Credit-Card Surcharges
Consumer Alert:
Credit-Card Surcharges
If you travel with a Visa, MasterCard, American Express, or other credit card, watch out when charging purchases overseas.
The reason: Most U.S. and Canadian credit-card companies are now tacking an extra 2% to 5% fee on international transactions.
This is not a currency-exchange commission, because the Visa/MasterCard clearinghouse has already taken its commission (currently 1%) when converting your transaction from foreign currency into U.S. or Canadian dollars. Instead, it's just another way for the credit-card issuer to squeeze extra profits out of customers who may not be aware of the added fees.
More recently, the Washington Post reported that Providian National Bank is adding 4% to purchases in currencies other than U.S. dollars. Chase has announced a 2% surcharge. American Express, which isn't affiliated with Visa or MasterCard, has doubled its charge for U.S. cardholders from 1% to 2%.
How to avoid surcharges
�Don't use your Visa or MasterCard overseas until you've questioned your card's issuer about fees added to foreign-currency transactions. (Check before each trip, because policies may change on short notice.)
�If your credit-card company is one of the offenders, cancel your account--and tell them why you're switching to a different MasterCard or Visa issuer.
�If you have an American Express account, use your card only when absolutely necessary.
Note:
�In addition to surcharges on credit-card transactions, some banks are now charging hidden fees of several percentage points on foreign-currency ATM transactions. So, if you thought your ATM card was a safe haven from credit-card surcharges, think again-- before withdrawing cash abroad.
�Two major U.S. credit-card companies, Capital One and MBNA, weren't charging "conversion fees" at last report. (But check before using their cards, since policies can change at any time.) USAA is another option for U.S. military or National Guard personnel, retirees, and dependents.
All the more reason for the government and banks to step up and allow vendors to charge cards in US dollars. It can be done but you really need some clout for it to happen.
Things like this hurt tourism, time for Belize to be proactive on this one.
>> Two major U.S. credit-card companies, Capital One and MBNA, weren't charging "conversion fees" at last report.
I don't believe their info is current; Capital One charged me about 1.9% on my CC charges when I was in San Pedro in July, & I am a platinum card holder w/ them. Haven't had an MBNA card in years, so I have no idea 1st hand experience there...
My husband used his Bank One card in Costa Rica in August and had all kinds of fees on it. We were both astounded.
Use fees, currency exchange fees, and two for a cash advance!!! It was ridiculous. Time to look for another card! Thanks for the info on Capital One. We just got smoozed by them in the mail. I'll look closer. Thanks.
Don't misunderstand me Debbie, I am happy with my Capital One Visa. If I could find a CC w/ none of these int'l. charges, I'd probably sign on. FWIW, I found out about the 1.9% charge prior to my trip, when I laid down the deposit for my room. I decided after some research it was on the low end of the fee range for the cards I have, so that's the one I used. As these CC co's go, Capital One is pretty good. (& considering my overall low opinion of CC co's.)
Far as I know, all cards charge for cash advances, though the fees vary considerably. A USE FEE? Sheesh ... sounds like the car dealership 'transaction fee': they charge $250 - $400 for the privelege of letting you buy the car from them... eck
Do you have the link? I would like to pass this info on to some friends.
Thanks
CASH - don't leave home without it
Time for US Dollarisation in Belize. The idea of Belize (pop. under 300,000) having its own currency would make a little - but still not much - sense if it was "floated" on the international currency market. Because it is fixed at 2:1 there is absolutely no reason to have a different currency. It is daft. The Belize dollar is virtually unexchangeable outside of Belize even though theoretically it is worth exactly 50US cents.
Belizeans wanting to get US dollars for overseas purchases have to pay as much as $2.25BZE-$1.00US with black market moneychangers....the Central Bank of Belize makes it almost impossible for Belizeans to get US dollars legally.
Time for Belize to use the US buck. Now that the new peach coloured $20.00US bill is out it has a tropical look! I wonder if that was a hint from Uncle Sam?
