 100%. Almost all the chip and pin terminals issued in the UK will take the old fashioned American cards; although from time to time you may run into an ignorant clerk but usually the manager will be there to assist. So you probably don't need a pin. Getting a pin on an American magnetic strip does no good for purchases anyway. The pin in these cases is not stored on a chip...it is stored in the bank's computer and used to authorize those cases when a credit (or debit) card is used for a cash advance. So don't bother with the pin. If you're Canadian, this doesn't apply. Canada has chosen to join the 21st century.

 

As far as the 3% fee. This is an ongoing discussion and basically the US banks lost a class action suit concerninbg disclosure of these foreign exchange fees. They've always been there but now they are required to specifically state what they are. Essentially this is the way it works. Both Mastercard and visa use the wholesale interbank rate to make currenc y exchanges. This is the rate, and it varies by the minute literally, that you can see say on www.xe.com. For their protection, they add a surcharge of 1% to this. Now it gets interesting. Your bank is free to add an additional fee to this even though they have nothing to do with the exchange. Most of the big credit card banks in the USA, citibank, Chase, Bank of America come to mind, indeed charge an additional 2% to make the total charge 3%. This now must be spelled out completely in the bank statements.

 

Now there are several banks who don't add surcharges to the 1% mc/visa surcharge. Capital One, on its US credit cards, not only doesn't add an additional surcharge, they eat the 1% mc/visa fee. So when you make a foreign charge with a Capital One credit card, you get the exact inerbank rate. Charles Schwab Bank is another that does this (in addition if you have a Schwab Brokerage account, they give you an additional 2% rebate for each credit card purchase into the account). USAA Bank does not surcharges but passes along the 1% visa fee. Many credit union credit cards do the same as USAA.

 

Now there are other ways the banks rip off customers (as do merchanbts). We can discuss something called dynamic currency conversion where a merchant tells you that as a favor, he or she can write the charge up say in US$ if your card is issued in the USA. But this is a rip off. They use a rate far worse than the interbank rate used by mc/visa. MC/visa now will also slap their 1% foreign transacation fee on such purchases and the near criminal banks also slap on their 2% surcharges described above. Using dynamic currency conversion is almost never a good deal. MC/visa regulations require merchants pulling this scam to offer you a choice. But experience shows, they usually don't. They present you a slip with the amount converted hoping you won't notice but if you notice and ask them why they converted the currency, they have a whole stack of lies ready like we have no control over it (they sure do, the terminal asks if the customers wishes to have the currency converted before the transaction is completed), that the amount shown in your curtrency is just there for reference (they why are you asked to sign that you were offered the option of paying in local currency and accept the conversion as final), that it's too late (it's never too late, any transaction on a terminal can be voided, not credited but voided) or the famous "no speak English." If they pull this scam on you, tell them to re-do the charge properly in local currency. If they refuse, instead of signing the sales slip, circle the amount in local currency and write local currency not offered. Tell the crook in no uncertain terms that you will be disputing the charge and it will be charged back.

 

Lots of ways banks and merchant have to rip you off if you use a credit card but there are ways you can fight back. But I would never use cash. You never do as well using cash as most erxchange places put fees far higher on exchanges than do the banks and credit card companies.

[drefinnej15]

Thanks Matha for your feedback as well as everyone else. Since I am the one who started this thread originally, I just want to say thanks to each of you who contributed your feedback. This was an important issue to raise! :D

[Giantfan13]

I read this thread with a lot of interest because of a 1st time to the UK cruise I am taking this summer.

I called to get a pin number for my visa yesterday. The young lady helping me told me that there would be a 3% surcharge on any purchases and 3% on any cash advances (even if you put some money on the card before making the trip).

I budgeted 3k in spending money for the trip, so $90 in fees. That is not much for the convenience of not having to carry large sums of money around with you.

Is there a better way? Can I get a card through a UK bank that will bypass the fees and is it worth it?

 

 

There are many threads about credit cards, debit cards etc, which are the Best to use and why.

Before we did our Baltic crusie last August, we delved into this in depth. As Matha has so well described, there are certain cards that do not charge that hated 3% transaction fee. And yes, Capital One is the main CC that doesn't. As soon as we heard this, we went right out and got one. And what has been said is absolutely correct. Charge to your hearts content, and you pay no transaction fee. There are a couple of other cards out there that do the same thing, Schwab has one, so does Fidelity, but Capital One is by far the most popular, and with it, you also earn your usually 1% cash back rewards or whatever it is.

WE used this Cc extensively, and we also had a debit card from Fidelity as we have an account with them, So when we needed to use the ATM, we used Fidelity and when we needed to charge we used Capital One. You do NOT want to do any cash advances at ATM's, as there are hefty fees involved with that.

I know to some people, it isn't worth all the hassle to get other CC's but we wanted to save those extra dollars for something else, and it is no big deal to have this CC.

 

Hope this helps

 

Cheers

 

Len

[beachgal]

I'm from US and last year, a London department store had a problem with my Visa card because it did not have the chip. The clerk had to call a manager who came and authorized the small purchase.

Also in a couple of smaller towns in France, several of us had Visa rejected because we didn't have the chips and we had to pay cash.

Hopefully things have changed since then. We're headed to Scotland at the end of May and using credit card as much as possible but will always have some cash on hand.