Foreign Transaction Fees for Credit Cards
Will You Be Affected By Foreign Transaction Fees?
Nowadays, many Visa and MasterCard issuers are choosing to charge foreign transaction fees for purchases that are made outside of the United States. The question is, why would credit card companies choose to charge this fee and how will it affect you? We’ve got the answers.
Why?
Why would credit card companies charge foreign transaction fees for purchases made outside of the U.S.? It’s not just so they can make more money. Most foreign transaction fees are implemented so the credit card companies can offset the costs of doing business overseas. For example, there is more risk when conducting overseas transactions, and while the credit card company can’t charge a higher interest rate for overseas purchases, they can implement foreign transaction fees.
How to Avoid It
If you don’t like the idea of paying foreign transaction fees, you’ll want to use an American Express or a Discover card for your overseas purchases. Just make sure those credit cards are accepted in the places you intend to do business. Since Discover Card and American Express don’t currently charge foreign transaction fees, you should be in the clear.
Comments
American Express charges 2% foreign transaction fee as of 27 February 2006
Posted by: Debra | February 27, 2006 1:27 PM
The information you posted about American Express not charging a foreign transaction fee is simply NOT TRUE. After reading your post I called Am.Ex. to verify this with the intent to apply for their Rewards credit card and was informed that they too charge 3% on all foreign purchases.
This is not the first time I've read this online. CreditCard.com has also posted this false information. You need to verify this before you print it...
D.Grale
Posted by: D. Grale | April 19, 2006 4:02 PM
I currently own American express and enquired with them about the foreign transaction fees. They also charge a fee.
This fee would be in addition to the 1% fee charged by the Visa/MC.
Posted by: gv | July 21, 2006 3:01 PM
I heard that Capitol one does not charge the added foreign transaction fee.
You might also find that some credit unions will do the same.
Posted by: gv | July 21, 2006 3:03 PM