Here is an interesting perspective on the Belize dollar //www.ambergriscaye.com/BzLibrary/trust287.html
It would be VERY hard for the Belize government to switch to any currency that is traded. That would result in a hugh devaluation of the Belize dollar. The government now pays all of it's "local" bills, ie. salaries for goverment workers and purchases in Belize dollars. They need all of the foreign currency they can get their hands on to service the national debt. That is why US dollars are so hard to come by for the private sector. It would be much better for Belize in the long run to switch. That would help to attract foreign investment, but would be a very hard "fiscal pill" for the government to swallow. It is much easier for the government to print Belize (funny money) dollars than to get "real" money. I am just surprised that the government has not required all those entering the country to change their foreign money into "funny money" thus giving the government access to all that foreign currency. I hope the government doesn't read this board and get any ideas. I have always said the only thing Belize money is good for is buying rice and beans and a joint.
I'm not an economist, but on the other hand I don't know that I agree with bywarren on why Belize doesn't dollarize.
Belize effectively has a dollarized economy as the Belize dollar has been pegged to the U.S. dollar for, what, 25 years.
Inflation is a result of too many local dollars chasing goods, but Belize has had low inflation for many years. Ergo, I don't think Belize has been creating money. At least not in any significant amounts.
The World Bank keeps a pretty close eye on Belize.
What the Belize government has done instead is to borrow in the international marketplace, and that's why its external debt is so large (in relative terms.)
--Lan Sluder
Lan, the problem the Belize government has with changing to the US dollar or any other currency that is traded on the world market is that it would have to replace it's currency with that which it is changing to. It would have to obtain enough of the new currency to exchange the Belize dollar that people have for the new currecny. It is "pegged" to US dollar at 2 to 1 only by Belize and in effect you cannot go to the bank and get $1US for $2BZ. That is why the black market exists and in reality the Belize dollar is worth alot less than 50cents US. It would be VERY expensive for the Belize government to acquire the new currency. They just do not have that financial ability and as long as they can continue to avoid changing, they can keep using their Belize money. They much prefer to pay Belizeans with money they say, and only they say, is worth $2BZ to $1US. That is only a reality if someone else will give you $1US for $2BZ. I have yet to find that someone.
PS: as to inflation. The only way Belize is able to falsely represent that it has low or no inflation is because it unilaterally "pegs" the exchange at 2 to 1. The only way to accuratly judge that would be if the Belize dollar was traded on the international market and if that were done it would not trade at 2 to 1 and you would find that the Belize dollar is greatly inflated. The article I refered to that suggests the Belize dollar is worth 3cents US is only one. There are many others that use different formulas to come up with a valuation and they all come up with the Belize dollar being worth A LOT less than 50cents US. None are even close to that value.
PPS: Lan, whenever you come to Belize please look me up and I will gladly exchange your US for BZ at $2BZ for $1US. After all, that is what it's worth, right?
So, bywarren, you're saying that the IMF and World Bank have been totally hoodwinked by Belize?
I agree that if the Belize dollar were allowed to float its value would decline in terms of the U.S. dollar. And I agree that it has no real exchange value outside Belize. And that, at times, the demand for dollars is such in Belize that you can get more than 2 BZ to 1 US.
But those facts in themselves don't mean that the Belize government is printing funny money. Any more than it means that China is removing yuan from circulation (most economists think the yuan is pegged at an artificially low rate to the U.S. dollar to make Chinese exports more competitive.)
A lot of it has to do with the fact that the entire Belize economy, the whole economy, is only about the size of a small town of 30,000 people in the U.S. (on a GDP-equivalent basis). The Belize economy is so small no one in his/her right mind would use the Belize dollar as a store of value and hence the Belize dollar isn't actively traded on world markets. The vast majority of world currencies are actually like that.
Actually, for the last couple of years the Wall Street Journal's weekly report on the value of the U.S. dollar uses not 2 to 1 but less than that, 1.97 to 1, for the Belize dollar.
But I'm out of my depth here -- any economists out there?
--Lan Sluder
HEY bywarren ! Man when you pop up, you pop way up ! Good to see you are still porking. Semper Fi Pal !
