Any Way to Avoid the Forex Transaction Charge?

[orsetto]

I'm accessing the SQ website stateside and don't see any option to change currency but fares are in the currency of flight origin. The only thing related to currency/forex is the disclaimer:

"Conversions are for reference purposes only. Final billing will be made as per the ticketing currency, and your bank will undertake any conversions."


When I book via call centre, I am always quoted, and I assume charged, in SGD. My bank statement only lists the converted amount. Not sure what the SGD-USD rate was 45 days ago but just calculated now and seems like I got better than the published exchange rate.

Credit cards do extract significant revenues through our foreign currency expenditure. That's why some of them "generously" give out extra miles if we use the card overseas.

I wish US banks gave out extra for overseas use if they keep the current trend toward no forex fees. JP Morgan Chase in particular has quite a few cards without the fees, especially the travel-related cards.

[SQ228]

There are a good number of cards that does a double exchange for cross rates. For instance if your card is based on SGD and you charged the expense in EUR, what they will do is convert to EUR to USD and then from USD to SGD. With the kind of wide spreads you see on the buy/sell currency ranges, they can pluck quite a healthy revenue from these services, on top of the charges they levy on the vendor.

Agreed! The biggest scam I have learnt never to be part of are the merchant terminals that offer for you to pay in your home currency. It gives the sense that you'll avoid all the currency conversion fees and get a good deal but the margins added to these amounts can be up to 20% I have found.

I always pay in the local currency on my visa card. My credit union only charges 1.5% for currency conversion which is usually done at the listed rate for the day, not at buying or selling cash rates. I get the same deal doing Visa withdrawals at ATMs with only a 2.50 AUD fee per withdrawal.

[CarbonMan]

That reassures me that they have no plans to begin forcing me to pay in a foreign currency.

Indeed, currency risks should be borne by SQ. Their Finance Dept should have hedges in place to keep their currency fluctuations in check.

Credit cards do extract significant revenues through our foreign currency expenditure. That's why some of them "generously" give out extra miles if we use the card overseas. As with the setting of borrowing/lending rates, I do think that exchange rates need to be regulated. There are a good number of cards that does a double exchange for cross rates. For instance if your card is based on SGD and you charged the expense in EUR, what they will do is convert to EUR to USD and then from USD to SGD. With the kind of wide spreads you see on the buy/sell currency ranges, they can pluck quite a healthy revenue from these services, on top of the charges they levy on the vendor.

It is therefore my practice when I go on vacation to carry as much foreign cash as I deem safe (change at Raffles Place) to pay for my big-ticket items like hotel and restaurants. Of course, one has to know and understand the risks and the inconvenience of carrying a significant amount of cash. I haven't done any specific comparisons but I would estimate that one can save at least 3-5%. IMHO.

[SQ218]

Just an update to my case.

Got a reply back they have passed my case to the relevant dept to process the reimbursement of the difference I was charged in AUD$ after the SGD$ conversion and also the Foreign exchange fee charged by the bank.

[SQ228]

haha sorry here it is

That reassures me that they have no plans to begin forcing me to pay in a foreign currency.

[SQ218]

I'd actually be interested to hear what they said in the 'Blah blah blah' bit...

haha sorry here it is

We are very sorry for the misunderstanding caused upon trying to finalise
payment for your booking online via our website. If we may explain, our
online system provides an option for passengers to make payment in a
different currency, by selecting from the currencies listed on the drop
down menu, if required. However, we wish to explain that it is not
mandatory to change to select a different currency. Passengers are able to
move onto the next page where they are able to make payment based on the
currency used in the departing country. In this instance, as you had
selected an itinerary that departed from Melbourne, the currency is
automatically arranged to provide you with a fare in Australian dollars as
well as make payment in this currency.

Should you wish to make a booking for future travel via our website, please
note that you would be able to confirm your itinerary and make payment
without having to select a new currency.

[Kyo]

I'd actually be interested to hear what they said in the 'Blah blah blah' bit...

