3% Credit Card Charge

[SimonCC]

Many shops are charging an extra 3% if you want to pay with your credit card. If I am not mistaken, as in most other countries, this cost supposed to be absorbed by the seller, not the buyer. The few times I tried to explain this fact to the sales person in the shop, they simply reply that if you do not want to pay the extra 3% you just pay cash.

Any suggestions to persuade these shops to change there (illegal?) habit?

[mesquite]

Pretty common in other countries here in SE Asia as well. Not all shops do it, though. I follow the advice your sales rep gave to you: Pay cash.

[jerojero]

Dare I say what most are thinking? T I T

[gerry123]

only got away with that once purchased high end a/c unit declined the sale but very quickly took the offer of ok no charge

i guess the guy was hungry for the sale don't even bother using c/c now sometimes use my debit card even then some will try the 2/3 percent i either decline or use cash

[NeverSure]

I know only about Visa, M/C and Amex. It's strictly in violation of the store's merchant agreement. Of course the credit card issuers don't want them doing that and discouraging use. They would lose their merchant status if caught so if you want to go to the trouble of reporting them including sending in documentation go ahead. It isn't worth the hassle to me.

If merchants lose their ability to take those cards their sales plummet so it's a two way street. The CC companies are very strict about this and the merchant pays the fee to make the sale.

Up to you.

[TallGuyJohninBKK]

I've lived in Thailand for many years at this point, and can't recall more than a handful of isolated cases where the local merchant wanted to charge me an extra fee for using my bank card.

Usually, they either don't take any credit cards, only take them above a certain bill amount, or do take them without any extra charge.

The bigger issue is people's home country banks often adding a 3% or more foreign currency/foreign transaction fee to everything you do outside your home country, ATM withdrawal or purchase.

[CharlieH]

Wrong forum

MOVED to Banking

[rak sa_ngop]

The bigger issue is people's home country banks often adding a 3% or more foreign currency/foreign transaction fee to everything you do outside your home country, ATM withdrawal or purchase.

From my experience it doesn't make much difference whether your credit card payment is in the local currency or converted to your home currency. If you convert you get a poor exchange rate, and if you pay with the local currency they slap on the foreign transaction rate.

So all in all using credit cards can cost you about 6 %.

Best to leave them at home and use them just for emergencies.

[RolandRat]

Pay attention "grasshopper" if you try to apply western standards/rules here you will just make yourself miserable and frustrated.

You are trying to apply the rules of Chess that you have learned, to a society playing Naughts & Crosses.

Forget all that you have learned, let the unlearning start and the enjoyment of all that is Thai unfold before you.

Go with the flow, its much less stressful.

[vaultdweller0013]

There is no blanket rule by Visa/MC that prevents merchants adding surcharges. Whether it is allowed or not will depend on the merchant's country and local laws as well as Visa/MC's policy for the country.

For example, in the US merchants ARE allowed to add surcharges per a Nov 2012 court decision. However, there is a specific process that they must follow and there are restrictions on the amount of the surcharge. However, some individual US states may prohibit surcharges for merchants under their jurisdiction. (see: http://usa.visa.com/merchants/merchant-support/merchant-surcharging.jsp)

[CNXBKKMAN]

I am not a retailer but why should they recieve 97% of the cost because a customer pays with a credit card? I think its worse with Amex. I think its pretty honest and upfront if a retailer wants the full selling price and they say you have to pay an extra 3% or whatever. The retailer is not getting any extra money only the CC company.

Best thing is for the retailer to up the prices with loads of blurb saying discount if paid with cash and then the credit card customer wont have the % added and wont feel aggrieved. CC cost is already built into the price already.

Edited April 29, 2015 by CNXBKKMAN

[TheAppletons]

I am not a retailer but why should they recieve 97% of the cost because a customer pays with a credit card? I think its worse with Amex. I think its pretty honest and upfront if a retailer wants the full selling price and they say you have to pay an extra 3% or whatever. The retailer is not getting any extra money only the CC company.

Best thing is for the retailer to up the prices with loads of blurb saying discount if paid with cash and then the credit card customer wont have the % added and wont feel aggrieved. CC cost is already built into the price already.

Because 97% of the price (not the cost) is better than 0% of the price? If someone doesn't have the cash - but is willing to buy something on credit - then the retailer makes a sale if he accepts credit cards. If he doesn't, he doesn't make a sale.

