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Nearly all credit card companies in the USA, except one, will charge a two to three percent foreign transaction fee if your card is used abroad. Many credit card companies did not clearly disclose these fees in their terms and conditions until this recent time. Consequently, many people received a notice of a class action lawsuit settlement in regards to 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. If you do not know how much your current credit card company charges for international transactions, contact customer service to find out most will inform you that the fee is three percent. It can be very expensive on the purse to pay an extra three percent on every purchase, but these charges can be avoided. 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. While ATM withdrawals are generally free of foreign transaction charges, using your debit card as a credit card comes with some risks. 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. When there are fraudulent charges and overcharges made on your credit card you can contest them a receive a refund. If, on the other hand, you debit card was fraudulently used, you will not only be faced with a depleted bank account, but it often takes a great deal longer to get your money returned. The only way to pay no international transaction fees seems to be to use a credit card that does not charge these fees and with these no fee credit cards you get the security provided by a credit card without added expenses. It pays to know how much you'll spend; this is great for day-to-day life but it's even more important on vacation, ATM transactions carry a small fee...for each transaction. 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. Traveler’s checks are a safe alternative to cash but they are not accepted everywhere and there is a fee to purchase them. 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.
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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 rate credit cards for UK residents and also a great selection of 0% credit cards. Visit today to read more of Alisdair's great credit card articles including getting more from rewards.
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