Visa card foreign exchange charge
Last year when we travelled to Japan we hired a car and paid by credit card, as usual. When we saw the car that we booked, we found it’s too big and unenvironmental for our needs compared to the other ultra mini Japanese cars on the roads. We decided to change to a smaller car. The car hire company refunded the first car hire credit card payment and then charged us for the second smaller car.
When we received our credit card statement, we quickly noted that the Hong Kong dollar equivalent for the credit card credit entry for the refund was about 5% less than the credit card debit entry for the car hire, even though the Japanese Yen value was the same. We called the bank to query and as expected, found out that the 5% is the buy/sell foreign exchange rate difference. We were literally paying money for the refund process but it wasn’t apparent when we looked at all our credit card receipts in Japanese Yen.
Luckily, the bank did not hesitate in making the exchange rate adjustment and refunded us the difference without any hassle.
So here is a lesson to learn: beware of using credit card to refund because you might be charged inadvertently. If you do use your credit card for any foreign exchange refund, make sure you check your credit card statement afterwards – for these unexpected charges.