Apr 10, 2010
CURRENCY CONVERSION FEES
Banks, credit card firms should tell all
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I REFER to the reply by United Overseas Bank ('No hidden fee for using card abroad: UOB', March 7) to Ms Lim Mui Cheng's letter ('Using credit card abroad? Beware of hidden fee', Feb 21).
The bank says Ms Lim is wrong and that it does not hide credit card charges. It stated: 'Disclosure of foreign transaction charges can be found at the back of our credit card statement or via our website.'
I checked and, yes, it is there. The bank says it charges 'an administrative fee up to 1.5 per cent of the transaction amount'.
What the bank does not say is that all credit card bills show overseas purchases in the foreign currency and Singapore dollars. It includes a currency conversion charge that cannot be broken down.
It remains hidden, just as Ms Lim said.
Some of the hidden fees come from card companies. Visa's website mentions a 1 per cent fee, and then says there may be more charges. MasterCard cites a 0.8 per cent fee, but says there are additional costs it does not disclose 'due to our business agreements with our customers (banks)'.
Card companies and banks blame one another for the non-disclosure, but it is the banks that prepare credit card bills. Only they know the hidden fees cardholders pay. Disclosure - if it ever happens - will have to come from the banks.
An almost funny example of what is wrong is 'double billing'. UOB's cardholder agreement says: 'Card transactions in foreign currencies other than US dollars will be converted into US dollars before being converted into your card billing currency.'
It means if you make a purchase in Malaysian ringgit, it will be converted to US dollars, and then to Singapore dollars. I asked UOB why it did not charge the cardholder once instead of twice.
It said it would take a 'rain check' on the question.
The biggest problem is that even if you discover that double billing exists, it does not help. You will still not know the currency conversion cost in your bill.
As explained, the banks embed it in the price of the merchandise you buy overseas, and it cannot be broken down.
This has been going on for decades. Now would be a good time for banks to disclose the hidden charges in our credit card bills.
It is easy; just one number. Come on banks, you can do it.
Larry Haverkamp
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CURRENCY CONVERSION FEES
Banks, credit card firms should tell all
<!-- by line --><!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
I REFER to the reply by United Overseas Bank ('No hidden fee for using card abroad: UOB', March 7) to Ms Lim Mui Cheng's letter ('Using credit card abroad? Beware of hidden fee', Feb 21).
The bank says Ms Lim is wrong and that it does not hide credit card charges. It stated: 'Disclosure of foreign transaction charges can be found at the back of our credit card statement or via our website.'
I checked and, yes, it is there. The bank says it charges 'an administrative fee up to 1.5 per cent of the transaction amount'.
What the bank does not say is that all credit card bills show overseas purchases in the foreign currency and Singapore dollars. It includes a currency conversion charge that cannot be broken down.
It remains hidden, just as Ms Lim said.
Some of the hidden fees come from card companies. Visa's website mentions a 1 per cent fee, and then says there may be more charges. MasterCard cites a 0.8 per cent fee, but says there are additional costs it does not disclose 'due to our business agreements with our customers (banks)'.
Card companies and banks blame one another for the non-disclosure, but it is the banks that prepare credit card bills. Only they know the hidden fees cardholders pay. Disclosure - if it ever happens - will have to come from the banks.
An almost funny example of what is wrong is 'double billing'. UOB's cardholder agreement says: 'Card transactions in foreign currencies other than US dollars will be converted into US dollars before being converted into your card billing currency.'
It means if you make a purchase in Malaysian ringgit, it will be converted to US dollars, and then to Singapore dollars. I asked UOB why it did not charge the cardholder once instead of twice.
It said it would take a 'rain check' on the question.
The biggest problem is that even if you discover that double billing exists, it does not help. You will still not know the currency conversion cost in your bill.
As explained, the banks embed it in the price of the merchandise you buy overseas, and it cannot be broken down.
This has been going on for decades. Now would be a good time for banks to disclose the hidden charges in our credit card bills.
It is easy; just one number. Come on banks, you can do it.
Larry Haverkamp
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