Folks,

I had an unpleasant experience with Bank of America last night.

We will be spending several weeks on a self-hire canal boat in France in October. We recently reserved the boat with Le Boat, a canal boat company that takes payment in US dollars and has US offices. I booked via the phone with a very nice woman in Florida.

Unfortunately, when I got my Visa bill, BoA had slapped me with the dreaded foreign currency fee for the entire cost of the boat! After some research, I found that BoA and Chase both changed their rules for the fee earlier this year. It used to be that they only hit you with the fee if you used the card outside the US; now they will hit you with it if the company you are dealing with even PROCESSES the transaction outside the US. Yes, even if the entire transaction is in US dollars and takes place in the US!

We use a Capital One card (with their no-foreign-currency-fee policy) for all of our international purchases and travel, but it never occurred to me to do so for this transaction, as it took place entirely in the US!

After a lot of arguing with BoA last night, I finally got them to waive the fee (almost $150!) as a "one time courtesy," but nobody there could ever really give me an answer when I asked them if I needed to ask every merchant I ever did business with if they were headquartered internationally or if they might process my transaction overseas.

The foreign currency transaction fees that the credit cards charge have always burned me up, but I felt this one was pretty over the top. Just keep it in mind when you are making plans with companies that might process your payment somewhere other than the US. In my research, I discovered that a lot of people were getting dinged with the fee when they book tickets with Aer Lingus (vie their US site) or even, in some cases, Expedia!

-Toby

Wow - I'm floored. Just another reason to use my Capital one I guess.

Wow Toby, thanks for sharing that information! Don't you just hate it when you think you're doing the smart thing and somehow it goes wrong? I was glad to hear that BOA refunded those OUTRAGEOUS fees!

Thanks for posting this Toby. I have a BOA card and I remember reading about this change but did not realize how easily one might be charged this fee. This will be an important item to keep in mind especially when reserving vacation rentals through some of the operators in the US. Many of them are small locally owned dealer but several of the larger dealers such as Cuendet and Cottage4you are owned by Wyndham.

I did take a look at Le Boat and I agree it does look as if it is a US company. The only clues on hindsight is in the footer. It says they are part of TUI Travel PLC (a UK FTSE 100 company).

It sounds like best way to be certain is to use the Capital One card for all vacation purchases.

My daughter is joining us in Italy for the first time and she has asked about using prepaid VISA cards.

Is this kind of card accepted at all the places that accept a regular VISA card, and will this allow you to avoid what is now possibly a big transaction fee?

BofA sucks in so many ways. I have my checking account there for historic reasons ---- my local bank has, over a period of 40 years, evolved into BofA.

Last month, I was in California at the end of the month. Turns out that, because August 1 and 2 were weekend days, some automatic transfers into my checking account did not occur. I knew my balance was low, but when I went to a BofA ATM in Berkeley on Monday, I showed a balance of several hundred dollars and the ATM "gave me" 200.

Imagine my surprise when I got an insufficient balance fee not only for the check that cleared later that day (clearly my fault) but also for the cash I had gotten from the ATM. It was only after a half hour on the phone with a succession of rude employees that I said, in frustration, "fine, I've had an account for 40 years but I'm closing it this afternoon".

These are apparently the magic words. As a favor, she credited me with the 35 dollar fee. (Mind you I had said all along that I was a 40-year customer, and last time I had any kind of overdraw was ---- can't even remember any.)

Oh, and to be snide, the first person I spoke with thinks the past tense of "overdraw" is "overdrawed" (and this was not because of her being foreign).

quote:

Originally posted by Debra:
My daughter is joining us in Italy for the first time and she has asked about using prepaid VISA cards.

Is this kind of card accepted at all the places that accept a regular VISA card, and will this allow you to avoid what is now possibly a big transaction fee?

Hi Debra, we looked into these last summer when Becky was going to Australia. My understanding is 1) you can still get hit with the conversion fees - you need to check with the bank that issues the card 2) she'll always need to be aware of the balance on the card. Why? Because if she goes to use the card at a store for a purchase which is more than what remains on the card, she'll need to be able to tell the store exactly how much is on the card to use up that balance, and then pay the rest in some of the form (like cash). Does that make sense?

Many of the parents who were sending their kids opted for these b/c it let them keep track of their kids spending on-line, add cash to them over the computer if they saw their kids were running low, and kept control of their kids spending b/c they could never spend more than what was on the card.

We opted to get Becky a Capital One Credit Card on our account and warned her under pain of death not to purchase anything extravagant. It actually worked great for her and us and she still has the card today (now she can go shopping for clothing and I do not need to go along ). She's trustworthy that way. Sammi, on the other hand, will never get a credit card .

