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buying dvds credit card charge

Discussion in 'Movie Forum' started by andya, Jan 28, 2004.

  1. andya

    andya
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    hi have been getting my dvds the last couple of months,and noticed i get charged 2.7% on my card .is there any way round this that any one knows and is there a credit card company that doesnt charge.thanks
     
  2. Branxx

    Branxx
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    Where are you buying the disks from, what is CC issuer?
     
  3. JAMBO

    JAMBO
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    I'd imagine the charge is from the supplier of the DVD's not the Credit Card company.... unless it is a foreign currency exchange charge (if you are buying in a currency other than £ sterling).
    If the charge is made by the supplier of your DVD's, then they are really ripping you off. The credit card companys receive 2.5% of the sale cost from the retailer, as a sort of commission/service charge. Most retailers allow for this in their price and absorb it themselves. Some companies, mostly travel agents, add 2.5% on to the bill, to allow for this charge to be paid by the customer.
    So at 2.7%, they are actually charging you an extra 0.2% for their profits. Not a lot on 1 DVD, but since most people pay by credit card these days, it puts an extra 0.2% on their total turnover/profits.
    Best way to stop paying it.... Go elsewhere, and tell them why.
     
  4. andya

    andya
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    i get my dvds from dvd pacific ,and they are in the usa
     
  5. graham.myers

    graham.myers
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    I get a 2.x % surcharge by my CC company for currency converison
     
  6. JAMBO

    JAMBO
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    Nationwide Building Society have no currency conversion charges on their Credit Cards....and 0% interest for 6 months on balance transfers, if required.
    All you need to do to avoid paying the charge is get a credit card from them.
     
  7. LV426

    LV426
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    Nothing is that simple (if only it were).

    The exchange rate used for converting currency to sterling isn't legally defined anywhere. Your card issuer can use any rate they choose.

    So, to say there is no conversion charge, whilst it may be true, isn't necessarily enough to indicate that theirs is a better deal. If they happen to use a rate that is (say) 3% worse than the next card - you will actually pay more.

    I'm not claiming to know that they do this.....they may not.

    Those card issuers that inform you of their included fees are simply being open and honest - other issuers can and do use rates that have been 'shaded' to include a fee element, which typically does vary between 2.25 and 2.75%. But all they quote on your statement is the rate they used (which INcludes their fee).

    Anyhow - the amounts involved are tiny. On a sale worth GBP20 - 2.75% works out at 55p.
     
  8. Branxx

    Branxx
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    I agree with Nigel on the FX tricks.

    After my return from the shopping to Calais last December I queried my CC company (HSBC) on the FX variations for number of transactions completed on the same date and very similar time (you need to ask them the exact time the FX was applied).

    Banks usually have 2 FX rates: one for small transactions and another for larger ones. The small transaction rate will be applied to anything less than £5,000. The rate (bid or offer) would be usually 3-5% away from the mid market. On a top of this they charge extra 2.5% foreign transaction charge.

    The only way to truly control what is happens when currency gets converted in to get CC in the currency you need, e.g. USD. You can convert as and when it suits you and negotiate the rate.

    However, even this is usually not useful unless you are dealing with high volumes of purchases in foreign currency.

    Nationwide’s CC offer maybe good one if they would commit to a particular bid/offer spread as well.
     
  9. andya

    andya
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    ill get in touch with them right away.thanks
     
  10. FoxyMulder

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    My American Express has a 2.7% i believe currency conversion charge, not sure what that would work out at when buying from Japan or America.
     
  11. LV426

    LV426
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    OK - Worked example (completely ficticious):

    Credit Card Company A says that they do not apply a conversion fee to foreign transactions.

    Credit Card Company B states that they DO charge a conversion fee - 2.75%.

    Which card do you take?

    (Simple? No!)

    You buy some goods worth USD200 exactly. You ask the supplier to split the bill 50/50 across your two credit cards - USD100 each.

    Card B's bill arrives.

    USD100 @ 1.80 = GBP55.56 + 2.75% fee
    = GBP57.08 total.
    (Ripped off to the extent of GBP1.53).

    Card A's bill arrives. Same date, same amount. No fees, BUT.....

    USD100 @ 1.72
    = GBP58.14

    So - which card was the better deal - the one with the fee, or the one without?
     
  12. StooMonster

    StooMonster
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    or if you are my bank

    USD100 @ 1.72 + 2.75% fee
    = GBP59.67

    Ah ... FX, SWIFT codes, brings a tear to the eye.

    StooMonster
     
  13. Branxx

    Branxx
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    Nigel,

    In either case the effective rate applied is about 5% away from the mid-market. It is very dificult to control or win the CC foreign exchange game unless you personally oversee the currency conversion process.
     
  14. FoxyMulder

    FoxyMulder
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    My Card applies the exchange rate to american currency not UK.
     
  15. Reiner

    Reiner
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    I thought they have to choose the exchange rate on the day of the billing?

    Gladly down here I never get charged except by travel agents though sometimes you don't receive the best discount when using CC. For mail order of DVDs I have never been charged any fees by the retailer nor by the CC company.
     
  16. IanD

    IanD
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    I am pretty sure that if you use a Lloyds TSB debit card they just convert from the current exchange rate and do not apply a handling fee either.
     
  17. LV426

    LV426
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    Ah yes...... but what exactly IS "the current exchange rate"? This is my point exactly. It isn't defined anywhere.

    Nobody, but nobody (no, not even wholesale money traders) converst at the rate they quote on the TV or in the papers. Everybody applies a spread to the city rate - buy currency at a high rate, sell it at a low one. That's how they make a profit.

    So the question becomes 'how much spread on the middle rate does the card issuer apply?' And it can be pretty much anything they think fit.
     
  18. malcy

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    If you are UK based then the Nationwide CC is definitely the one to get. I have found that they were applying a much better exchange rate plus no foreign currency charge compared to the MBNA & NatWest cards I was using previously. The difference was more than the 2.75% of so foreign charge.

    Also provided you pay off your balance each month then take the cashback card of 1% in first 6 months & then 0.5%
     

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