Credit card issuers are notorious for charging their customers extra fees, either for bad credit behavior or, well, just because they think they can get away with it.
In recent years, however, Congress has passed a number of laws that make it more difficult for issuers to charge hidden fees, either by banning them outright or by making banks give their customers the choice to “opt in” to accept the fees.
But one practice the federal government hasn’t curbed is the use of foreign transaction fees – an extra charge credit card companies impose when one of their cards is used to make an international purchase in person or online.
Here’s how foreign transaction fees work:
The credit card processor from the country in which you made the purchase must receive the funds in its local currency. When your credit card company converts U.S. dollars into another currency, it routinely charges between 1% and 3% of the purchase or service price.
If you travel a lot overseas, either for business or pleasure, those fees can quickly add up.
Fortunately, in the past two years or so, these fees have slowly started to disappear. Many card issuers now offer several credit cards that don’t impose these fees, while at least two issuers have done away with them altogether.
Capital One was the first company to ditch foreign transaction fees on all of its cards in early 2011.
It was followed in November 2011 by Discover.
Several other banks waive foreign transaction fees on several of their cards. Here’s a selected list:
- Platinum and Centurion cards
Bank of America:
- BankAmericard Travel Rewards
- BankAmericard Privileges
- WorldPoints Travel Rewards for Business
- ThankYou Premier and ThankYou Prestige cards
J.P. Morgan Chase:
- J.P. Morgan Select Card
- J.P. Morgan Palladium Card
- Chase Priority Club Select Visa Card
- Chase Sapphire Preferred
- Ink Bold for small business Continental Airlines Presidential Plus Card
- Hyatt Gold Passport Card
- Marriott Rewards Premier Credit Card
- British Airways Visa Signature Card
- United Mileage Plus Club Visa Card
So, if you travel a lot overseas, there’s no longer a reason to get dinged with these fees. Just switch to one of the growing number of cards that don’t charge them.
However, beware that a number of these cards are aimed at frequent travelers and charge annual fees.
Always make sure you read the fine print before selecting the card that’s right for you.
Find several of these cards and more when you compare credit card offers in our database.
Do you own one of these credit cards? Or have you been hit with foreign transaction fees? Tell us your story below in the Comments box.