American Express has announced their intention to cut the foreign exchange fee – currently almost 3% – from their two premium credit cards lines, the US-based Platinum and Centurion cards. The fee is currently charged on all transactions that are posted in a currency other than US Dollars. The change is expected to be in effect towards the end of Q1 2011.
The foreign exchange fee is essentially pure profit for the credit card companies so they are generally loathe to waive it. In the face of significant competition from other issuers, however, the company felt it necessary to make the move. Chase has removed the f/x fee from their Hyatt and British Airways cards and Citi has removed it from a couple cards as well. There’s also the Schwab card (now serviced by FIA) that has no f/x fees. Considering that acceptance overseas is also lower for the AmEx products, being uncompetitive in costs was simply too much to make it reasonable for many folks to use it on transactions.
The change is still limited – only for the Platinum and Centurion cards – so the benefit will only apply to folks who are already spending a decent amount of cash annually to carry the card. And depending on which other cards you carry the value proposition for the loyalty points might still tend towards the other cards. But it is certainly nice to no longer be faced with paying an extra 3% for no particular reason at all.
Read more about it here.