Most Credit Card Companies Charge Foreign Transaction Fees
Nearly every major U.S. credit card company, except possibly one, will charge a two to three percent foreign transaction fee, if your credit card is used internationally.
Not until recent years, many credit card companies did not clearly explain these international fees in their terms and conditions.
Consequently, because of this, many people received notice of a class action lawsuit settlement concerning these fees earlier this year. Credit card companies must clearly inform their applicants of all international transaction charges, because 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.
Foreign currency exchange rates from your bank can often offer you a better deal than what you will get at a foreign currency exchange booth.
When a debit card is used as a credit card, there could be some risks involved, but ATM withdrawals are free of foreign transaction charges as a general rule.
A credit card provides much better fraud protection than a debit card, so for this reason using a debit card abroad to make purchases can be risky. 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.
It seems that the best way for you to keep from paying international transaction fees is through the use of the credit cards that charge no fees; these no fee credit cards give you security without the added expense.
ATM transactions charge a small fee each time, so you can know how much you will spend; this is as great for day to day life as when you are on vacation. Unless you are on a very exacting budget, it is difficult to judge how much to withdraw in one ATM transaction because most people cannot tell precisely how much cash they will need while traveling. 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 will find that you have to pay a fee to convert funds back to your local currency as well as the fees you had to pay to convert to foreign currency.
Travelers checks are a safe alternative to cash, however, they are not accepted everywhere and there is a fee to purchase them.
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 fees for foreign purchases. Check the terms before using the card and be sure you can pay off the balance quickly, if it has a high interest rate, otherwise youre simply paying fees a different way.
Alisdair Cosgrove is a freelance writer specializing in personal finance. You can read more of his work at JSNet Credit Cards for best credit cards and also offers a comprehensive list of low rate credit cards.
