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.      

Many people received notification of a class action lawsuit settlement earlier this year, regarding these fees and when they will be charged. Now that the lawsuit has been settled, credit card companies are now required to clearly state foreign and international transaction charges on all credit card applications.

If you want to know how much your credit card company charges for international transactions, you should contact the customer service representative and you will probably be told that the fee is three percent. 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.

The foreign currency rate you will receive from your bank may be much better than that of 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. If an unscrupulous merchant overcharged you or used your credit card in a fraudulent manner, you can easily contest the charges and receive a refund on your credit card account. When a debit card is used fraudulently, it will make your bank account disappear and it will be very slow to reappear.

The no fee credit cards offer the best way to refrain from paying international transaction fees plus they give the security of a credit card with no added fees.

It pays to know how much you will be spending, even in your day-to-day life, but it's even more important when you are on vacation, ATM transactions usually call for a small transaction fee. Few people can tell exactly how much cash they will require while traveling, and unless you have a very precise budget, it can be difficult to withdraw the correct amount in one single transaction. You may at many times find it difficult to locate a cash machine in many foreign countries, but you must be careful to not take the first opportunity you have to draw out an excessive amount of cash; you could be positioning yourself for the risk of theft.

Converting funds back to your local currency will call for fees to be paid in addition to the fees you paid to convert to the foreign currency.

Traveler’s checks do offer a bit more security than cash does, they can be replaced if lost or stolen, but there is a fee to purchase them and they are not accepted in some places.

If you are applying to get a credit card that will not charge you additional credit card fees for foreign purchases, be sure you understand the terms and conditions of the credit card policy to know the card you will be getting is the one you thought it was.

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 fees a different way.