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Hidden Credit Card Charges When Charging Abroad
Do you use a credit card when traveling abroad? I do. While having a stash of cash is always necessary, it's also convenient to be able to reserve rooms and pay for the occasional item using your Mastercard or Visa. Be careful though; some (if not most) credit card companies will charge you a premium for using their card in a foreign country. Mastercard and Visa, for instance, charges a 1% "currency conversion" fee for each foreign purchase. And often times the issuer will tack on additional charges -- usually 2% -- for the convenience of using their card while traveling. This brings the total charge up to 3% for each purchase. It can add up.
Bankrate.com has a handy chart that shows what sort of additional charges you can expect from major banks. Most end up hitting you with 3% on top of your total purchase price. There are a few banks, however, that go as far as waving all fees, making a foreign purchase the same as a local one. If you're traveling long term, it might be a good idea to go with one of those banks.
I'm lucky. My bank (USAA) doesn't charge any additional fees, so I only get hit with the1% conversion fee from Mastercard. [via]
Reader Comments (Page 1 of 1)
Val Aug 2nd 2007 3:03PM
Thanks for the helpful info! I just switched to Capital One because of their Automatic Refund of all ATM fees ANYWHERE! And I now know that it is the most baller of all banks because it doesn't charge any international fees! When I opened my account they said they were new to direct banking and so were providing a bunch of good incentives and rates, etc. I signed up for the 5% APY High Interest Checking Account.
Dave Aug 3rd 2007 2:38PM
I havbe not been a big fan of Capital One as I always thought of them as a substandard credit card co but I too used Capital One for my overseas use and was not charged a dime of transaction fees. One thing I found is you need to make sure they make the charge in their prevaling currency i.e. Euro, British Pound as you get a much better exchange rate through Capital One vs the merchant who converts it to USD right off the bat. If you let the merchant do the conversion you may see transaction fee from them.
ash Aug 3rd 2007 2:48PM
here is a trick the merchants may do as well, often they watch the exchange rates before they post a charge, they post it when the dollar is down they make more money!
feckineejit Aug 3rd 2007 2:57PM
THese fees are not hidden. all banks disclose these fees if customers mention they are travelling (which they should if they don't want their transactions flagged as fraudulent. This article is alarmist BS. sure capital one may refund all ATM charges, but what is the minimum balance required to avoid fees?
alba Aug 3rd 2007 3:12PM
If Capital One would only limit themselves to sending me ONE piece of junk mail per week, they could afford to waive even more fees.
Suresh Aug 3rd 2007 3:17PM
Yes, they do normally give the best exchange rates, so check with your CC company first before using abroad, but 3% per purchase isn't bad considering that 3% is not an unusual "fee" tacked on my currency exchange shops/offices. Of course, those "fees" are normally masked by their exchange rate.
Bill Aug 3rd 2007 7:48PM
I always use my Capital One card while traveling aboard since they do not charge any converson fee(s) for transactions charged in a country's local currency. One just needs to make sure the charges are in the country's local currency and not US dollars or one will be charged a fee by the local merchant.
kb Aug 6th 2007 10:40PM
Isn't USAA great? They never charge ATM fees and always return what the bank charges. Great Rates and great CD's and they have free financial advice too! When we went overseas we jsut notified them ahead of thime and had absolutey NO problems with the credit card!
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