More Ways To Avoid The Foreign Currency Transaction Fee

I found another card that claims to not charge any foreign currency transaction fees.

The card is the E*Trade Rewards Platinum Visa® Card but honestly the best feature it has looks to be the fact that it does not charge you a fee when you use the card outside the U.S.

Their interest rates look reasonable (although I counted 5 different possible interest rates they could charge you), there's no annual fee, and they have some sort of rewards program that lets you trade points for free brokerage trades using E*Trade, or travel rewards.

Yawn.

Except for the fact that they do not charge a foreign currency fee, I see very little other benefits.

But I would like to support them because I still believe that more cards should drop this fee.

The Charles Schwab Visa – Second Complaint

You get the bad with the good.

So far my only complaint about the Charles Schwab Visa was that it is not compatible with MS Money. (They say they are, but they’re really not.) I still really like this card because they don't charge you that foreign currency transaction fee that almost all other banks do.

Now I have a second complaint. I looked ahead and it looks like my first statement will cycle on March 5th. That gives me a payment due-date of 30 March. Since I get paid on the 31st of the month, I called Charles Schwab to see if they could move back my payment due date by one day.
I’ve done something similar to this before with other banks (USAA moved the due date by 15 days once) so I know it’s possible.

Chuck Schwab said “Sure – but it will take 2-3 billing cycles to take effect”.

I asked: “So I have to pay this bill on the 30th of March and I can’t pay it on the 31st?”

“That’s Right” she said.

“But in two months I can pay it on the 31st? Just not this month?”

“That’s correct.”

It’s not a big deal, and truth-be-told it’s almost not worth mentioning – other than in my mind it knocks their previously impeccable customer service rating down a notch. How hard would it have been to add one day to this one cycle? Even two cycles - I don't see the big deal.

But they are still better than Capital One.

UPDATE - 18 March:

Two weeks after I first asked them to move the due date - they did it. My new statement date is two weeks later (I was really only looking for two days) and it was effective my very first statement.

Why the lady gave me a hard time on the phone I'm not sure... Maybe she was managing expectations.

Anyway - I can take this off the complaint list. So far - only real complaint is Charles Schwab is not really compatible with MS Money's software. Which is just killing me.

Further Support for the Schwab Visa

Recently we were at Real buying phone cards (because when you purchase from Real, you get extra minutes for free with the Play cell phone service) and I decide to try out the exchange rates for my new Charles Schwab Visa. So I bought two cards at the same time - one with my trusty USAA MasterCard and one with my new Charles Schwab Visa.

This is what I found (I know it’s not scientific):

-The Exchange rate that I got for cash from the embassy (for government employees only) was 3.642.

-For the 50zl charge, USAA charged me $13.57 ($13.44 for the purchase plus a foreign currency fee of $0.13). Their ROE was 3.720 (plus $.13)

-For the 50zl charge, Schwab charged me $13.42 (vice $13.44 from USAA). Their ROE was 3.725 but with no extra fee.

For this transaction alone: USAA at the end of the year will give me 13 cents back – Schwab at the end of the month will give me 27 cents back.

Total end cost of the transaction shows USAA will give me that 50zl phone card for $13.44 whereas Schwab would give it to me for $13.15.

If I didn't lose you with the incredibly boring numbers - The Charles Schwab Visa is blowing away its closest competitor, IMHO. Their biggest flaw still is that they don't allow you to sync with MS Money... But if I'm paying less everytime I use the card- I guess I can take the trade-off.

Yet Again, Not Happy With Captial One

Several months ago my wife and I quit going to Oh-Sushi, our then-favorite restaurant for Sushi. The reason we quit going wasn’t the food, but the fact that every time I used my Capital One card, I was being charged in U.S. Dollars (at a really bad exchange rate) rather than being charged in Polish Zloty.

They claimed that the machine processed the transaction automatically and there was nothing they could do about it. While I would have liked to believe them, I never had a problem before – so I wrote about it and we just stopped going to that restaurant. We found another Sushi place that took my Capital One card and always charged me in PLN rather than USD.

I was ready to write it off as an uncooperative merchant, but recently I went with a big group of people to another restaurant in Wilanow called Castello’s. I paid for the whole bill with my Capital One card and imagine my shock when I went to sign for eh card and noticed that they had already converted the Exchange rate for me into USD – at a really terrible rate (3.25 vs. the rate of the day which was closer to 3.75).

I was a bit livid and tore into the guy for charging me in USD. He insisted (and I believe him) that the machine automatically calculated the amount, probably based on the fact it was a US Dollar-based credit card.

I started to see a pattern. So I went back to Castello's this past weekend and paid with my shiny new Charles Schwab card. There was no problem paying in Polish Zloty and I got the fair exchange rate and presumably I will get back the full 2% back in cash rebates.

