I travel abroad a lot, and I've been shocked by the surcharges that appear on my credit card when I make a purchase overseas: three percent of everything I buy. It's even applied to purchases I make in this country from a foreign merchant. Is there a credit card that charges less than three percent?
A. Visa, Mastercard and American Express all tack on a one percent surcharge to foreign purchases. In addition, the bank that issues your card (Chase, Citibank, etc) add on their own 2 percent or more. There's just one bank I know of that doesn't: Capital One. As far as I know, and this is from their PR department, Capital One does not add a surcharge of their own to foreign purchases, typically 2 percent these days. They also claim (insist?) that they do not pass along the additional one percent fee that is imposed by Visa and Mastercard themselves (both the banks that issue these cards, plus the credit card companies themselves, add on fees). Oddly, Capital One doesn't make a big deal about this on their site; and you should realize that policies can change. So I would check it out (800-955-7070 or capitalone.com)
Q. Is the Capital One "no hassles" credit card all its cracked up to be?
A. You might want to read these comments from some readers of this column:
"My husband and I have three Capital One cards, one for each of us and one for our business," wrote one reader. "I have used our travel miles twice, once for a trip for our family and once by myself, and have never had a bit of trouble. The people who work in the travel section are very helpful and courteous. I would highly recommend this card." Another wrote, "I read your column in yesterday's paper. We have a Capital One "No Hassle" card here at work. I used the points just last week to obtain a free airline ticket for my boss, and I must tell you, it was "no hassle." You call the toll-free number provided, they connect you with a travel agent that books flights for their and before you get off the phone, they have e-mailed your e-ticket to you. It was pretty simple. They were very friendly, checked a couple of different flight scenarios, etc. We were pleased." And a third writes: "Years ago I decided to avoid completely the credit cards that are tied to any single airline"s frequent flier program. I understand it is only reasonable that an airline will limit frequent flyer mile redemption on their most profitable and popular routes. But why should I subject all my non-airline purchases to the limitations of one airline"s frequent flyer program? Your advice is good. There are numerous credit card companies that offer travel award programs without such limitations. As an alternative to Capital One, I have a Chase Visa card, with membership in Chase TravelPlus, with a $50 annual fee. Then I earn a point for every dollar spent on any purchase billed to the card. Points are redeemed by calling Chase TravelPlus, which functions as a travel agency, and has all the flights available to you that any travel agent would, without being subject to limitations of a frequent flyer program." [More info at www.ichoosemyrewards.com or 877-521-2400].
And this bit of advice from another: "According to Money magazine (Feb. 06) with Capital One's "No Hassle" card the "trick" is in the points charged for travel. The number is equal to the cheapest ticket you can find multiplied by 90. A $200 fare would "cost" 18,000 points whereas a $500 fare would cost 45,000 points, which is much higher than the normal 25,000 points charged by the airlines for a $500 ticket. Always read the fine print if you can even find it," he advises. But I guess the point is that if you have 45,000 points to spend, you"re sometimes better off with a no-blackouts card than with an airline program that won"t let you spend your points, no matter how many you have, because there are no award seats.
Q. Can I add my two cents worth about the Capital One "Hassle Free" credit card? The Hassle-free program is not hassle-free and is a rip-off. The program used to work the way others do: redeem a specified number of miles for a ticket to a specific area, usually something like 50,000 for a trip to Europe. The new requirement is that the traveler has to buy and pay for a ticket from whatever source he or she wants to and put it on the Capital One card. Then you take the ticket price and multiply it by 100. That total represents the number of miles you must redeem. Right now that would require 120,000 redeemed miles to go to Europe this summer. Do you have any suggestions for a better plan?
A. Well here's the thing. Let's say I have 120,000 miles in my account on XY Airlines. I want to go to Europe this summer, but the dates and routes I want aren't available (by the way, that trip would cost a lot of miles, even if seats were available). So the miles just sit in my account gathering dust. On the other hand, I can use the 120,000 points in my Capital One account. Maybe the trip "costs" more but at least I can spend them. What good are airline points if the airline tells me I can"t use them. Isn"t it better, if what you say is true, to be allowed to use your miles without restrictions? Also, I"ve seen lots of fares to Europe for $500-$700 this summer, including Seattle to Germany for $500, so that would only be the same 50,000 miles if what you say is correct. I"m not on Capital One"s payroll, but for some people it may be a good choice.