If you are someone that enjoys international travel, you may be aware that credit card companies charge additional fees for making credit card purchases outside of the United States. Visa and MasterCard, for example, charge a 1% processing fee for all foreign transactions. Then, the bank that issues the card is free to tag on additional fees, with some being as much as 3%.
For those that frequently engage in international travel, these expenses can really add up. For this reason, it is important to take a look at what a card charges before applying for it and then using it while traveling. Obviously, this shouldnt be the only aspect you consider when choosing a card and whether or not it is worth your while to apply for a new card because of the foreign transaction fees is entirely based on your personal lifestyle and needs.
According to IndexCreditCards .com, these are the fees associated with some of the more popular credit cards. These fees are in order from the lowest to the greatest fee: (Please note: check current card info for the most up to date fees)
- Capital One: 0% transaction fee and it pays the 1% fee charged by Visa and MasterCard for its customers
- Discover: 0% transaction fee, though it has limited acceptance outside of North America.
- Washington Mutual: 1%.
- Pulaski Bank: 2%.
- American Express: 2%.
- Barclays/Juniper Bank: 2% to 3%, depending on the card.
- U.S. Bancorp (U.S. Bank): 3%.
- Bank of America: 3%.
- GE Money: 3%
- Citibank: 3%.
- Chase: 3%.
- Wells Fargo: 3%.
You also need to consider the foreign exchange rate when choosing a card. Most travel experts state that travelers receive the best rate when they pay with a credit card because they receive the same rate banks charge to other banks rather than the rate they would receive if they walked into a bank as a customer. This is not, however, always the case. Call the bank before heading out on your trip in order to find out how they calculate their foreign exchange rate.
When you do make a purchase, ask that it be charged in the local currency. Otherwise, you are giving the merchant control over the exchange rate you are given. Some will wait until the rate is best for them before cashing in or will use the highest rate provided in a three to four day window of time, which will add up to higher costs for you.