OK, Lan: don't get me wrong here. I refer to Belize money as "funny money" mostly because it is only good in Belize. The real delema for Belize in going to another currency that I am trying to describe is how they would acquire the new currency. What would that cost? Can Belize afford the cost? How would they pay for it? Those are the questions that must be answered before the change can happen. I stated that it would be good for Belize to make the change in the long run. I just do not see how the government could do it without bankrupting the country. Although, many feel the country is already bankrupt.
I will go way out on the limb and make my predicition. When Belize finally defaults and admits it is unable to pay it's foreign debt, the US and Britain will bail her out. The US because Belize is too important strategically and Britain because they are ashamed of the way they left the country (that comment is for Peter's benefit). In doing so, they will infuse the money to run the country but will demand that the country be run without the corruption and waste that is present now. Belize will then begin to really prosper.
Semper Fi, Immising. I have a few days at leasure before pheasant season starts. Just could not stay silent. You people have me addicted.
We need Peter's comments, it could get even more interesting. Somebody go and get him.....
When the US government "bails out" a country that would otherwise default on its loans, it is not bailing out the people of that country. Rather it is bailing out international banks, and using money extorted from the US tax payer to do it.
The US should not "bail out" anybody. Let Belize default and let the banks take their medicine. They chose to make loan after loan after loan knowing that the corrupt pols will never pay it back. Let them take the punishment rather than continuing to gouge the US tax payer.
Tax payers are abused enough, thank you!
That is a pretty callous approach Susangg, even for a misguided attorney. The discussion is framed around Belize going to the US dollar. If Belize is unable to exchange the current Belize currency for US dollars at 2 to 1, it will be the Belize people holding Belize dollars that get hurt. If Belize defaults on it's loans (you are probably right as to when not if) then yes, the banks will take a loss. The problem with that is banks get their money from people depositing it in them. Ultimately it is the "tax payer" that gets hurt. I think it was set up that way by attorneys.
Another interesting question. At present Belize is printing new currency to replace the old with the reason given that it will be harder to counterfeit. Do we think, and how will we know, the Belize government will "retire" one old bill for every new bill put into circulation? Hmmm, a tempting opportunity for corrupt politicians.
A final question. Maybe one you are actually qualified to help answer, Susangg.
Why is it that most of these corrupt politicians are attorneys?
:rolleyes:
WHY DONT THE USA JUST GET DI HELL OUTTAH BZ...
[dont get mi started]
B A M !!! Take that, Susan !
I see no economic reason Belize can't accept the US dollar as its currency. El Salvador (pop. 6 million) dollarized during 2000-2001 and it worked. Apart from the expected confusion (mainly amongst poor people who couldn't read or write) during the transition period - Colones were phased out gradually - the country and its people benefited enormously from the change. Dollarization helped El Salvador recover quickly from the devastating earthquakes of January and February 2001.....there was no "local" currency to collapse.
Equador actually dollarized before El Salvador: http://ask.elibrary.com/login.asp?c=&host=ask%2Eelibrary%2Ecom&script=%2Fgetdoc%2Easp&query=pubname%3DThe%5FEconomist%26puburl%3D0%26querydocid%3D50073417%40urn%3Abigchalk%3AUS%3BL ib%26dtype%3D0%7E0%26dinst%3D0%26author%3D%26title%3DThe%2BAmericas%253A%2BMixed%2Bblessings%253B%2BEcuador%2527s%2Beconomy%2B%2B%26date%3D01%252D26%252D2002%26query%3DEcuador%2Bec onomy%26refid%3Dabacci%26maxdoc%3D10%26idx%3D0&title=The+Americas%3A+Mixed+blessings%3B+Ecuador%27s+economy++&pubname=The%5FEconomist&author=&date=01%2D26%2D2002&ctrlInfo=&refid=ab acci ..overall, a good thing it would seem.
