Credit Card Traps For Overseas Traveler

With every item you purchase abroad your credit card company is extracting a secret fee. You will have to pay a conversion to foreign currency fee every time you use your credit card outside of the United States. Ordinarily, you probably would not be aware of these secret fees until you got home to your statement.

For instance, if you buy a pair of slacks in Rome and the cost of those slacks is $300, they may show up on your statement as $309 because your card issuer charged a two percent “conversion” or “transaction” fee, and Visa, Master Card, AMEX, or whatever card you hold charged another one percent. Recent regulations have been passed requiring your credit card issuer to make you aware of these fees, but they are still, usually, buried in the fine print.

There are ways to avoid excesses of these charges.

o Make as many purchases as possible, pertaining to your trip, from home. Purchase accommodations, airfare, and car rental before you leave. You will save yourself the “conversion” and “transaction” fees on these items.

o While overseas, use debit cards to make as many purchases as possible. This will eliminate those “conversion” and “transaction” fees, also.

o All major card companies now offer stored-value cards. You can use these cards abroad instead of your card. There is usually an up-front fee for these cards, but they will save you the big conversion fees.

o Do not convert your currency at the airport or the hotel where you are staying. There are big charges for this service at these places.

o Contrary to popular opinion, avoid traveler’s checks. Traveler’s checks charge a rate of seven percent at point of purchase plus additional conversion fees. Traveler’s checks will be almost double in cost compared to using your card.

o Double-check all the information pertaining to the use of your card abroad. Go to your credit card issuer’s website and research their policies, limitations, and requirements for use of your credit card overseas. If “conversion” or “transaction” fees are not listed on the website, call customer service and ask about these traveling fees. They will have to tell you when you ask.

Your credit card is a good tool when traveling overseas. Just be aware that there are fees connected to the “privilege” of using your credit card when abroad. You may find these fees acceptable to you in exchange for the convenience.