I cannot find anything about this online, but it looks to me that Capital One and Polcard have an agreement that in some establishments (possibly limited to certain restaurants), the credit card will be charged in the base currency of card. Polcard makes a substantial profit from the crappy exchange rate, and I assume that somehow there is an incentive for Capital One because they do not charge a foreign currency transaction fee.

This is yet another reason to ditch my Capital One card. I unfairly blamed the restaurants, but now I see this is definitely a problem with the credit card company – specifically Capital One.

My advice - If you do use a Capital One card overseas - carefully monitor how you are being charged. If ever given the option select the local currency, and if not given the option - use another credit card.

My Take on the Charles Schwab Visa

Not too long ago I wrote about the new (at least new for me) Charles Schwab Bank Visa Card. It's two biggest advantages are that it does not charge that evil foreign currency transaction fee, and it will pay you 2% back on all purchases.

Right after I wrote about it - I applied for one. I couldn't resist.

Here's what I found:

-I applied for the card over the internet, but it told me that they would have to review my application and get back to me. I thought that was a nice way of saying that I had been declined, but a couple of weeks later I did get a shiny new card in the mail.

-8 months ago Capital One issued me a card with a ridiculously low credit limit. I feared that this was a reflection on my credit rating. It turns out Capital One just sucks - Charles Schwab gave me a credit limit 7 1/2 times that of what Capital One gave me no questions asked.

-When I got the card, I made multiple calls and the people on the other end were sooo friendly! They answered every question they could to my utmost satisfaction. One lady even recognized that I had called earlier. That was actually a nice touch.

-The interest rate is pretty high compared to other cards that I have, but I don't plan to carry a balance. They don't have any annual fees, and did I mention that they don't charge the foreign currency transaction fee?!?

My only disappointment came the first night when I was trying to sync with MS Money. When I was checking out the card I read on their website: "Users of Intuit's Quicken or Microsoft's Money can quickly download their Schwab Bank account information to their computers for more convenient management of their finances."

When I called and asked why I couldn't get my software to sync, the dude on the other end told me that I could only download once a month after the statement cycled through.

You have got to be kidding me...

This little detail is the only problem, that I have with the bank. This is extraordinarily painful to those of us that use MS Money as a part of our financial management - especially those of us who use different currencies where we don't know the exact amount charged until after it posts to our accounts.

The other side of the coin to this is that you have to sign up for a Charles Schwab Brokerage account to hold the 2% rebate. This process was a tad laborious and a just little bit painful. The folks on the brokerage side are not as friendly as the banking folks and going through the process is just too time consuming. Luckily, the brokerage side of the house is compatible with MS Money.

So aside from the really disappointing news that I have to enter my own transactions, this is going to be our card of choice. 2% back and no transaction fee is just awesome, and the fact that the money is returned monthly is just gravy. So far it looks like their exchange rate is at least as fair (if not slightly more-so) than other cards - so for now - this is the only one I use.

Still Looking for the Perfect Card

So at the bar the other night I met a very nice lady who told me about her Bank of America, Military Bank credit card that did not charge any foreign currency transaction fees.

Too good to be true I thought.

So I went to BOA's web site, and they did have a web site for military banking - but when I clicked on the terms and conditions of the credit card, their web site was non-operational and said I should call their 800-number. (The fact that their web sit was not working should have probably alerted me this was not going to easy).

So I called. The woman said "I have a great offer for you" and proceeded to offer me a card with 3% foreign currency transaction fee.

I thanked her and tried to hang up, but then she persisted and asked specifically what I was looking for. When I said I wanted a card that did not charge a foreign currency fee, she put me on hold for a couple of minutes more.

When she came back she told me "I have another great offer for you". Apparently Bank of America is full of great offers.

This offer I thought was very interesting - She offered me a "Bank Of America Military Preferred American Express" and insisted this card only carries a 1% foreign currency transaction fee.

There is no cash-back program with this card (only points that I'd never use) but the interesting part was this is the only American Express card I've ever heard of that charges only 1% for purchases in a different currency. Usually it's between 2.7 and 3% depending on the issuing bank.

I find this encouraging, because frankly I think this fee should be abolished. Visa, MasterCard and American Express already make a decent profit on every transaction charged to the vendor - there is no reason to bill the card member / traveler again for the same purchase.

There are banks that don't charge these fees. I'd just really like to see more of them.

Lucky Ducky

I have been assigned yet another label in my life - This time I'm not sure if it's flattering or not.

Apparently I'm a Lucky Ducky. The term in the financial world apparently refers to people who do have income, but are able to take advantage of incentives and tax credits in order to have zero taxable income; therefore, actually end up making money off of the income tax system.

Reading through a few sites, I see that many see this as an unfair situation. I happen to know quite a few young military families that have directly benefited from the tax cuts responsible for producing so many Lucky Duckies...

So say what you want - it's just water off a duck's back.