[SQ218]

heard back from SQ

Dear Mr SQ218,

Blah blah blah

Nonetheless, as a gesture of goodwill, we would like to review the exchange rate that was charged to your account. We kindly ask that you forward a copy of your bank statement showing the exchange rate at the time and the total cost. In addition, we kindly ask that you advise us of the following information;

Bank Name
BSP
Account Name
Account Number

Once again Mr SQ218, we sincere apologise for the misunderstanding caused
and hope the above can be of assurance to you

[SQ228]

When I booked Icelandair (FI), I did one way in GBP, and one way in ISK, both flights booked separately.

I saved $11.82 by paying in ISK, as far as I can tell

(somewhat annoyingly, the reservation was in Icelandic with no translation option - didn't stop Google Translate, however!)

Yes, I thought I would rather pay in ISK but my Icelandic isn't exactly brilliant... That left me with the options of booking in English and paying in GBP or USD or in German and paying EUR. It billed to my credit card as 'IS' but the amount specified was the GBP amount- if only it had been 320 ISK!

What was interesting is that the CPH-DÜS sector is a codeshare with an SK plane and the CPH-KEF-CPH sectors are with FI 757s. Booking the exact same flights in reverse through SK with the FI sectors as the codeshares was WAY more expensive. Almost an extra 50% so definitely not worth it to gain the *A miles with SK. I'm guessing though, that with an FI codeshare flight number for my SK flight, they won't let me in the *A lounge.

[Liski]

So if paying with a Westpac SQ Platinum card it's better to select to pay in AUD on the SQ site/call centre?

[SQ218]

What???

I've never heard of this before! We have always paid in AUD on SQ.

May I ask how much the extra charge was in percentage terms? Always booking as a solo passenger in Y, $400 would be a 20% increase for me!

Yes, airlines may follow this practice, but I recently booked flights with Icelandair- I was quoted in GBP, I converted this to AUD using Google and was then billed to CC in ISK. The difference was only a couple of dollars more than my estimation.

I've always paid in AUD$ too. Just clicked next next. This time it stopped saying please select currency payment and in there was SGD, USD, Euro and some other can't remember.

In hindsight it should have rung alarm bells and make me call reservation to enquire. And just wanting to get this booking done I just selected SGD. I rang SQ and they said I selected foreign currency and should contact the Credit Card as it is the FX Charge. I said you never allowed me to pay in AUD like before and had no choice.

Rang the issuing bank they said why I selected foreign currency and explained the whole story and they were quite surprised by the choice of payment method from SIA. She mentioned something like 3.4% but I still failed to see how the maths got to in excess of over AUD$400. They said they are going to follow it up with SQ but not holding my breath.SQ228 it is a C fare.

Have sent an email to SQ and gave them a piece of my thoughts.

I can think of better ways to spend that $400 than giving it to the bank grrr...

[Kyo]

When I booked Icelandair (FI), I did one way in GBP, and one way in ISK, both flights booked separately.

I saved $11.82 by paying in ISK, as far as I can tell

(somewhat annoyingly, the reservation was in Icelandic with no translation option - didn't stop Google Translate, however!)

[SQ228]

I just got a shock too. Never had this issue previously when booking.

Just noticed the currency selection drop down when it comes to pay.

Got quoted in AUD$ when it comes to pay no option to pay in quoted currency so selected SGD$. Just saw what was charged on my CC was almost $400 more than the quoted fare

What???

I've never heard of this before! We have always paid in AUD on SQ.

May I ask how much the extra charge was in percentage terms? Always booking as a solo passenger in Y, $400 would be a 20% increase for me!

Yes, airlines may follow this practice, but I recently booked flights with Icelandair- I was quoted in GBP, I converted this to AUD using Google and was then billed to CC in ISK. The difference was only a couple of dollars more than my estimation.

[andrit]

That's a standard practice and isn't limited to SQ. Some airlines let you choose other currency options but it's not the norm.

Some airlines let you choose the currency for estimate purpose only, when you finalise the booking, you will be charged at the local originated country currency on your credit card. I always prefer to use my credit card fx rate rather than the quoted rate on the purchase website.

[SQ218]

I just got a shock too. Never had this issue previously when booking.

Just noticed the currency selection drop down when it comes to pay.

Got quoted in AUD$ when it comes to pay no option to pay in quoted currency so selected SGD$. Just saw what was charged on my CC was almost $400 more than the quoted fare