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Bank of America: foreign transaction fee now applies to any merchant who processes transaction in foreign country, even if in US dollars

1,444 321 June 29, 2020 at 04:34 PM in Finance
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Not sure where to put this ..

I just received an amendment to my credit card agreement with Bank of America. It says:

A "Foreign Transaction" is any transaction (1) made in a foreign currency, or (2) made in US dollars if the transaction is made or processed outside the United States". Foreign transactions include, for example, online transactions made in the US but with a merchant who processes the transaction in a foreign country. If you are making a Foreign Transaction, we will assess a Foreign Transaction fee as set forth in the Foreign Transaction fees section of this Agreement.

#2 is a major change from what all my current credit cards (6) do. You could always avoid the foreign transaction fee if you made the transaction in US dollars.

Now, with the B of A change above, you may make a purchase on the internet without knowing the merchant is based outside the US, and end up paying a foreign transaction fee. For example, Zenni Optical manufactures its glasses in China. I'm not sure where the merchant (Zenni) processes the transaction - but with this change, I certainly won't feel safe using the B of A card to make purchases through Zenni Optical.

I'm going to be cancelling my B of A card and making sure they understand that it's due to this very sneaky way to try to increase how much they earn from stealth fees.

I have a Capital One card which does not charge for foreign transactions. Going forward, it's likely going to be the only card I use for internet transactions, since it isn't readily apparent where a merchant processes its transactions. I may also file a complaint with the CFPB, but only when there's a more consumer friendly executive branch in place.
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Joined Jan 2010
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#2
It has never been a good idea to do a foreign transaction in US dollars, as it costs you more. Always do the transaction in the foreign currency. There's a very long thread over on Flyertalk about this.
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#3
Quote from ProfessorChaos
:
It has never been a good idea to do a foreign transaction in US dollars, as it costs you more. Always do the transaction in the foreign currency. There's a very long thread over on Flyertalk about this.
Yes, I understand that. (But it others may benefit from that advice, so it is valuable to them.) You missed the point, however,

My point, was that it may not be clear (or impossible to determine) that an internet merchant is processing the transaction in a foreign country, in US dollars. Bank of America is now charging foreign transaction fees for purchases made in US dollars, if the merchant processes the transaction in a foreign country.

When purchasing things on the internet, it is often unclear or impossible to know where the merchant is processing the transaction. That's the problem here. For example, where does Zenni Optical process its transactions? Glasses from them are manufactured in China - so it's very likely the transactions are processed in China, even though they're made in US dolars.
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Cajun Trollop
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#4
Those fees are why i stitched to a Capital One Venture card. I had a BoA card for 11 yrs, and had excellent credit. When i asked if i could simply switch to their no feed card, I was told i would have to reapply and it would show me as a brand new card holder. For that, I switched to a better interest rate and a higher limit, plus better rewards.
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Joined Aug 2005
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#5
Quote from Ms.arteest
:
Those fees are why i stitched to a Capital One Venture card. I had a BoA card for 11 yrs, and had excellent credit. When i asked if i could simply switch to their no feed card, I was told i would have to reapply and it would show me as a brand new card holder. For that, I switched to a better interest rate and a higher limit, plus better rewards.
Were you too chicken to ask for a supervisor?
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#6
Quote from lazzlazz
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Yes, I understand that. (But it others may benefit from that advice, so it is valuable to them.) You missed the point, however,

My point, was that it may not be clear (or impossible to determine) that an internet merchant is processing the transaction in a foreign country, in US dollars. Bank of America is now charging foreign transaction fees for purchases made in US dollars, if the merchant processes the transaction in a foreign country.

When purchasing things on the internet, it is often unclear or impossible to know where the merchant is processing the transaction. That's the problem here. For example, where does Zenni Optical process its transactions? Glasses from them are manufactured in China - so it's very likely the transactions are processed in China, even though they're made in US dolars.
Thank you for pointing this out. I made a small online purchase the other day and was surprised to immediately get an e-mail alert from BofA saying I will be charged a foreign transaction fee. I had no reason to think that this company was international. The fee seems to be 3%, which for me is offset by my 3+% BofA bonus rewards for online shopping. But I agree that it's still annoying that there's basically no way to know until once you've made the purchase that this fee will be charged.
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#7
Quote from emelvee
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Were you too chicken to ask for a supervisor?
You missed the whole point: Capital One is one of the best CC for travel; it has no foreign transaction fees, good rewards, and no annual fee.
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#8
I think the take here is to choose a CC with no foreign transaction fees.
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