# Credit Card: Consider charges before using for Large International payments



## ccraig (5 Mar 2009)

_Moderator note_: this post is factually incorrect. Do not rely on it when deciding payment methods.

Never use a credit card when making a high ticket payment overseas:

Having considered the option of using a credit card to make a car payment in the UK its amazing how much hidden fees there are. Whilst most people assume that loading up a credit card is the cheapest option it is not at all. Using a credit card can cost you almost €1000 on a £15,000 payment


Payment: £15,000

*AIB: *
1.75 fx fee
1.5% advance fee (even if you have your card in  credit)
1.5% (normally charged by the car  dealer i.e he passes on his merchant fee)
Total  4.75% or €712.50


*Bank of Ireland*
1.75%  fx fee
1.5% fee (only applies if you are in debit, however if you go even 1  cent in debit you pay 1.5% on the total sum)
1.5% (normally charged by the car  dealer i.e he passes on his merchant fee)
Total: Up to  4.75% or up to €712.50


*Bank Draft* i.e Bank of Ireland
7 euro plus 2% on fx
Approx €340


Cash (sterling bought at bank)
 Up to 3%: approx €500


*xe.com or www.currency.ie*
Rates change every fee seconds, better rates than the banks when checked


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## jhegarty (5 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

Sorry , why are you paying an advance fee on a purchase ?


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## CCOVICH (5 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

Yeah, how can you be charged a cash advance and also be charged a merchant fee by the dealer?

But good to see a post like this put together.  I found a draft to be the 'best' method around this time last year-as long as the dealer is happy to accept and he can verify over the phone.


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## ccraig (5 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

I know, its crazy. Just spoke with both boi and aib and its in clear writing on the aib website. Boi will apply it if you go a cent over

EUR1.90 or 1.5% of the transaction value, whichever is greater (CLICK and 'be' credit cardholders please note the cash advance fee will apply for accounts in debit and in credit)

Drafts can also be expensive as the rate you are given is usually not the most favourable plus if you do need to cancel it you get slaughtered on the rate back as a sterling draft is useless to you


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## jhegarty (5 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*



ccraig said:


> I know, its crazy. Just spoke with both boi and aib and its in clear writing on the aib website. Boi will apply it if you go a cent over
> 
> EUR1.90 or 1.5% of the transaction value, whichever is greater (CLICK and 'be' credit cardholders please note the cash advance fee will apply for accounts in debit and in credit)
> 
> Drafts can also be expensive as the rate you are given is usually not the most favourable plus if you do need to cancel it you get slaughtered on the rate back as a sterling draft is useless to you




But there is no possibly way a merchant free and cash advance fee both apply.


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## ccraig (5 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

Oh but there is,
Cash advance is the fee charged on this end.
Merchant fee is the fee that the merchant in i.e the UK 'may' pass on or choose to absorbe.


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## CCOVICH (5 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

ccraig-this isn't making sense.

1.  Did you take out GBP on your credit card?
2.  How did you pay for the car?


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## jhegarty (5 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*



ccraig said:


> Oh but there is,
> Cash advance is the fee charged on this end.
> Merchant fee is the fee that the merchant in i.e the UK 'may' pass on or choose to absorbe.



Sorry, not possible unless there has been a major change to the way credit cards work recently.


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## ccraig (6 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

Jhegarty, its not only possible, its a fact. That you werent aware, doesnt conclude that it is a major change.

Ive spoken to Boi about this who confirmed that aib do charge an advance fee, debit or credit which can also be seen on aib website. This is 1.5%

Boi have also explained that while they only charge an advance fee when cards are used in credit, they will charge 1.5% on everything once you are 1 cent in credit.

This advance fee goes to the card issuer.

As a retailer, i was advised to check with the car dealer to make sure they are not passing on their 1.5% merchant fee which again is on top of the fx fee and advance fee. It is the fee they must pay for booking a sale that can be passed on the same way many travel agents do.

ccovich, i have bought cars up north and was considering doing this with a credit card however having seen how expensive it actually can be, wanted to share this.

Note Worst case scenario it is 1.5%, 1.5% plus 1.75%
Do the same outside the EU and its 1.5%, 1.5%, 2.75%


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## jhegarty (6 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

Well I have never paid a cash advance fee except when using an ATM.


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## bullworth (6 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

I always thought the BOI credit card (when loaded with cash into credit) was the best way to pay for everything or to take money from atms while abroad ? Has this changed ?


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## CCOVICH (6 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

You cannot be charged both a cash advance fee by the bank and a merchant fee by the retailer.

You have your terms mixed up or you are confused.

Scenario 1

You go to the UK and buy a car outright with your credit card (i.e. you hand it to the dealer and they swipe it). You will be charged a margin on the fx (note this is generally better than you will get when buying cash), a cross broder handling fee, and the UK dealer may seek to pass on their merchant fee (but you can haggle on this charge as it is not automatic). 

You will not be charged a *cash* advance fee as you have not withdrawn *cash*. 

Scenario 2

You go to the UK and withdraw *cash* using your credit card. You will be charged a fx fee/margin by the bank, a *cash* advance fee, a cross border handling fee, and you may also be charged a fee by the ATM provider in the UK, and you may also face interest from the date of transaction regardless of whether or not you pay your bill on time (depends on the card). 

You hand over the *cash* to the dealer. Please explain how this attracts a charge from the dealer?



			
				ccraig said:
			
		

> Ive spoken to Boi about this who confirmed that aib do charge an advance fee


 
Eh? BoI told you what AIB do?


