I don't recall whether anyone has brought this up, but I got a letter from Bank of America today telling me they were going to start charging a 3% foreign exchange fee for credit card charges in US dollars that are processed outside the US.

I think that is exactly what Regent is doing, using a foreign bank to process payments in US dollars.

Seems to me this whole thing is crazy. Somebody has an idea to save a few bucks by using a foreign bank, and sure enough the credit card companies find a way to make money off of it. Why didn't everyone just leave well enough alone in the first place? Tom.

Tom, that seems ridiculous! However, as has been mentioned before, Capital
One has no such charges, and when I get my bill and compare to the rates emailed to me daily, they are right on target!

Tom,

Regent and Oceania use a bank in Ireland to process their credit card charges. While Bank of America is using this fact to increase revenue, other cards such as AMEX and some MasterCards do not impose a foreign transaction fee unless the transaction requires a conversion from a foreign currency to US Dollars.

As a good-will gesture, upon request, Regent will give you an OBC or check for the amount of the foreign transaction fee imposed.

Tom, you might want to read this post from last summer:
Regent & Oceania Foreign Transaction Fees

Tom, we got the same letters today! The deal for us is that we did not ever apply for BofA credit cards. We both had other issuers (I think in this case it was MBNA) which no longer exist and the cards became BofA cards. So, we didn't choose to do business with BofA in the first place and now we really don't want to do so. Let's just say that those cards won't be in our wallets much longer.
Debbie

Thanks Karen. I remember that post.

The point I wanted to make is that now Bank of America, a very large bank, is saying they are going to charge a 3% foreign transaction fee on charges made in US dollars processed abroad, exactly the way Regent processes its payments.

Now that Bank of America is going to do it I think it's just a matter of time before the rest of the credit card companies follow.

It's no longer going to be possible to contest these charges. They are now clearly stated up front. That would mean Regent would have to refund more and more of these fees and it could turn into a significant amount of money. Tom.

Tom, what was the one credit card that someone mentioned that isn't doing this yet?

I think you're thinking of Capital One. We never use it in the USA but ALWAYS use if in foreign countries or doing foreign transactions....no exchange fee.

Capital One, Karen. But here, Tom is talking about a FTF on charges made in DOLLARS, not foreign currency.

I know that now. I just got confused by Dave's post :)

I don't know for sure if all credit card companies will follow Bank of America, but I guess that's pretty much what happened when foreign transaction fees first came into practice. Hopefully, AmEx and/or other card companies will see it as a competitive advantage not to impose this fee, like Capital One currently does with foreign fees.

But I think now that Bank of America has joined Citi in imposing this fee, I have to think at some point Regent will stop its voluntary practice of refunding the fees. In the past year or so, the charge caught most people by surprise because (a) it was an obscure fee buried in the fine print of credit card terms and (b) passengers wouldn't know Regent did its credit card processing in a country outside the US. But as this fee becomes more common and widespread, Regent may decide to simply disclose up front that credit card charges will be processed in US dollars in a foreign country, and stop paying refunds of the fee to its passengers out of its pocket.

In past discussions about this issue, we've theorized that Regent must do its credit card processing in Ireland because it's cheaper for them. But there's no way it's 3% of transaction amount cheaper. So if they start paying out the 3% refund on a substantially larger number of cruise and excursion payments, it will quickly cost them more than whatever they save by banking in Ireland. And it therefore seems likely to me that they will either change their banking practices to be able to process payments from US customers via a US bank, or they will stop paying out refunds to those passengers who use credit cards which impose the fee. I just hope they'll be upfront and tell people about any such changes if/when they occur.

-- Eric

I am upset about this as well. I think I will be calling Capital One about raising our limit. We have used this one just as an emergency back-up and like the other poster, we got B of A through MBNA. We make other purchases out of the country and they will now be subject to this fee. It is the bank's way of getting back money to pay back those TARP funds, in my opinion. I guess I should get with it and pursue another avenue for a credit card. This is not a good thing.

My current strategy to avoid CC fees is to use my HSBC debit card at HSBC ATMs to get my own money in the foreign currencey and pay cash for most purchases.

HSBC ATMs are in many countries but not all. In London there was no fee or percentage - in Athens there was a $1 fee regardless of amount withdrawn but no percentage.

In a recent theater week in London I withdrew cash as needed so I never had to carry too much money at one time.

I presume this would work with other banks with overseas ATMs

I just got a credit card solicitation today from Continental Airlines who uses JPMorgan Chase and they also are charging this fee. Here's the quote: "International Transaction fee
3% of the U.S. dollar amount of the transaction, whether originally made in U.S. dollars or converted from a foreign currency."

I can understand charging a fee on currency conversion, but I'm having a hard time understanding why they have to charge an international transaction fee on purchases made in the United States in US dollars just because they are processed by a foreign bank.

Perhaps it's time to switch to Capital One if they are going to continue to not charge any international transaction fees. Tom.

So if there is no annual fee for the top of the line platinum card, I guess it's a no brainer to get one of these for overseas purchases??

In any case, I had fun designing my card with a tribble on it :)