Thursday, November 20, 2008

Signs of the Economic Apocalypse, Part 6

American Express is upping to 2.7% its fee for charges made in foreign currency. That's a hike from Amex's previous 2% fee. Most Visa and Mastercard cards have charged a total of 3% for some time.

According to this trenchant article in The New York Sun last year, Amex had to hold their fee down at 2% for a few years while a class action suit over its fees was pending.

The new fee goes into effect January 11, 2009, at least on my card. My guess is Amex, which, like most financial companies, is under serious market pressure, couldn't bear to leave that kind of money on the table. I don't know what 0.7% of the firm's total foreign currency transactions is, but it's got to be a lot.

Addendum: I discovered in China this summer that Discover Card charges nothing for foreign exchange. In addition, Discover is probably the most widely accepted card in China, though paradoxically most merchants have never heard of it.