by Brandi Savitt – updated February 6, 2013
The Cost of Traveling Abroad
Work brings me to Europe several times a year. And while any chance I get to write off sipping wine on the Rivera is a dream come true, my bank and credit card companies just love to find any sneaky excuse they can to charge me extra fees. So, if you’re planning a trip to a foreign land, here’s what you need to budget for so you have NO surprises when you go to pay your credit bill when you get home!
What is a Foreign Transaction Fee?
According to Credit Card Hub, the credit card foreign transaction (or international) fee is the combination of a fee that Master Card, Visa, American Express, etc charges to handle the transaction between the overseas merchant and your credit card issuer (eg. Chase, Citi, Bank of America), and the fee that your credit card issuer charges on top of that. Depending on the type of card, and its issuer, this fee is typically 2-3% of every purchase made!
If you’ve used your credit card recently while traveling, or even if you’ve purchased something online from a foreign company, you may have noticed this separate, hefty surprise fee on your statement. I thought this was just a new type of fee that credit cards could now pass onto their customers, but I was wrong. It’s always been there. But in the last couple of years, the credit card companies are now forced to point it out.
American Express explained to me that they’ve always charged a fee for foreign purchases, but they used to roll it into the total purchase number on the statement – essentially hiding their 2.7% foreign transaction fee from the naked eye! Luckily for us, now we can see for ourselves just how much extra we’re getting charged for the privilege of traveling and spending money abroad…
Call Your Credit Card Company Before You Travel
Before you travel to another country, call each of your credit card companies and see which of your cards has the lowest foreign transaction fee. Then add that fee into your travel budget.
If you have an American Express Platinum Card, or another premium card, your international fee may be automatically waived. But don’t rush out and apply for a premium card just to avoid the fees. Unless you travel abroad extensively, these premium cards may not be the worth the high annual fee.
…And just as a general note, while you have someone on the phone, you should always alert your card company that you will be leaving the country. This will help avoid them from freezing your card in fear that it was stolen.| Print
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