Anyway, I hope that answers your question.

Thanks, Kim.
The most surprising thing about your response? That Becky is old enough to have ANY card!
We must be having fun, because time is sure flying by.

I also had a similar experience with Citibank charging a foreign transaction fee for a partial payment of the Food Lover's Tour I went on. The company I dealt with was in Canada but it never occurred to me that I'd have a foreign transaction fee. I quickly had them charge my Capitol One card for the further installments so I wouldn't incur any further FTF's.

Toby (my niece just married a wonderful fellow named Toby....but I digress ).....glad that you got your refund at least!

Any bets on when Capitol One will change their much appreciated "no foreign transaction fees" policy?

Ciao, meow

Pokey

I am really confused.

If you have a BofA issued VISA card (not an ATM card tied to a bank account) do you incur these large transaction fees when you charge something FROM the USA to an account that is in a foreign country?
But not when you charge something while IN the foreign country?

I ask this because my husband uses a AAA card that is issued,and payments made to, BofA. We have never incurred anything like the outrageous fee Toby faced (and dealt with very well. Bravo, Toby).

And if you have a BofA issued ATM/Visa card connected to a bank account at BofA, what is the standard transaction fee at an ATM in a foreign country?

i.e., for our ATM cards, from Wells Fargo, the fee is $5 per transaction, plus another smaller fee if the ATM is not one of the symbols on the back of the card. This is "normal" to me and we are okay with this.

But my daughter and s-i-l only have BofA cards, VISA/Atm. And this is making me nervous.

quote:

And if you have a BofA issued ATM/Visa card connected to a bank account at BofA, what is the standard transaction fee at an ATM in a foreign country?

I can answer this part, at least: It's' been $5 per transaction, and is about to go up (or has already gone up) to $10 per transaction. This is in addition to any conversion fees, etc, which are incorporated into the "exchange rate" you get.

This fee is why I only take the BofA ATM card with me for emergency use in case my other ATM card (Capital One) doesn't work, for some reason. I haven't had to use it at all in the past few years.

quote:

Originally posted by Marian:
It's' been $5 per transaction, and is about to go up (or has already gone up) to $10 per transaction.

Wow, thanks, Marian,
It appears that BofA is making their banking customers pay for all those bad mortgage loans they picked up when they bought Countrywide.
So much for loyalty to their customers.

Debra, I mis-spoke.

Checked the BofA website, and then back here. Turns out the $10 fee was for an ATM transaction with a BofA credit card abroad, in other words, getting a cash advance.

BofA still charges "only" $5 per transaction, plus conversion fees.

This happened to me with British Air. When I paid for my airfare, Chase charged me a foreign transaction fee. The British Air office that put through the charge is in New York. I called Chase to complain, but they weren't willing to credit the fee. Luckily British Air sent me a check - they said this has been an ongoing problem with several banks.

Debra,

I'm not clear on what you're asking as far as FROM the US TO a foreign account, but I can shed a little more light on this subject in general from the research that I did after this happened.

1. It used to be that credit card issuers (Visa, Mastercard, etc) and banks that used them (BofA, etc) often rolled these "foreign transaction" fees into the exchange rate they used to convert euros (or other currencies) into dollars. It was very difficult to know exactly what they were charging you because they didn't separate the fee out; you just saw an exchange rate, and would have to figure out the "standard" exchange rate for that day and then calculate the difference between that "standard rate" and the "exchange rate" that the bank charged you.

2. There was a class action lawsuit that addressed this issue a couple of years ago. I actually got a little money out of a credit card company because of what the court decided was a "deceptive practice."

3. US laws were recently changed; partially because of the new laws (and partially as a result of the lawsuit), these "currency exchange fees" now have to be spelled out and separated on your bill. It's now obvious what they are and exactly how much they are.

4. Unfortunately, portions of the new law weren't written very clearly, and the issuing banks are taking advantage of it. This is where the problem I experienced comes into play. Under the new laws, issuing banks (BofA, Chase, etc.) are now charging fees on transactions that are PROCESSED outside the US.

It used to be that if you bought something from someone, paid US dollars, and both of you were on US soil, there was no fee, no matter what. In many cases, even if the company you were buying from was outside the US, as long as they processed the payment in US dollars, there was no "foreign transaction" fee.

Now, as I understand it, if you buy something from someone, pay US dollars, both of you are on US soil, BUT the company you pay PROCESSES the transaction elsewhere (in other words, they're headquartered elsewhere and do any part of the financial transaction there), you now get hit with the "foreign transaction" fee!

