If you live in the twenty first century then you probably have a credit card. With the New Year unfolding in front of us 
what changes will be coming down the plastic pipes in the upcoming year?
Using your plastic card to make reservations, take trips, buy movie tickets and groceries is a common occurrence and living without a credit card would be difficult. For credit card companies and banks their job is to make money or in some cases, more money. To glean more money from people who use cards, more and more card issuers will be opting to add credit card user fees in 2010.
At the present time the contract between merchants and banks state that the merchant is to post the same price for credit card purchases as for cash transactions. Some companies, namely travel sellers, have circumvented the same price posting for cards and cash by offering discounts if paying by cash. Some airlines have added a “convenience fee” to recoup any percentages lost for online purchases.
Most recently RyanAir, who advertise guaranteed lowest fares, has added a £5 per person, per flight fee for paying by most every credit card or debit card. This means for a travelling family with four people this equates to an added £40. They do waive this fee if you pay with a MasterCard prepaid card.
Currency Exchange
When globe trotting to foreign lands, plastic is the most convenient way to navigate the exchange rates. Yes the credit cards charge fees for the exchange but it is often a better rate than by purchasing travellers checks or direct exchange.
In the last few years this has changed. Sometimes foreign merchants charge cards with US dollar amounts. The merchants charge their own exchange rates and put the dollar amounts through on your card. However, even thought the card is charged in dollar amounts the bank will charge a foreign transaction fee, plus the amount the merchant adds when calculating the dollar exchange.
Foreign Transaction Fees
Fee based cards are on the increase and the fees themselves that are being charged are on the increase. When planning your travelling arrangements check your card to confirm whether it charges a foreign transaction fees. This is different than the exchange rate. This is a fee to cover the cost of making the exchange.
While traveling the convenience of a card is often balanced out with the transaction fees employed by each company. Most card companies charge some sort of transaction fee on foreign purchases. Of the major card issuers, Capital One is the only card without a foreign transaction fee.
A summary of the major issuers and their fees are:
American Express – 2.7%
Bank of America – 3%
Chase Bank – 3%
Citibank – 3%
Wells Fargo – 3%
Discover – 2%
Credit card offers are a dynamic beast and an ever changing field of fees and charges seem to be unfolding every month. Check the information relative to your card and update and consider all fees before using or applying for a card.
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