Here’s an interesting little chart I came across courtesy of the Gadling Traveler’s blog (seems like a useful read, by the way)  It details the fees you’ll pay (or won’t pay) when using your US credit cards in the Philippines to make Philippine Peso-denominated purchases.

A lot of people like living here in the Philippines and keeping their US credit cards.  I do too. (using Philippine-issued credit cards is a big gamble, perhaps I’ll write more about that soon as well).  But I don’t use my US credit cards unless I need to.  I pay cash whenever possible. 

The main reason for that is that there is always a charge to use your credit card … in the US or in the Philippines.  Most people think that credit card use in the US is free … because merchant’s credit card agreements 9and many state laws) prohibit a merchant charging two prices for an item … one for cash and one for credit … it seems as if you are using your credit card for fee.  But make no mistake, the 5% or more “hit” that a merchant has to pay for each charge is coming from your pocket one way or another.  It might be ore correct to say that in the US we pay a 5% surcharge to pay cash … because that’s a ballpark figure that prices are marked up to cover credit card costs … but either way you look at it, you pay.

The charges in the chart are the non-hidden charges.  The 1% international use fee that Visa and Mastercharge impose on all transaction, plus additional charges that the credit card issuing companies may or may not impose.  There’s quite a spread between card issuing banks and organizations, so if you use a card often it’s well worth getting one with lower fees.

Here in the Philippines, although it annoyed the dickens out of  a lot of foreigners, until last year things were much more honest.  Merchants typically charged one price for an item and then tacked on a surcharge for credit card use.  This gave the buyer the true facts and s/he could make an educated decision.  Last year, however, the Philippines passed a law that made it illegal for a merchant to charge separate cash and credit card prices.  I still see an occasional merchant offering the two-tier pricing but this is going away rapidly as the law gets better known and better enforced. 

The more things get changed by “government regulation” to “help” the consumer the more the consumer pays.

Buy wisely.

Popularity: 1% [?]