Beware of Credit Card Foreign Transaction Fees!
By Heshan Demel, CardRatings.com, Consumer Credit Researcher
Foreign exchange fees on credit cards should be of keen interest to those traveling beyond the borders of the United States. Exchange rates offered by credit cards are usually hard to beat. Of equal and perhaps greater importance, however, is the foreign transaction fee that your credit card bill might show once you have returned home from your trip. This fee, which is often a shock to cardholders, has been increasing as of late. So cardholders that travel overseas extensively need to be aware of foreign transaction fees.
Many travelers now rely on credit cards to pay for overseas travel and purchases. For many consumers, credit cards are easier to keep up with than traveler's checks and they're almost universally accepted now.
Foreign transaction fees charged by credit card issuers will mean you may pay a little extra for that umbrella drink in the Caribbean or that Parisian pastry.
Virtually every credit card assesses an international transaction fee for purchases done outside the 50 states, and that could even include U.S. territories like Puerto Rico and the U. S. Virgin Islands. Visa and MasterCard charge a 1% processing fee and most card-issuing banks add additional fees as well (on top of the 1% fee levied by MasterCard/Visa).
This fee is generally a percentage of the U.S. Dollar value of the transaction. So, even if you paid 100 Euros for a meal that was actually $125.00 (U.S. Dollars), the foreign transaction fees will be assessed on the $125.00 amount.
A March 2007 survey of credit card issuers by CardRatings.com revealed the following foreign transaction fees:
American Express - 2%
Bank of America - 3%
Chase - 3%
Citi Bank - 3%
Washington Mutual - 1%
Wells Fargo - 3%
Capital One - No Foreign Transaction Fee
Discover - Rarely accepted overseas so not part of this list
Despite fee hikes in the past year or so, credit cards are often still the most cost effective payment method for overseas travel, but you should consider fees when planning your trip and budget accordingly.
Update: You maybe entitled to a refund of any Foreign Transaction Fees imposed between Feb 1, 2006 and November 08, 2006. Please refer to www.ccfsettlement.com.
Bon voyage!
Heshan Demel- Heshan joined the CardRatings.com family in January 07 but has supported them for many years due to his close friendship with its founder. He has a bachelor's degree in finance from Ouachita Baptist University in Arkadelphia, Arkansas and a Master's Degree in Business Administration (MBA) from the University of Arkansas at Little Rock, Arkansas. He has over 9 years of banking experience with Regions Bank where he was a loan analyst. He is a member of the Arkansas Young Professionals Network and enjoys ballroom dancing, travel, and entertaining.
We welcome your comments about credit card issues in our popular credit forum!
CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
Foreign exchange fees on credit cards should be of keen interest to those traveling beyond the borders of the United States. Exchange rates offered by credit cards are usually hard to beat. Of equal and perhaps greater importance, however, is the foreign transaction fee that your credit card bill might show once you have returned home from your trip. This fee, which is often a shock to cardholders, has been increasing as of late. So cardholders that travel overseas extensively need to be aware of foreign transaction fees.
Many travelers now rely on credit cards to pay for overseas travel and purchases. For many consumers, credit cards are easier to keep up with than traveler's checks and they're almost universally accepted now.
Foreign transaction fees charged by credit card issuers will mean you may pay a little extra for that umbrella drink in the Caribbean or that Parisian pastry.
Virtually every credit card assesses an international transaction fee for purchases done outside the 50 states, and that could even include U.S. territories like Puerto Rico and the U. S. Virgin Islands. Visa and MasterCard charge a 1% processing fee and most card-issuing banks add additional fees as well (on top of the 1% fee levied by MasterCard/Visa).
This fee is generally a percentage of the U.S. Dollar value of the transaction. So, even if you paid 100 Euros for a meal that was actually $125.00 (U.S. Dollars), the foreign transaction fees will be assessed on the $125.00 amount.
A March 2007 survey of credit card issuers by CardRatings.com revealed the following foreign transaction fees:
American Express - 2%
Bank of America - 3%
Chase - 3%
Citi Bank - 3%
Washington Mutual - 1%
Wells Fargo - 3%
Capital One - No Foreign Transaction Fee
Discover - Rarely accepted overseas so not part of this list
Despite fee hikes in the past year or so, credit cards are often still the most cost effective payment method for overseas travel, but you should consider fees when planning your trip and budget accordingly.
Update: You maybe entitled to a refund of any Foreign Transaction Fees imposed between Feb 1, 2006 and November 08, 2006. Please refer to www.ccfsettlement.com.
Bon voyage!
Heshan Demel- Heshan joined the CardRatings.com family in January 07 but has supported them for many years due to his close friendship with its founder. He has a bachelor's degree in finance from Ouachita Baptist University in Arkadelphia, Arkansas and a Master's Degree in Business Administration (MBA) from the University of Arkansas at Little Rock, Arkansas. He has over 9 years of banking experience with Regions Bank where he was a loan analyst. He is a member of the Arkansas Young Professionals Network and enjoys ballroom dancing, travel, and entertaining.
We welcome your comments about credit card issues in our popular credit forum!
CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
Labels: American Express, Bank of America, Capital One, Chase, Citibank, credit card fees, Discover, overseas credit card usage, Washington Mutual
posted by CardRatings.com at 7:57 AM