Retailers in Thailand haven't quite figured out yet that the more difficult you make it for your customer to buy something, the less likely he is to buy it.

I agree, though, if you present it to the customer as a "cash discount" instead of a credit card surcharge, everyone is probably happier.

[pattjock]

For a big store it makes no difference if you pay by credit card or by cash. If by credit card they have to give the credit card company 3%, if by cash they have to spend money on counting the cash, package it in a manner the bank require, safe transportation to the bank and bank handling fees for cash.

For a small store it will make a 3% difference in profit. If they do accept cred card without adding 3% you should ask for cash rebate of 3% and pay with cash to save some money.

Same in western countries, it's often possible to get a cash discount in smaller stores.

[South]

If a bank charges 3% to use a card then the cost will get passed on - either directly or indirectly.

[Aussieroaming]

We have rarely been asked to pay an additional surcharge for credit card purchases here

[TallGuyJohninBKK]

The bigger issue is people's home country banks often adding a 3% or more foreign currency/foreign transaction fee to everything you do outside your home country, ATM withdrawal or purchase.

From my experience it doesn't make much difference whether your credit card payment is in the local currency or converted to your home currency. If you convert you get a poor exchange rate, and if you pay with the local currency they slap on the foreign transaction rate.

So all in all using credit cards can cost you about 6 %.

Best to leave them at home and use them just for emergencies.

Well, using a credit card in Thailand COULD cost you an extra 6% in fees. But it certainly doesn't have to -- if you're smart about it.

1. use a home country credit card that doesn't charge any foreign currency conversion fee for purchases abroad.

2. make sure the Thai merchants you buy from are ringing up the transaction in Thai baht, which will get the normal VISA or MC network exchange rates. And don't accept it if they try to ring it up in your home country's currency at a terrible exchange rate, which is known as DCC (Dynamic Currency Conversion).

3. don't do business with Thai merchants who want to try to add-on their own extra surcharge for using a credit card vs cash, like the 3% amount the OP asked about.

Do those things, and you can responsibly use a foreign credit card here without getting gouged.

[Pib]

There is no blanket rule by Visa/MC that prevents merchants adding surcharges. Whether it is allowed or not will depend on the merchant's country and local laws as well as Visa/MC's policy for the country.

For example, in the US merchants ARE allowed to add surcharges per a Nov 2012 court decision. However, there is a specific process that they must follow and there are restrictions on the amount of the surcharge. However, some individual US states may prohibit surcharges for merchants under their jurisdiction. (see: http://usa.visa.com/merchants/merchant-support/merchant-surcharging.jsp)

^^^^ What vaultdweller said. The card networks frown on the surcharge practice just as they frown on a DCC transaction, but both are legal and not forbidden by the card networks.

But under Pib's Law I refuse to do business with merchants who apply a surcharge or will only do a DCC transaction unless I absolutely have to. A DCC is simply price gouging a foreign customer and a surcharge impacts all customers. Yes, yes, I know merchants must pay a few percent fee for each card transaction...but I figure they already have that adjusted into their price even for a DCC transaction and probably when they do a surcharge also. Just greedy merchants they are.

[hugocnx]

Worst of all is Air Asia. You can do an online booking, but you can only do that with credit card. Then they charge you 6% something. Only way to avoid this is to pay at an Air Asia booth. Might as well book there.

[bendejo]

I haven't tried in a while, but I once stopped at an AA office (actually, a small alcove in a mall) and was told there was a fee for using the office, as opposed to buying online.

I've always been annoyed by this, they should just do all the math and present the total as the price, with the only additional charges for tangible things, like extra luggage etc.

[wooloomooloo]

Worst of all is Air Asia. You can do an online booking, but you can only do that with credit card. Then they charge you 6% something. Only way to avoid this is to pay at an Air Asia booth. Might as well book there.

Doesn't have to be like that. I live in the UK but have a Bangkok Bank account and leave a reasonable balance on my account, particularly for paying AirAsia fares.

I can book domestic Thai AirAsia flights online from the UK to debit my BB account and the charge is a flat 40 baht for both tickets. If I settled with a UK debit or credit card then the fee is a whopping £16 each. That's £32 for my wife and I for a return domestic flight and invariably more than the price of a one-way flight. No way.

Edited April 29, 2015 by wooloomooloo

[Fab5BKK]

Another point to consider: when a customer buys using a card, the shop owner has to put the sale in his books (and then becomes recorded revenue). When it's cash payment, it could be different...

