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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. Before this particular time many credit card companies did not clearly explain these fees in their terms and conditions. Many people received a notice of a class action lawsuit settlement regarding these fees earlier this year.Now that the lawsuit has been settled, credit card companies are required to clearly state foreign and international transaction charges on credit card applications. 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. Paying an extra three percent on every purchase can really be hard, however, there are some ways to avoid paying for these charges. The foreign currency rate you'll get from your bank is often significantly better than what you would get at a foreign currency exchange booth. Foreign transaction charges are generally not on ATM withdrawals, although using a debit card as a credit card has some risks. A debit card will be easier to use fraudulently when making purchase abroad than a credit card, so this can be the best reason to use a credit card there. If an unscrupulous merchant overcharged or fraudulently used your credit card, you can easily contest the charges and get a refund. When a debit card is used in a fraudulent manner, it will mean an empty bank account and it will take longer to see any refunds on the stolen funds. The no fee credit cards offer the best way to avoid paying international transaction fees plus they give the security of a credit card with no added fees. 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. Unless you are on a very exacting budget, it is difficult to be able to judge how much to withdraw in one ATM transaction and few people can tell precisely how much cash they will need while traveling. Sometimes it is hard to find a cash machine in many countries, so you have to be careful to not withdraw too large an amount to keep from being robbed. You will find that you have to pay a fee to convert funds back to your local currency as well as the fees that were paid to convert to foreign currency. There is a fee to purchase traveler’s checks, and they are not accepted everywhere, however they do offer a secure alternative to cash as they can be replaced if lost or stolen. If you are applying to get a credit card that will not charge you additional fees for foreign purchases, be sure youunderstand the terms and conditions of the credit card policy to be sure you are getting the card you think you are. 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.
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 interest free credit. Visit today to read more of Alisdair's great credit card articles including finding the best credit card for you.
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