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## MugsGame (6 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

I concur with Ccovich that you are mistaken in claiming both cash advance and merchant fees apply - this is impossible on a single transaction.



ccraig said:


> Ive spoken to Boi about this who confirmed that aib do charge an advance fee, debit or credit which can also be seen on aib website. This is 1.5%



Only for [broken link removed]:


> CLICK and 'be' credit cardholders please note the cash advance fee will apply for accounts in debit and in credit



That certainly explains why AIB have been trying to get me to "upgrade" from my existing AIB card, which doesn't have this charge when in credit. So thank you for drawing this to my attention!


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## ccraig (11 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

Mugsgame,
Your thread is not logical. Cash advance fee has nothing to do with Merchant fee. Merchant fee is discretionary, cash advance is not. Cash advance is charged by your bank, merchant fee can be charged by the retailer on top of your purchase.

If in doubt contact BOI and they will confirm.

In any event, the fact is, you will be charged any sum or all of the charges listed above depending on the bank you use and the retailer you buy from. Being aware of these charges in advance should leave you better equipped in deciding on how you ultimately pay.


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## jhegarty (11 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*



ccraig said:


> Mugsgame,
> Your thread is not logical. Cash advance fee has nothing to do with Merchant fee. Merchant fee is discretionary, cash advance is not. Cash advance is charged by your bank, merchant fee can be charged by the retailer on top of your purchase.




Sorry, you are wrong here again.

Merchant fee is always charged to the retailer by the card issuer/processor. If it's passed on is another issue.

Cash advance is charged to the customer by the bank when withdrawing cash and not making a purchase (usually though an atm).

Do you pay a cash advance fee when you use your card in spar ?


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## ccraig (11 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*

I was referring to the fact that it is up to the retailer whether he chooses to absolve the merchant fee or to pass it on by charging it on top of the purchase, which many travel agents have been vilified for doing

In answer to your question on spar, i have already stated that this depends on who issued your card. See below. 

http://www.itsyourmoney.ie/index.jsp?pID=121&nID=305
*'Cash advance fee *

This is a transaction fee charged each time you make a cash withdrawal on your credit card. Some providers charge this fee even if you have already paid enough cash into your account to cover the withdrawal amount.'


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## jhegarty (11 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*



ccraig said:


> In answer to your question on spar, i have already stated that this depends on who issued your card. See below.
> 
> http://www.itsyourmoney.ie/index.jsp?pID=121&nID=305
> *'Cash advance fee *
> ...



You can link to charges and conditions about cash advance fees all you want , the problem is that you don't know what a cash advance is.


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## CCOVICH (11 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*



jhegarty said:


> You can link to charges and conditions about cash advance fees all you want , the problem is that you don't know what a cash advance is.


 

+1 to that.


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## markpb (11 Mar 2009)

*Re: Credit Card: Avoid using for Large International payments*



ccraig said:


> I was referring to the fact that it is up to the retailer whether he chooses to absolve the merchant fee or to pass it on by charging it on top of the purchase, which many travel agents have been vilified for doing... This is a transaction fee charged each time you make a cash withdrawal on your credit card. Some providers charge this fee even if you have already paid enough cash into your account to cover the withdrawal amount.'



If you make a cash withdrawal (ie remove money from your credit card via an ATM), your credit card is not used in the purchase. You are paying cash. What merchant fee applies in a cash transaction? None.

If you pay for your purchases using your credit card, there is no cash, there is no cash advance so there is no cash advance fee.

It's one or the other.


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## MugsGame (11 Mar 2009)

ccraig - the proof that you are wrong is that you haven't actually used your card in a shop to make a purchase and been charged a cash advance fee. You don't have a credit card statement that supports your calculations above. You are working this out in theory, considering your options before making the purchase, which is good practice. 

But your theory is wrong due to a misunderstanding over what a cash advance is - it's where you withdraw *cash* from your card (usually from an ATM or bank, but it also applies where you transfer money from your credit card to another bank account, because you could then withdraw cash from that account.). 

Finally, don't rely 100% on what your bank call centre tells you - they often don't fully understand the details of their own products.


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## Bubbles34 (11 Mar 2009)

I've made a larger payment by credit card last year in the US - around 4000 Euros and I can't remember seeing charges like this


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## mooney76 (11 Mar 2009)

_Making a purchase using a card_

Cash advance fees are not charged if using your credit card to make a purchase.

Exchange rates are charged 2 days after the purchase so you have no way of knowing what rate you will be charged on the day of payment. Rates are not 1.75% (visa card), 1.91 (mastercard). You can be sure they will take the low of the day so realistically you will be paying at least 2%

_Using an ATM_
You pay be charged an advance fee if your card is in credit or debit.

i.e Mastercard standard card only charges if you are in credit,
Mastercard b card charges if you are in debit or credit when withdrawing money from an atm.


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## Hybrid Boss (28 May 2009)

If your credit card is in credit & you withdraw at an ATM you are not charged a cash advance fee, how can a bank charge you a cash advance fee on your own money!


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## MugsGame (28 May 2009)

Hybrid Boss said:


> If your credit card is in credit & you withdraw at an ATM you are not charged a cash advance fee, how can a bank charge you a cash advance fee on your own money!



Actually ccraig is right about one thing - AIB do charge you for withdrawing cash from Click or Be cards, even if the account is in credit. See an earlier post from me above. Where ccraig is wrong is assuming this cash charge applies to purchases - it doesn't!


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