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Credit Cards Are Subject To International Fees

By plrprousers | December 30, 2008

When you use a U.S. credit card abroad, most of the major card companies charge a two to three percent foreign transaction fee.

Many credit card companies did not clearly disclose or explain these fees in their terms and conditions until recent times.      

Many people received notification of a class action lawsuit settlement earlier this year, regarding these fees and when they will be charged. This important lawsuit has been settled and now credit card companies are required to state, in very clear terms, what their foreign and international transaction fees are.

You will most likely be told that your credit card company charges three percent for all international transactions when if you call their customer service representative to find out. Paying an extra three percent on every purchase can really cause the costs to add up quickly, but fortunately, there are a few ways to avoid these charges.

Your own bank will often give a significantly better exchange rate for foreign currency than you will be likely to receive at a foreign currency exchange booth.   

Even though ATM withdrawals are usually free of foreign transaction charges, using your debit card as a credit card can come with some risks.

A credit card is easier to protect from fraud than a debit card when making purchases abroad, so this is why it would be better to use a credit card at these times. When there are fraudulent charges and overcharges made on your credit card, you can contest them and receive a refund. If your debit card has been used fraudulently, you will not only be faced with an empty bank account, but you will find that it takes longer to receive any type of refund.

The only way to avoid paying international transaction fees, seems to be a credit card that does not charge these fees, and with these no fee credit cards you get the security provided by a credit card without any added expenses.

It pays to know how much you will be spending, even in your day-to-day life, but it’s even more important when you are on vacation, ATM transactions usually call for a small transaction fee. Few people can tell exactly how much cash they will require while traveling, and unless you have a very precise budget, it can be difficult to withdraw the correct amount in one single transaction. It can also be difficult to find a cash machine in many countries, but you have to be careful to not withdraw an excessive amount of cash, so you will not be at risk for theft.

You have to pay fees to convert to foreign currency and then you also have to pay fees to convert back to your local currency.

There is a fee to purchase traveler’s checks, but they are not accepted in some areas, however, they do offer a secure alternative to cash, because they can be replaced if lost or stolen.

Make sure you know what the terms and conditions are on a credit card you have applied for, if you had been under the impression that it charges no additional credit card fees for foreign purchases.

If the card has a high rate of interest, be sure of the terms, to know whether you can pay off the balance quickly, so you will not have to pay extra fees of a different sort.

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