Belize CAN easily afford to dollarize..if El Salvdor and Equador could do it - both of which had weaker economies per capita than Belize - then it would not be a great problem for Belize. The only thing stopping it is the fact that a few very wealthy people (politicians included) benefit from the artificially imposed black market exchange rates. They make fortunes from Belizean businesses and people desperate to change their Belize dollars to US dollars so they can pay for imported goods.
Firstly -great to see Susan back-do not stay away for so long again.
I would believe that the U.S.would give Belize up to 50 million dollars to dollarize as a one time payment-they certainly gave ElSalvador far more.
Why you ask? The answer is very simple the poor people keep their money under the bed and huge amounts just stay in the country never to be repatriated which allows the U.S. govt to keep an artifically high dollar rate on the world economy-if you look at Russia/Former Soviet Republics/China -countries which have a non-tradeable currency the only monies everyone wants is U.S. dollars.It is estimated there are trillions of dollars that will bnever get back to the treasury which is why the dollar was taken off the gold standard in the sixties.The U.S. have no idea even approx. how many dollars there are in worldwide circulation and obviously do not care(neither would I if I could print and spend what I wanted to).
The world bank is staffed by basic do-gooders on huge salaries that are vastly overpaid who speak diplomatic language/study graphs and are told by th U.N./Nato/and most of all the U.S. gov't who to give money to no matter what they privately think-example Belize is trying to sell the DFC without releasing the debts/profits(sic) spread sheets-the World Bank restructured the loans only a couple of years ago.
Chris, you and I are in agreement that changing would be good for Belize. Where I seem to differ from some of the rest of you is how easy that would be for Belize to do. I offer this web page as to the laws that El Salvador enacted with the change
http://www.bcr.gob.sv/ingles/integracion/ley.html the parts about requiring reserves and changing the local currency into dollars is especially relevent and is some of what I think would be difficult for Belize. It is not and cannot be done now, that is get US dollars for Belize dollars from the bank. The question I have is how will Belize get the US$ to do this? If they cannot get enough now, how will they get it when they change? I have yet to get a plausable answer to that question.
Also some factors that differ on El Salvador and Belize; El Salvador GNP 11BillionUS Belize less than 1BillionUS and El Salvador took a 50% devaluation in currency prior to dollarization.
Ecuador GNP 18BillionUS and also devalued it's currency losing 80% of it's value.
My point being, both those countries had a lot larger economy to work with and both devalued which Belize has yet to do unless you consider the 2.15 to 1 Casa de Cambio exchange rate which is only a fraction of what a true rate would be.
Bywarren, from your link: "The Law permanently fixes the exchange rate between the Colon and the US Dollar at 8.75 Colones per US Dollar, the same exchange rate that has been inplace for over 7 years."....where exactly was the 80% devaluation you spoke about? I was in El Salvador just after the February 2001 earthquake (we felt lots of aftershocks) and everyone was pleased with dollarization and the way it went. Why can't Belize follow suit?
It is easy to look for obstacles rather than solutions. It might be a BIT of bother for Belize to dollarize but the benefits would be felt very quickly by the vast majority of Belizeans.
When I think of those who would lose money because of dollarization I laugh so hard my fillings ache: The Central Bank of Belize and Black market money changers.
The El Salvador colon was 2.50 to 1 until 1986 when it was devalued to 5 to 1 and at the change to dollarization it was 8.75 to 1.
If the same holds true for Belize as for other countries that went to the dollar, and from all the accounts of what the Belize dollar is actually worth, it will be the people of Belize that have all of their savings in Belize dollars that will be hurt.
Once again Chris, we are in agreement that dollariztion could be good for Belize. I just think it important for all to realize the sacrafices that will have to be made. It is not a simple solution without consequences.
Man ,I only wanted to go fishing and have a Belikin!
Pedro,
In my opinion, Your understanding of the US economy is right on. I have only run across a handful of people that understand this. Too bad, because this is scary stuff that far more people should understand. Especially if they have any intentions of holding on to their wealth. The US's worst nightmare is that Euro takes the place of the dollar as the preferred currency of the world and that all those dollars come flying home...
never happen - W and Tony will step in first