If you travel with a Visa, MasterCard, American Express, or other credit card, watch out when charging purchases overseas.
The reason: Most U.S. and Canadian credit-card companies are now tacking an extra 2% to 5% fee on international transactions.
This is not a currency-exchange commission, because the Visa/MasterCard clearinghouse has already taken its commission (currently 1%) when converting your transaction from foreign currency into U.S. or Canadian dollars. Instead, it's just another way for the credit-card issuer to squeeze extra profits out of customers who may not be aware of the added fees.
More recently, the Washington Post reported that Providian National Bank is adding 4% to purchases in currencies other than U.S. dollars. Chase has announced a 2% surcharge. American Express, which isn't affiliated with Visa or MasterCard, has doubled its charge for U.S. cardholders from 1% to 2%.
How to avoid surcharges
·Don't use your Visa or MasterCard overseas until you've questioned your card's issuer about fees added to foreign-currency transactions. (Check before each trip, because policies may change on short notice.)
·If your credit-card company is one of the offenders, cancel your account--and tell them why you're switching to a different MasterCard or Visa issuer.
·If you have an American Express account, use your card only when absolutely necessary.
·In addition to surcharges on credit-card transactions, some banks are now charging hidden fees of several percentage points on foreign-currency ATM transactions. So, if you thought your ATM card was a safe haven from credit-card surcharges, think again-- before withdrawing cash abroad.
·Two major U.S. credit-card companies, Capital One and MBNA, weren't charging "conversion fees" at last report. (But check before using their cards, since policies can change at any time.) USAA is another option for U.S. military or National Guard personnel, retirees, and dependents.