New Orleans Packing for the flight to Nairobi over Sunday and Monday, I read with interest a piece in the times about the usual run of charges that companies were charging for use of credit and debit cards outside of the boundaries of the USA covered in the “Your Money” column in the Times by Ron Lieber. With other credit card reforms going into effect now, Lieber – and I dare say the rest of us – didn’t get why many credit card companies are in some cases charging 3% of the total transaction for a simple conversion from whatever the local currency might be into dollars.
Lieber’s slant was that these travelers were thought to be high end and corporate, so in essence Congress was turning a blind eye in their direction in order to allow many of the credit card companies to pick up some excess profits since they were taking them off the gravy train on some of their predatory rip-offs. His best guess was that the risk was very low: 7 cents on $100.00 against the normal charge of $3 on $100.00!
I notice these charges all of the time on the trail for ACORN International, and they gall me to no end, not being rich and not wanting to carry more cash around than makes prudent sense. I also am in the great country of Canada 3 to 5 times a year and it is absurd for the credit card companies – which are huge there – to act like they are in the deepest depths of some rain forest somewhere and a target for fraud. Come on!
When I read someone like Lieber speak about how easy all of this processing is for these giant credit card companies — many of which are of course bank run now through Chase, Citi, American Express, etc – it also reminds me why these charges should also be reduced for remittances the same way. There’s really no reason for paying so much freight for a simple electronic transfer of funds!
But, Lieber is right. Congress may not be hearing from the business traveler and the well to do, and it’s a cinch they are not carrying about the migrant workers trying to send money back to their families in the home country.
What does it take to force credit and debit folks to learn about equity.
One happy note: big props to Capitol One (where I have my money and where I have a debit/credit card) because they DO NOT CHARGE this ridiculous surcharge. They said something to the reporter about caring about the customer. Hey now!