It was so weird to see this fee on my statement. I paid in dollars. The invoice I got from the boat company was in dollars. The amount on my credit card statement was exactly the same as my invoice from the company... in dollars. And then they added a 3% "foreign currency" fee! Ummm.... FOREIGN???

Of course, when you start getting into ATMs for cash withdrawal, that's another issue entirely. As I understand it (and now I may need to do more research!), the same rules apply that always have.

Many banks (including BofA) DON'T charge any sort of extra "foreign currency" exchange fees, and often actually give you a pretty darn good exchange rate. Some banks DO charge an extra flat fee for using a foreign ATM, but (ironically) BofA has reciprocal agreements with banks in many countries. As long as you use ATMs associated with those banks, there are no fees at all! We can use BNP Paribas ATMs in France.

SO... we use our Capital One card for CREDIT purchases in Europe (and now any time we think our purchase might be processed outside the US) and our BofA ATM card for CASH in Europe.

Whew! Could they make it any more complicated for us!?!

-Toby

Toby,

It's great that your bank has a reciprocal agreement with BoA re: no foreign ATM fees. However, the number of such banks and their locales are quite limited. They are as follows:

"Bank of America has a no-fee ATM agreement with the following banks: Barclays (United Kingdom), BNP Paribas (France), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada), Westpac (Australia and New Zealand). Withdrawing money with a Bank of America debit card from one of these banks’ ATMs is fee-free."

Notice that no bank in Italy has such an agreement. That's why I opted for a true global no-fee card from Schwab.

Duane,

Thanks for the Schwab tip. As we get closer to our goal of starting our business in Europe in earnest, I'm getting more interested in good multi-national solutions for purchases and transactions.

I'm starting to think that it's even more important as we "transition" over the next few years, traveling a lot with family and friends who we'll be arranging a lot of things for rather than just having them pay us a flat fee.

The cruises and tours we lead will likely primarily be in France, Belgium, the Netherlands, and Germany; I'd like to find a good "one-stop-shop" bank or card for easy use in all of those PLUS the US. Oh, and would chip-and-PIN be too much to ask, too?

-Toby

quote:

Originally posted by Toby:
Whew! Could they make it any more complicated for us!?!
-Toby

Probably, but you certainly helped to clarify everything.

quote:

Originally posted by Pokey:

Any bets on when Capitol One will change their much appreciated "no foreign transaction fees" policy?

Ciao, meow

Pokey

Hopefully not anytime soon. I recently spoke with one of their customer reps, and he told me they are really trying hard to be the card of choice for foreign travel.

FYI, Cap One, does charge a cash advance fee of 3% or $10 (whichever is greater) to withdrawal funds from an ATM. Don't quote me on that though, another rep told me there was no charge :-/

quote:

FYI, Cap One, does charge a cash advance fee of 3% or $10 (whichever is greater) to withdrawal funds from an ATM. Don't quote me on that though, another rep told me there was no charge :-/

If you are using your Capital One credit card to get a cash advance, this is correct.

If you use your Capital One Money Market card to get cash, there is no charge.

BofA really sucks I agree. Not only do they charge you outrageous fees they steal you money.

My companion had an account with BofA when he was a post doc at MIT. He used his atm card in France when he returned home until one day it stopped working. They never sent him a new card and when we went to find out what was going on th entire building was gone. So at another branch they said that he had abbandoned his account and tht the money was sent to the state comptroller.

If his account balance was escheated to the state, it is still his money. He just has to file paperwork to get it back from the state. That rule is in place to prevent companies from keeping your money forever when they have had no contact with you (measured in transactions on the account...in Louisiana, it is after 5 years). Dormant accounts are a HUGE target for internal fraud, so once an account doesn't have any transactions for some period of time, they are flagged as "dormant", and it takes supervisor approval to let any transactions through. After no transactions for a LONG time, the bank has to send the money to the state. To find it, google "unclaimed property" and the name of the state to find the right department.

You'd be surprised at how much money is out there unclaimed!

Anne

I just got a notice from the bank associated with the Visa Card associated with my UBS Brokerage Account. It covers certain changes to my credit card account.

Down there in the fourth paragraph, under "Foreign Transaction Fee" I see -----

quote:

We are not changing the amount of the Foreign Transaction Fee that is assessed when you make a Foreign Transaction with your accouont; instead we are expanding the type of transactions that are considered Foreign Transactions. If you use your Card or Account for a transaction with a business or entity located outside of the United States or for a transaction in a currency other than U.S. dollars (each a "Foreign Transaction"), we will charge the Foreign Transaction Fee that was previously disclosed to you.....

So maybe this is what people are seeing. (I love that the paragraph begins with "We are not changing...".) This is not a credit card that I use very often, if at all; I just take it with me as a backup. But probably other banks are doing this as well...