Monday, March 07, 2005

Capitalism At Its Best


In today's mail, I received a notice from Citibank:
Transaction Fee for Purchases Made in Foreign Currencies:
For each purchase made in a foreign currency, we add an additional FINANCE CHARGE of 3.0% of the amount of the purchase after its conversion into U.S. dollars. The foreign currency transaction fee will be added to the appropriate purchase balance with the foreign currency purchase. The foreign currency transaction fee may cause the annual percentage rate on the billing statement on which the purchase made in a foreign currency first appears to exceed the nominal annual percentage rate.
Well yes, it would do that, wouldn't it....

So are my eyes deceiving me? I contacted Citibank:
I want to make sure I understand your changes in terms:

For purchases made in a foreign currency, you will assess a 3% finance fee, even if payment in full is made at the end of the billing period such that no other finance fees are charged?

That is, this "finance fee" cannot be avoided, if one makes a purchase in a foreign currency?

Thanks for your clarification.
They replied:
If you make payment in foreign currencies you will be charged 3% finance fee on that. As such this fee can not be avoided.

Thank you for using our website.
Um... gouging?

3 comments:

  1. Um . . . maybe time to look for a new credit card company?

    Also, for the record I don't think capitalism and "price gouging" are synonymous. Closely related perhaps, but not interchangeable. (I give you the Venetians charging inflated prices to "ferry" crusaders, the Roman Catholic Church selling indulgences and adoption agencies.)

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  2. Nobody asserted them as synonyms.

    However, this would seem to be an example of price gouging (in the fine print of a notice the credit card company anticipates most will throw away) to be hidden in the converted purchase price such that most consumers will never even know they are paying a "finance charge", in the name of "capitalism".

    Do you concede a difference?

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  3. the top of the letter says "Right to Opt out" and on the bottom of it you'll find the instructions on how to do it. You may use your cards under the current terms until the end of your current membership year or the expiration date on your card – whichever is later.

    found our site on yahoo.

    flav@flavnyc.com

    ReplyDelete