:-)

[konying]

I know only about Visa, M/C and Amex. It's strictly in violation of the store's merchant agreement. Of course the credit card issuers don't want them doing that and discouraging use. They would lose their merchant status if caught so if you want to go to the trouble of reporting them including sending in documentation go ahead. It isn't worth the hassle to me.

If merchants lose their ability to take those cards their sales plummet so it's a two way street. The CC companies are very strict about this and the merchant pays the fee to make the sale.

Up to you.

Merchant would never lose anything.

First Master or Visa will contact the bank, bank then will contact the merchant.

Merchant states there is price for cash and price for credit cards, case closed.

Do you honestly think bank or master card willing to lose a customer? as a merchant, we pay 3% , plus in many cases annual fee as well.

All car dealers in Australia put on a surcharge if you want to pay with a card.

Cheap shops set minimums to purchase or extra % or set amount is added to the total.

Electronics and IT sellers offer discounts for cash payments, which happen to be about the amount of master or visa charge.

The only ones who do not set limits or charge extra are large supermarket chains, because they get a discounted rate of like 0.5-1% charge for every transaction, plus other promotions from the banks and master/visa.

[konying]

Another point to consider: when a customer buys using a card, the shop owner has to put the sale in his books (and then becomes recorded revenue). When it's cash payment, it could be different...

:-)

Not the only or main reason.

With Thai banks, on top of credit card charge, bank withholds some tax on every transaction as well, so 3% turns more into 5 at least

Then accounting also gets more complicated, because monthly statements require passbook update and transaction receipt, should this transaction be refunded or partially refunded later, books do not add up and more headaches.

Easier for company's with inhouse accountants, but big headache for smaller businesses.

[wooloomooloo]

Well, using a credit card in Thailand COULD cost you an extra 6% in fees. But it certainly doesn't have to -- if you're smart about it.

1. use a home country credit card that doesn't charge any foreign currency conversion fee for purchases abroad.

2. make sure the Thai merchants you buy from are ringing up the transaction in Thai baht, which will get the normal VISA or MC network exchange rates. And don't accept it if they try to ring it up in your home country's currency at a terrible exchange rate, which is known as DCC (Dynamic Currency Conversion).

3. don't do business with Thai merchants who want to try to add-on their own extra surcharge for using a credit card vs cash, like the 3% amount the OP asked about.

Do those things, and you can responsibly use a foreign credit card here without getting gouged.

Excellent post, John.

I recently applied for the Halifax Clarity Card (UK) and gave it a run out to Europe for a long weekend and used it often [no transaction charges at all]. Used it in shops and at the ATMs and was extremely happy with my month-end statement. No charges at ATMs or the shops. Though, took care at ATMs as providers f/x rate defaults to their own unfavourable rate unless you hit 'no' which then provides you the MC f/x rate. Cheeky sods.

A small point is that I wouldn't use this card in a Thai ATM as I would be hit with 180 baht charge per transaction, regardless.

My wife and I take holiday to LOS this weekend and will go to local Bangkok Bank branch to draw money on my credit card when required to avoid ATM charge. I will continue to be careful of accepting some random f/x rate. Saying that, I would only draw funds in my wife's local BB branch as we are familiar with the staff due to my having an account at their branch for the last few years and I don't expect that they'd pull a fast one. It wouldn't be the done thing, but I remain diligent, nonetheless.

This is, without a doubt, the best credit card for foreign travel that I possess, as long as my eyes are open.

The MasterCard f/x rate is extremely competitive, as long as it is applied correctly. Just be careful and research.

https://www.mastercard.com/global/currencyconversion/

[CaptHaddock]

The OP has it all backwards. The merchant should charge the 3% surcharge for credit card use. That's the only fair way. Otherwise cash payers are subsidizing the credit card users. And that's the reason that the banks in the US originally got a law against the surcharge for credit card use, because eliminating the surcharge gave them a big, and grossly unfair, advantage.

[Pib]

Well, using a credit card in Thailand COULD cost you an extra 6% in fees. But it certainly doesn't have to -- if you're smart about it.

1. use a home country credit card that doesn't charge any foreign currency conversion fee for purchases abroad.

2. make sure the Thai merchants you buy from are ringing up the transaction in Thai baht, which will get the normal VISA or MC network exchange rates. And don't accept it if they try to ring it up in your home country's currency at a terrible exchange rate, which is known as DCC (Dynamic Currency Conversion).

