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charder
28-05-2005, 22:47
Credit card markups. How does a person know what it will really cost?

On 4 May, my bill at a medical agency was itemized in dollars - totalling $680. They wrote the 28.9 RUB exchange rate on the invoice which converted to 19,652 RUB (correct calculation, but usual, unfriendly rate).

My AMEX statement listed the 19,652 RUB for the vendor and listed the charge at $721.23. I know there is a 2% foreign currency conversion factor, but what else is happening here?

Halyavshik
29-05-2005, 00:12
If I understand your confusion correctly, then I think the issue is that while you think it was 680, it wasn't. Your clinic lists their services in dollars but then screws you by using a very high rate. In reality, they're charging you much more. They take 680 and multiply it by a rate that's much higher than the official ruble to dollar rate. That 19652 is really much more than 680. 28.9 is at least 90 kopecks higher than the what the official rate has been up through today. And it's the 19652 that's debiting your Amex account, not the dollar amount.

Factoring in the 2%, it looks like Amex was using the CB rate (or something very close to it).

So, there's nothing going on here except your clinic using a rate that means you're paying much more than you think. To see what you'll really pay, take the ruble amount and divide it by the central bank rate. That's what they're really charging you.

To wit: They said $680 but got 19,652 rubles. Divide that not by their rate but today's rate of 28.00 and you get $700. That's what you're being charged (not including the 2% conversion fee).

Hope that helps.