Foreign Transaction Fee For US Dollar Transactions!
by Mr Credit CardI just received a letter from FIA (who process my Merrill Lynch Card – now Bank of America I guess). I’ll reprint this letter in full here :
CHANGES TO YOUR CREDIT CARD AGREEMENT
Please read this document carefully and keep it with your Credit Card Agreement. Except as amended below, the terms of your Credit Card Agreement remains in effect. If there is a conflict, the terms in this Amendment will prevail.
FOREIGN TRANSACTION FEE
What is happening:
We are expanding the definition of “Foreign Transactions” to include transactions in US dollars if they are made or processed outside of the United States. As a result, these transactions (posting on or after June 1, 2009) will be subject to the Foreign Transaction Fee, currently 2% of the US Dollar amount of each foreign transaction. This fee is in addition to any other applicable fee.
Amendment to Your Credit Card Agreement:
Effective on June 1, 2009, we are replacing the definition of “Foreign Transactions” in the section of your Agreement titled Words Used Often in this Agreement with with the following:
My two cents – Great. While taxpayers subsidize BOA, they continue to reduce credit lines even on customers who pay on time! And now, they will consider a US dollar by a foreign merchant a foreign transaction fee. That means, for example, if your web host is in Canada and you auto bill it to your credit card, you will be hit by a 2% fee!
Now, my Merrill Lynch card is hardly used at all. So this will not affect me. But it sure is frustrating that credit card issuers who receive TARP money continue to find ways to squeeze the very consumers who are going to foot the TARP bill.
April 17th, 2009 at 10:31
You can argue the merits of fees such as this but a bank having received federal bailout funds shouldn’t be a factor. If you do take government subsidies into consideration, you’d have a hard time justifying any fee/interest/money making that a bank charges and these banks would find themselves relying on public funds forever.