The Checkout

A Traveling Tip for Credit Card Users

If you're traveling abroad this spring or summer, you should think about the credit card you plan to use. Almost all charge fees for overseas credit card purchases, but these international transaction fees vary widely among credit-card issuers, according to a recent survey by IndexCreditCards.com http://www.indexcreditcards.com, an online clearinghouse of credit-card data.

The Web site says Visa and MasterCard charge a 1% processing fee on international transactions and most card-issuing banks add their own fees on top of that.

But some don't. IndexCreditCards says Capital One imposes no fee -- and also eats up the 1% Visa or MasterCard fee. On the other hand, Bank of America, Chase, Citibank, MBNA, U.S. Bank and Wells Fargo impose a 3% international transaction fee while American Express charges 2%.

So, before you begin your journey, you may want to check your credit-card terms and plan accordingly (including the fact that Discover Card is rarely accepted overseas).

Bon Voyage.

By  |  March 30, 2006; 7:01 AM ET Consumer Tips
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Comments

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If found this quite interesting as I have used my MBNA card outside of the country with no fees. Looking online, MBNA says "Effective for accounts opened after April 30, 2006, a Transaction fee equal to 3% of the U.S. Dollar amount of any transaction made outside of the United States, or in a foreign currency. This fee will be in addition to any other applicable fee."

Of course, the exchange rate used in the transaction could differ significantly from the rate you see on the day you make the purchase. So I guess the card company can get you even without charging the "fee".

Posted by: Rob | March 30, 2006 8:57 AM

Also check with your credit union, if you can qualify for one - mine offers a Visa that does not impose foreign transaction fees. I use a Citi rewards credit card domestically, but my CU's card overseas.

Posted by: formerwashingtonian | March 30, 2006 10:21 AM

My credit union, as I discovered to my annoyance *after* I came back from Brazil, does charge foreign transaction fees. Grrrr.

Posted by: h3 | March 30, 2006 10:34 AM

Regarding the use of credit cards -

In many countries, the full credit card number is printed on the transaction receipt unlike the U.S. where only the last few digits are printed out.

Posted by: Clint | March 30, 2006 10:46 AM

Some MBNA cards already charge for foreign transactions. I found out the hard way when I bought something from amazon.co.uk this summer. The transaction fee was a separate line item. And this is a Quantum card that I've had since 1996. When I called MBNA to ask about it I discovered that it really depends on the card program and there isn't a blanket rule. I have since obtained a second MBNA card that doesn't have the fees. Reading the fine print is important but they don't always make it easy to find the fine print!

Posted by: J | March 30, 2006 11:09 AM

Major (and many not so major) cities around the world have lots of ATMs. It will generally cost less to obtain local currency from an ATM and then spend the currency than to use a credit card to make purchases--even if your bank charges a fee for using someone else's ATMs.

Posted by: ng, dc | March 30, 2006 11:45 AM

I just got back from a trip to South America and found out that both VISA Citi card (Citicorp) and Visa-Marriott Rewards (Bank one/Chase) charged 3% on all overseas transactions.
These two cards are now history for me

Posted by: Henry | March 30, 2006 1:36 PM

Rob wrote: "Of course, the exchange rate used in the transaction could differ significantly from the rate you see on the day you make the purchase. So I guess the card company can get you even without charging the "fee"."

Actually, credit cards usually offer you the best rate, as constituent banks usually settle transactions totalling millions of dollars daily, pushing the conversion rate closer to the "market" rate, which you, traveling solo, will never get.

Posted by: Jacknut | March 30, 2006 1:58 PM

Great info. as always Caroline! There is also a good recent thread about this subject on our credit forum that may be of interest to your readers:

http://creditcardperks.webgroups.biz/phpBB2/viewtopic.php?t=8429

Best Regards,
Curtis Arnold
Founder
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
curtisarnold@cardratings.com
Phone: (501) 663-0314 x3
Fax: (501) 374-8887


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Posted by: Jayaraj | March 31, 2006 12:53 AM

Gee, Henry, maybe you should have checked out your credit cards' terms for overseas purchases BEFORE you traveled?

That's OK, like I've said before, we need consumers like you to subsidize those of us who actually pay attention and look for the best deals and terms.

Posted by: The Cosmic Avenger | March 31, 2006 11:42 AM

After reading this, I e-mailed my CU and asked them if they charged a fee. The answer was no, but I sure will keep a copy of the e-mail just in case I get back from Europe this summer and find that they charged me anyway.

Posted by: WA2CHI | April 4, 2006 4:16 PM

I looked into this before a recent trip to Australia after seeing a 3% fee show up on transactions I had made before the trip (for deposits on reservations, etc.). Citibank charged a 3% currency conversion fee and American Express charges 2%. I got a credit card with Capital One specifically for this reason--they don't charge ANY currency conversion fee and they get you the best exchange rate. If you don't want to get ripped off with these extra fees, get yourself a Capital One credit card. No hassle!

Posted by: Traveler | April 11, 2006 1:24 PM

I forgot to mention that you should also make sure that the retailer charges you in the local currency of wherever you are because if they offer the "convenience" of charging you in US dollars, you will probably get ripped off in the exchange rate and/or fees.

Posted by: Traveler | April 11, 2006 1:27 PM

I discover this after seeing big fees on my Chase Card after a trip. When I called them they told me that the fees were standard, but I found this site that shows other cards do not charge the fee
http://www.travelfinances.com/Services/creditcard-conversion-fee-comparison.htm

Posted by: Chaissed | May 10, 2006 3:33 PM

I discover this after seeing big fees on my Chase Card after a trip. When I called them they told me that the fees were standard, but I found this site that shows other cards do not charge the fee
http://www.travelfinances.com/Services/creditcard-conversion-fee-comparison.htm

Posted by: Chaissed | May 10, 2006 3:34 PM

I was just wondering wouldn't that be a violation of Fair Credit Reporting Act or Equal Credit Opportunity Act to charge a fee on foreign transactions or transactions in foreign currencies? Effectively the fee causes immigrants and other people of non-US national origin to pay higher price for using credit cards the way they normally use them.

It would be interesting to hear what the Office of Currency Comptroller, the agency that regulates national banks compliance with the law, thinks on the issue.

Posted by: A Pushkin | May 23, 2006 10:03 AM

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Posted by: DbVSBrDq | August 15, 2008 6:50 AM

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