CAMP RED CLOUD, South Korea — Servicemembers making purchases from both on- and off-post vendors may find they’ve spent more than they thought if they’re using a Visa card.
On April 4, Visa extended its International Service Assessment fee to include overseas transactions in dollars.
Previously, the assessment ranging from 0.15 percent to 1 percent of a purchase applied only to transactions processed in a foreign currency.
Visa does not charge customers itself, according to a statement issued by the company following a Stars and Stripes query.
However, many financial institutions pass on the Visa assessment to customers. Others piggyback their own fees.
Visa says customers shopping at the post exchange, commissary and U.S. Embassy won’t be charged the extra fee, as long as the transaction is processed as “domestic.”
However, overseas vendors do operate on post throughout Europe and the Pacific theaters within storefronts run by the military exchange services and Morale, Welfare and Recreation.
“If the vendor is banking with an off-installation international bank, the fee would most likely apply,” said Master Sgt. Donovan Potter, Pacific spokesman for Army and Air Force Exchange Service, in an e-mail.
Vendors do have the option of banking on post, which would likely negate the fee, Potter said. Furthermore, not all financial institutions have begun passing on the Visa fee for dollar transactions.
If they begin to do so, they are required to notify customers, according to Visa’s statement.
Some have issued the notices with monthly statements.
Navy Federal Credit Union also sent the notice as an electronic message for its online banking members.
Visa charges Navy Federal 0.8 percent for overseas transactions in dollars and 1 percent for purchases in foreign currencies, said Susan McClure, Navy Federal credit card system manager in Vienna, Va.
Visa may charge other financial institutions lower rates, but declined to answer Stripes’ question on how it determines its charges.
Navy Federal passes on the Visa assessment to its customers — but doesn’t add any further charges.
“We’re not trying to make more on top of it,” Navy Federal spokeswoman Jennifer Sadler said.
Bank of America, which also issues Visa cards for Community Bank and MBNA, charges a 3 percent transaction fee for Visa purchases in foreign currency, said spokeswoman Betty Reiss, of bank headquarters in San Francisco.
Previous Stripes stories have listed the Community Bank fee at 1 percent, as did a letter to the editor from Friday’s Europe editions. Bank of America officials were not available Sunday to clarify the discrepancy.
However, Reiss gave no indication that the bank would be passing on the newest Visa fee on dollar transactions to customers.
Credit card transactions in U.S. dollars, regardless of location, are not assessed a fee, Reiss said.
At Yongsan Garrison in Seoul, civilian employee Ken Kaliher says he received notices from U.S. Bank and USAA in March that all overseas transactions would have the fee assessed.
Kaliher and his wife had already changed their buying habits when they first heard about a foreign currency fee in 2006.
“We used to pay for our airplane tickets by credit card with a Korean travel agent. We don’t do that anymore,” Kaliher said.
Kaliher sent online messages to both banks’ service representatives, asking if purchases made on U.S. military bases incurred the fee.
Both banks replied that they did; U.S. Bank may charge up to 3 percent, while USAA charges 1 percent.
The responses prompted Kaliher to call Stripes for answers. Meanwhile, he sent follow-up messages to confirm the fees.
The second time, U.S. Bank said that they do not charge the 3 percent fee on dollar transactions anywhere, including military bases.
The second USAA e-mail reiterated that their 1 percent fee did include overseas bases.
U.S. Bank did not respond to Stars and Stripes’ queries for clarification.
However, a Stripes query to USAA headquarters in San Antonio, Texas, produced a quick response: No, USAA doesn’t charge the fee for dollar transactions and normally wouldn’t on military bases, spokesman Paul Berry said in an e-mail.
“If, however, the transaction is processed in the VISA system (by the merchant or the merchant’s bank) in a way that does not properly identify that the transaction occurred on the US military base or at the embassy, then the 1% fee will still be charged,” Berry wrote.
