Chuck Strikes Again!

One of the things I have learned on Flyertalk that has benefited me the most in real cash is hunting for a bank with no ATM fees and credit card with no Forex (foreign exchange) fees. At the time the best card was the Charles Schwab 2% cash back, no forex visa signature administered by FIA (note, rumors state this offer no longer exists), but FIA wasn’t showing me love so I had to settle for a Charles Schwab visa debit card on the High Yield Investor Checking account (free). This card also has no forex fees and they reimburse ATM fees (at the end of the month) charged by other banks.

Today I was booking tickets for a conference in Australia. The tickets cost AUD535.30. The conference uses PayPal to as their payment processor. PayPal wanted me to post the payment in USD and said it would be $501.xx. A quick check over on http://www.oanda.com showed me that the current interbank was closer to US$489.60. PayPal did also have the option to run the charge in local currency which they warn will mean that your credit card will add the forex fee. I did this and Chuck debited $491.39. THIS IS ALWAYS THE OPTION YOU SHOULD TAKE UNLESS YOU ARE FUNDING FROM CASH! Why? Well because many credit cards are savvy to this method and add forex fees to transactions processed from foreign countries regardless of the currency of the transaction! This means that PayPal gets their cut of around 3%, then your credit card gets their cut which can range from 0% (capital one) to I think close to 4% for some cards. I think many of them are around 3%, but always check this wiki. The kicker is that Citi doesn’t add these fees until the end of the cycle which always drove me crazy when I used those cards and needed to prove how much I was charged for business expense reimbursement.

Just that 1 purchase saved me $10. Plus my ATM fees are reimbursed, plus the account gets 0.75%APR.

If you do any international travel it is worthwhile to investigate how to minimize forex fees.