Tuesday, February 21, 2006

India trip: $5 ATM fee rip-off

During my India trip, Priya and I spent about 3 days in Trivandrum. By the last day, we were running out of cash. I didn't want to use my Bank of America ATM card as I was a bit afraid about the service fees. But we really needed the money; so decided we'll use an ICICI ATM. Since ICICI is supposed to be one of the best banks in India, I thought it is a much safer bet than any of the tons of other company ATMs.

After a couple of days of our return, I checked my online account and was shocked. There were two service fees; both mentioning ICICI. One for about $0.91 and another for $5. During all my previous use of ATMs in India, the service charge was $1.50. It was never $5. The worst part this time is, the ATM did not inform me of the service charge. It used to say 'there will be a $1.50 fee.. do you want to continue?'. Nothing of the sort; I punched in Rs 4000 (about $90 and few cents) and there came out the money. No notice whatsoever about any service fees. I think they should have at least informed me of the potential service charge.

A couple of days back, I called up Bank of America to try to waive or reduce the charge. The lady who answered told me that it is all stated in the policy when I opened the account. Do they expect me to read something that was given to me in 1998? I told her that at least the ATM should inform me of the service charge. She said sorry and nothing can be done. She also said the $5 was charged by my bank and not ICICI. I was cursing ICICI until then. I realized I can't do much; I just told her that it is a real rip-off and asked her to put those in any customer feedback form if she can.

Some lessons learnt for getting money oversees.
  1. Credit cards are still one of the best methods. Citibank master card charges about 3% total. It seems master card charges 2% and citi another 1% (it may be the other way; but the total is 3%). I read Master cards give some of the best exchange rates. I do see that in my credit card statements. I saw American express charging only 2%. But overall I am not fully sure amex gives a better deal with exchange rate. So overall I think credit card is still the way to go.
  2. Most banks charge 1% on the amount withdrawn and a flat service fee of $5. So unless really needed, avoid this method. If you really have to do, make a few transactions of bigger amounts. In some countries (India is not one of them) like UK, Cananda, you can use a specific banks network to avoid the fee. For bank of america, it is Barclays in UK, Scotia in Canada (Global ATM alliance). Google or check your banks website. The customer service lady told me that even if I use a Scotia bank ATM in India, I will be charged. There was one in Coimbatore which we had planned to use. BTW, if you are betting on going to the bank of america office in Madras, you will be surprised. There is no ATM there. The security person there (the office was closed that day) said BofA in Madras handles only corporate accounts these days.
  3. Convert US bills ($20 or higher) through your "local" contacts in India. I guess, by and large, this is where you get the best deal. Of course it may not be totally legitimate.
  4. I heard on Michael Finney's show on KGO, that traveler's check is no good. You don't get good exchange rates.
I wanted to try 3, but didn't carry sufficient dollar bills. I think that is
something to try out on future trips.


At 6:52 AM, Blogger Anbae said...

Hai karthick,welcome back..

Hope, u had a gud time in India except this..

Let me the first to second ur opinion abt thse planned burglaries...

I'm away from India and i don find any logic in spending about Rs.400(~8.5$) every month which is automatically cut out from my credit......(charged for transactions and ATM service ammm).Thre's no other go, i shud pick this service..

At 12:03 PM, Blogger Karthik Gurusamy said...

Hi anbae,

Yes, the trip was good. The big financial guys make a huge profit precisely thru' these surcharges. We just need to be careful, I guess.


At 3:24 PM, Anonymous Anonymous said...

Everybody is aware of the American Express Corporate Cards..Most Popoular Credit Card as delcared by them.but it is actually the worse..American Express Credit Card Service is in fact the poorest service. I can site you example:: I have got my renewal credit card after the old card got expired..after few days i got a call from American Express India ,: Sir Can you Please confirm your address so that we will send you renewal card..I may asked for 2 credit cards and nobody is aware that i have already been given the new card..Then Customer Service of AMEX is very poor..they used to give wrong information to the customers and then charge late fees ( around 4% ). Any bank takes 2 to 3 days to reverse any transaction if there is any problem..Amex India used to take around 1 month to do same..I should suggest all the companies not to use AMEX Corporate Card since the other banks provide much better service . AMEX is actually cheating the customers and making false money by giving wrong information . Infact I should say many banks used to play these tricks..Their executives keep on asking "Sir please have the credit card: its Free and u get gift voucher" but actually its a LIE .The biggest examples are SBI and AMEX...I should say be careful in dealing with them...they are making money by doing wrong things and then when customers do the same thing they use to charge heavily ..AMEX is really the worst Credit card.

At 10:11 AM, Anonymous Anish said...

Hi everyone,

Guess what i am in the same boat like everyone. I got ripoff by ICICI bank too. They charge me $5 twice for one transaction. I don't think i can do anything about it but i learned my lesson by withrawing more at one time.

There are other banks in india who will charge you twice are following:
Bank of Baroda
State bank of India
HDFC bank
and there are many others so please be aware or ask the watchmen for how much this ATM will charge if he knows.


At 5:10 PM, Blogger Vikram Das said...

Check out this link:

According to this link, if you use Capital One Financial Credit Card there is no charge. Capital One absorbs the Visa and MasterCard fee

- Vikram

At 3:51 PM, Anonymous Anonymous said...

"Withdrawals, deposits, transfers, payments and balance inquiries made at ATMs in foreign countries outside of the Global ATM Alliance will be charged a $5.00 fee. In addition, an International Transaction Fee will be charged for ATM card and check card transactions made for foreign purchases or ATM cash withdrawals in currency other than U.S. Dollars, regardless of whether or not the transaction occurred at an ATM in a country covered in the Global ATM Alliance" ---- From BOFA site. I think it's quite clear and I don't understand what's the rip-off here.

At 7:40 PM, Anonymous Anonymous said...

Just so you know, Deutsche Bank is part of the Global Alliance for ATM. As a BoA customer, if you withdraw from a DB ATM in India (there are a few in major cities), there are no fees charged at all. I always use that.

At 4:54 AM, Anonymous Anonymous said...

There is a service offered by wells fargo bank called express send service. It was really helpful for me during my last trip to India. You can transfer money to any icici account in India from your wells fargo checking account(in 1 day) for as less as $2.50

At 1:27 PM, Blogger Sriram said...

$5 dollarku ivlo periya blog post-a da vennai?

Room-la Singapore phone bill nyabagam irruka :-)

At 2:25 AM, Anonymous Anonymous said...

I find it amazing when you do SO much research to avoid a $5 fee, when you could have just planned your trip well in advance.


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