International Transaction Fees Are Charged When Credit Cards Are Used

By Author: Alisdair Cosgrove
Total Articles: 184
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When a consumer who uses a credit card from the USA , makes a transaction in a foreign country, a transaction fee of about two or three percent will usually have to be paid.

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 early last year. This important lawsuit has been settled, and now credit card companies are required to state in very clear terms, what their foreign and international transaction fees are.

You will most likely be told that your credit card company charges three percent for all international transactions, if you call their customer service representative to find out. Paying an extra three percent on every purchase can really cause the costs to add up quickly, but fortunately, there are a few ways to avoid these charges.

Your own bank will often give a much better exchange rate for foreign currency than you will be likely to receive at a foreign currency exchange booth.

Foreign ...
... transaction charges generally, are not on ATM withdrawals, although using a debit card as a credit card can include some risks. A credit card provides much better fraud protection than a debit card, so this is the reason why using a debit card abroad to make purchases can be risky.

If a merchant is unscrupulous in his dealings and overcharges you or uses your credit card fraudulently, you can contest it 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.

Ultimately, the only way to avoid paying 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 is always good to know just how much you will be spending in your day to day life, but it is even better when you are vacationing, as ATM fees are charged for each transaction. Not many people can tell exactly how much cash they will require while traveling, and unless they have a very precise budget, it can be hard to withdraw the correct amount in one single transaction. Sometimes it is hard to find a cash machine in many countries, but you have to be careful to not withdraw too large of an amount at one time to protect yourself from being robbed.

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, because they can be replaced if lost or stolen, but there is a fee charged for their purchase and they are not accepted in some places.

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 you're simply paying added fees a different way.
Alisdair Cosgrove is a freelance writer specializing in personal finance. You can read more of his work at www.JSNet.org for credit cards and also offers a comprehensive list of credit cards with low interest rates.