Some Foreign Credit Card Fees Can Be Avoided

When consumers who use a credit card from the USA , make a transaction in a foreign country, they will usually have to pay a two or three percent transaction fee.

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

Consequently, because of this, many people received notice of a class action lawsuit settlement concerning these fees earlier this year. Credit card companies now must clearly state foreign and international transaction charges on all of their credit card applications, since the lawsuit has been settled.

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. It can end up being quite expensive to pay an extra three percent on every purchase, but you can possibly find a way to avoid these charges.

The foreign currency rate you can receive from your bank is often significantly better than what you would get 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 debit card will be easier to use in a fraudulent manner when making purchases abroad than a credit card; this can be the best reason to use a credit card abroad. If some unscrupulous merchant overcharges you or uses your credit card fraudulently, you can contest it and receive a refund. When a debit card is used in a fraudulent manner, it will lead to an empty bank account and it will take longer for you to see any refunds on the stolen funds.

Ultimately, the only way to not pay international transaction fees, is to use a credit card which doesn't charge these fees; these no fee credit cards give you the security a credit card provides, without the annoying 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. Very few people have a very good idea how much cash they'll require while traveling; unless you're the exception and have a fairly precise budget, it's difficult to extract the correct amount in a 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.

The conversion of funds back to your own local currency carries fees as well as what you will have already paid to convert to the foreign currency.

Traveler’s checks do offer a bit more security than cash does, they can be replaced if lost or stolen, but there is a fee to purchase them and they are not accepted in some places.

If you are applying to get a credit card that will not charge you additional credit card fees for foreign purchases, be sure you understand the terms and conditions of the credit card policy to know the card you will be getting is the one you thought it was.

Check the terms of the card before using it, to assure yourself that you can pay off the balance in a hurry, if the interest rate is high, so you won’t be paying more fees in a different way.