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Discussion in 'General Discussion | Credit Cards' started by tulane09, Feb 24, 2013.
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Do CC's charge foreign transaction fees in Puerto Rico?
Depends on where you are based. If your credit card is based in the US, the answer should be no. (that doesn't mean that some CC companies might not try to charge the foreign Transaction Fees, though) If you are in Canada, UK etc. probably.
But with the handle of Tulane 09, you are probably in the US. (BTW I have never been charged a foreign transaction fee on Credit Cards used in Puerto Rico.
As they use the US Dollar, probably not if you're using a US card. If a non-US bank, it'd be based on your bank's terms.
I am indeed US based. Thanks.
Charging in US dollars is not guarantee that credit cards will not charge the foreign transaction fee. I know some banks at least charge foreign transaction fee in Ecuador.
I would like to use an extrapoints Barclays card as I'm trying to meet its minimum spend. I have several no foreign fee cards I just would rather not use them.
You shouldn't have to worry about a forex fee in SJU (w/a US-based cc), but the ATM fees are different & subject to your bank's policy on those fees.
If you are truly abroad (I don't think Puerto Rico counts), you may be offered by hotels or other merchants to be charged in USD. Don't accept that. Your bank will still charge you for a "foreign" transaction. And you likely get a bad exchange rate to begin with.
Many CCs changed the terms from "foreign currency" to "foreign initiated transaction" or something of that nature. So you get hit even if you're letting the merchant do a conversion for you. That process, usually known as Dynamic Currency Conversion, is evil and should be avoided pretty much all the time.
I am not even sure why Dynamic Current Conversion exists! It is borderline fraud!
No. Puerto Rico is the US. Therefore no foreign transaction fee may be charged. Not there, not Guam, not any other US territory.
These are different things. A "foreign transaction fee" can be applied by a card issuer on any transaction taht takes place outside the currency area in which the card was issued.
"Dynamic Currency Conversion"(DCC) is an entirely different beast, with zero connection to the Foreign Transaction Fee(FTC). DCC is an option offered by a merchant to display the charges in the home currency of the card issuance. That is, your charge in China can be displayed in US$ if you accept. DCC typically costs 3-5% or more and has precisely zero value. You actual change from the card issuer will still show a Foreign transaction Fee, if the issuer charges one, and the actual charge will depend on the issuer/association procedures, rather than the DCC amount. Thus, you pay at least twice what you should. This scan continues to exist because few comsumers understand it and because merchants make a ton. DCC exists globally but some merchants are more frequent abusers than others and some countries are more frequent abusers than others. Marriott is prone to do this almost everywhere and desk clerks are often give instructions that are misleading, if not absolutely false. In China the practice is ubiquitous. HSBC in China even does it with ATMs but will refund the fee for customers. Even St regis in China do this. protesting usually can get it rescinded, but you may ned to argue vehemently.
So DCC= scam and you can reject it
FTC= done by your card issuer and applies regardless of the currency if the transaction is initiated outside the currency area of your card.
Actual FX rates are another thing entirely and vary by MasterCard, Visa, American Express and by some issuers too. Disclosures are often misleading. There is effectively no way to know the actual FX margins. As a general rule if there is no DCC or FTC credit cards and debit cards offer rates that are better than you'll get in any other legal source.
There are caveats in all this. The subject is arcane. It is fairly difficult to find all the disclosures and many of them are quite vague anyway.
For reference a European credit card company that is my client makes 17% of total net profits from foreign currency transactions. Almost all their issued cards nominally have no FTC's.
But the FTC, as you've named them, are not defined necessarily by the currency the transaction is billed in. That's the point I was raising.
Love this question, because it demonstrates how much the typical American knows about geography and history.
Yes, the US Dollar is the official and only currency. Puerto Rico is part of the U.S. Commonwealth.
While I can partially agree with the statement posted above, it's important to clarify that Puerto Rico is in a bit of a limbo. It represents itself as a country in sports and world events and it is self governed. There is a big push-pull in a divide of cultures.
Puerto Ricans are NOT eligible to vote in U.S. presidential elections. As of June 4th 1951 it has its own Constitution. It's NOT a U.S. state (motions and elections are always on for that to happen, but Congress has yet to act on it - this has PR divided in a bitter internal dispute). And it has NO voting representation in Congress.
If anybody has been there, they can tell you that the banks are more like Caribbean banks both in operation and looks.
PR itself feels like a Latin Country, with rules, culture and law that feel more like the Caribbean neighbors it has.
So, yes it can be confusing. The books haven't been finalized for Puerto Rico, lots of changes waiting to happen.
True, but frequently the merchant doesn't mention DCC is being offered.
In some cases, there's a small print notification on the charge slip or the hotel bill saying that you agree the amount will be converted into dollars. If the customer is in a hurry (like checking out of a hotel waiting to catch a cab), (s)he may not take the time to read the charge slip/invoice closely and may miss it.
Some car rental companies (Avis for one at BRU) hide it in the mouseprint "contract" you sign so when you turn the car back in you've already committed to DCC.
Mostly I concur, but... Puerto Ricans are 100% US Citizens and can vote in Presidential elections if they reside in the States. They only cannot do so if they reside in Puerto Rico. I suspect only Puerto Ricans, Floridians and New Yorkers know that particular bit of trivia
Those are absolutely factual comments. Most of the time the clerk processing a payment will not even know about it. Often hotels don't know either. I have had long discussions about that in China at St Regis hotels, in Italy at a few hotels. I have downloaded the MC and V DCC rules just to document the case.
There is one certain way to know if you're being charged DCC: If your home currency appears as the charge rather than the local currency you're bing charged DCC. No exceptions at all! Insist on a local currency charge if the price of the goods is priced in local currency.
There are two problems with the previous sentence. 1) many hotel and car rental rates are shown for convenience in your home currency when you book. Firms can and do use that as an opportunity to rip you off.
2) Duty Free shops often use either US$ or Euro as their base currency. You'll usually still be charged a foreign transaction fee but rarely DCC. 'rarely' means it might happen somewhere but I have not heard of it.
Finally, despite the legal obligation to get customer consent for DCC many places do not actually do that, like the Avis BRU mouse print.
More nefariously, HSBC ATM's in China, for example, all do disclose DCC, but you can only make a withdrawal if you agree. If you're HSBC Premier or higher, your T's and C's preclude HSBC imposed foreign transaction fees so they'll refund them without question at your home branch, but it is a hassle.
Is it correct that American Express cards do not allow/support DCC?
American Express cards do not currently have DCC applied. However, in many countries some merchants will increase charges for using American Express because the merchant discount rate (what the merchant pays to accept a card) is usually higher. Using American Express with hotels and car rentals will avoid DCC.