3. don't do business with Thai merchants who want to try to add-on their own extra surcharge for using a credit card vs cash, like the 3% amount the OP asked about.

Do those things, and you can responsibly use a foreign credit card here without getting gouged.

Excellent post, John.

I recently applied for the Halifax Clarity Card (UK) and gave it a run out to Europe for a long weekend and used it often [no transaction charges at all]. Used it in shops and at the ATMs and was extremely happy with my month-end statement. No charges at ATMs or the shops. Though, took care at ATMs as providers f/x rate defaults to their own unfavourable rate unless you hit 'no' which then provides you the MC f/x rate. Cheeky sods.

A small point is that I wouldn't use this card in a Thai ATM as I would be hit with 180 baht charge per transaction, regardless.

My wife and I take holiday to LOS this weekend and will go to local Bangkok Bank branch to draw money on my credit card when required to avoid ATM charge. I will continue to be careful of accepting some random f/x rate. Saying that, I would only draw funds in my wife's local BB branch as we are familiar with the staff due to my having an account at their branch for the last few years and I don't expect that they'd pull a fast one. It wouldn't be the done thing, but I remain diligent, nonetheless.

This is, without a doubt, the best credit card for foreign travel that I possess, as long as my eyes are open.

The MasterCard f/x rate is extremely competitive, as long as it is applied correctly. Just be careful and research.

https://www.mastercard.com/global/currencyconversion/

Be sure to keep in mind that while the Clarity card apparently does not charge a foreign transaction or cash advance fee (like my Pentagon Federal Credit Union credit cards) interest does start accumulating from day one unlike for purchases. To avoid this interest charge you need to be able to pay off the cash advance immediately or maybe prepay/put a credit on your balance. I use my PenFed credit cards all the time to do counter cash advances at Thai banks because I can get more per day than with my no foreign transaction fee debit cards...I then logon to my PenFed account and immediately pay off the cash advance. Yeap, don't forget the interest will start accumulating from day one.

[CNXBKKMAN]

I am not a retailer but why should they recieve 97% of the cost because a customer pays with a credit card? I think its worse with Amex. I think its pretty honest and upfront if a retailer wants the full selling price and they say you have to pay an extra 3% or whatever. The retailer is not getting any extra money only the CC company.

Best thing is for the retailer to up the prices with loads of blurb saying discount if paid with cash and then the credit card customer wont have the % added and wont feel aggrieved. CC cost is already built into the price already.

Because 97% of the price (not the cost) is better than 0% of the price? If someone doesn't have the cash - but is willing to buy something on credit - then the retailer makes a sale if he accepts credit cards. If he doesn't, he doesn't make a sale.

Retailers in Thailand haven't quite figured out yet that the more difficult you make it for your customer to buy something, the less likely he is to buy it.

I agree, though, if you present it to the customer as a "cash discount" instead of a credit card surcharge, everyone is probably happier.

This works the other way too. If someone doesn't have two 1000 baht to rub together but has a credit card they may still be happy to pay the cost +3%. They don't have the cash to get the normal price or haggle for a cash discount. Not all credit card users are financially savvy many will be the opposite.

[kkerry]

Worst of all is Air Asia. You can do an online booking, but you can only do that with credit card. Then they charge you 6% something. Only way to avoid this is to pay at an Air Asia booth. Might as well book there.

If you're in Thailand when making your Air Asia online booking you have the option to pay in cash at Seven Eleven. For bookings less than 30,000 baht the fee is only 30 baht.

http://www.thaivisa.com/forum/topic/817078-air-asia-charges-this-should-not-be-permitted/?p=9300474

[kannot]

if they took cards id offer to pay cash with a 2% discount

[rak sa_ngop]

The bigger issue is people's home country banks often adding a 3% or more foreign currency/foreign transaction fee to everything you do outside your home country, ATM withdrawal or purchase.

From my experience it doesn't make much difference whether your credit card payment is in the local currency or converted to your home currency. If you convert you get a poor exchange rate, and if you pay with the local currency they slap on the foreign transaction rate.

So all in all using credit cards can cost you about 6 %.

Best to leave them at home and use them just for emergencies.

Well, using a credit card in Thailand COULD cost you an extra 6% in fees. But it certainly doesn't have to -- if you're smart about it.

1. use a home country credit card that doesn't charge any foreign currency conversion fee for purchases abroad.

My Natwest Mastercard charges a 'Non Sterling Transaction Fee'. So there is no advantage in paying in the local currency (any more).