A consumer who uses a credit card from the USA in a foreign country will usually have to pay a two or three percent transaction fee. Before this particular time many credit card companies did not clearly explain these fees in their terms and conditions.
Many people received a notice of a class action lawsuit settlement regarding these fees earlier this year.Credit card companies are required to clearly state foreign and international transaction charges on credit card applications, since the lawsuit has been settled.
You will most likely find that your credit card company charges three percent for all international transactions if you get in touch with their customer service. With the US dollar sagging, paying an extra three percent on every purchase can really hurt the wallet, but fortunately, there are a few ways to avoid these charges.
Your own bank will often give a significantly better exchange rate for foreign currency than what you may receive at a foreign currency exchange booth.
When a debit card is used as a credit card, there may be some risks, but ATM withdrawals are free of foreign transaction charges as a general rule. A credit card is easier to protect against fraud than a debit when making purchases abroad, so this is why it would be better to use a credit card abroad. If some unscrupulous merchant overcharges you or uses you card fraudulently you can contest it and receive a refund. When a debit card is used in a fraudulent manner, it will mean an empty bank account and it will take longer to see any refunds on the stolen funds.
It seems that the best way to pay no international transaction fees is through credit card use of the ones that charge no fees; these no fee credit cards give you security without the added espense.
ATM transactions carry a small fee for each transaction, so it is good to know how much you will spend, this is as great for day to day life and also when on vacation. Very few people have a very good idea how much cash they'll require while traveling and unless you're the exception and have a fairly precise budget it's difficult to extract the correct amount in a single transaction. You may at many times find it difficult to locate a cash machine in many foreign countries, but you must not take the chance to draw out an excessive amount of cash or you could be at risk for theft. Converting funds back to your local currency also carries fees as well as the fees you paid to convert to the foreign currency.
You can use the safe alternative of traveler's checks instead of cash, but there is a fee charged when they are purchased and they are not accepted everywhere.
When applying for the credit card you believe will not charge any additional fees for foreign purchases be sure you study the terms and conditions carefully to be absolutely sure you are getting the right card. Check the terms before using the card and be sure you can pay off the balance quickly if it has a high interest rate...or you're simply paying fees a different way.
Alisdair Cosgrove has been writing finance articles for many years and can find more of his work at the UK site CreditCardsWeb.co.uk, offering low interest credit cards for UK residents and also a great selection of free credit cards. Visit today to read more of Alisdair's great credit card articles including credit card securirty
Please Rate this Article
Click the XML Icon Above to Receive Credit Articles Via RSS!
