Credit Card Foreign Currency Transaction Fees

Would you use a credit card that added 1-3% off the top to every purchase you made? Sadly for the last year or so that’s exactly what you may have been doing when traveling outside the country or purchasing from foreign retailers like Amazon.co.uk.

Many guide books still suggest using credit cards to get the best exchange rates. Sadly this is no longer true. In the last year Visa, Mastercard, and Amex have all started charging fees of 1%-3% on top of all purchases in foreign currencies. 1% seems to be the minimum ,but because these fees vary widely from one card to the next, it pays to do your homework before traveling.

Among the cards in my wallet, my AAdvantage Mastercard charges 3%. The cards from my credit union and USAA only charge 1%. Surprisingly my Paypal Mastercard from Washington Mutual also only charges 1%. In general, the special features cards like this one or the airline miles cards charge more.

Before you leave on your next out of town trip, call each of the credit card companies and ask them, “What’s the fee for foreign currency transactions?” Most customer service representatives should be able to answer this immediately. Then move the cards with the lower fees to the front of your wallet, and move the ones with the high fees to the back or, better yet, leave them at home.

This entry was posted on Tuesday, August 1st, 2006 at 5:37 AM and is filed under Travel. You can follow any responses to this entry through the Atom feed. You can make a comment, Digg this story, or trackback from your own site.