Credit Card foreign transaction fee

[parrot]

I just received this notice from my credit union concerning its credit cards:
Foreign Transaction Fee. Effective November 30, 2009, Pentagon Federal is increasing the foreign transaction fee to 2% of the U.S. dollar amount of the transaction whether originally made in U.S. dollars or converted from a foreign currency.

There is no mention of the fee increasing on the standard ATM cards (although I've got a query pending with the credit union about this).

Thought I'd give everyone a heads up. If Pentagon is increasing their rates, others are probably as well.

[daxbr]

I just received this notice from my credit union concerning its credit cards:
Foreign Transaction Fee. Effective November 30, 2009, Pentagon Federal is increasing the foreign transaction fee to 2% of the U.S. dollar amount of the transaction whether originally made in U.S. dollars or converted from a foreign currency.

There is no mention of the fee increasing on the standard ATM cards (although I've got a query pending with the credit union about this).

Thought I'd give everyone a heads up. If Pentagon is increasing their rates, others are probably as well.

Yes, very unfortunate as Penfed Rewards visa was the best to use overseas.

So far there was no 2% transaction fee but only 1% visa fee. Penfed was charging it and disclosing just below each transaction but at the end of each month credited 1% back into account as part of Rewards program.

[JimboPSM]

I have been warning for quite some time that banks will use every opportunity to increase charges to pay for their incompetence in other areas (and also their bonuses).

Unfortunately foreign currency is one of the easier areas to get away with it; it is a relatively small part of many banks day to day operations and is an area poorly understood by most of the customers that use it.

As with most areas in banking, increases in automation have increased profitability considerably over the last few decades – instead of these gains being shared between the customer and the bank (and its shareholders) they have almost wholly been retained by the banks. Within most countries banks have virtually eliminated any real competition and for some time have effectively been acting as cartels.

Although at first sight the increases in fees and charges often seem to be small, in proportion to the costs of providing the service they are absolutely massive.

In the case of the OP, the fee is being passed off as just going from 1% to 2%, whereas in reality the bank has increased its fee by a whopping 100% - in a truly capitalist society how many other businesses could ever get away with increases like that?.

[jorg]

So far there was no 2% transaction fee but only 1% visa fee.

What's the difference between these two?

Now I don't have that credit card, but I'm curious. Are you saying you have to pay 2% on every transaction, or only when you get money from the ATM? My visa card charges me 1% (with a maximum of € 1,50) when I get money from the ATM, but doesn't charge anything if I just use the card to pay in a store, hotel or restaurant.

[daxbr]

We are discussing Pentagon Federal Credit Union Visa Rewards card, not an ATM card. Current foreign purchase fees are 1% Visa fee and 2% Penfed foreign transaction fee.