Banks and credit card companies are wonderfully inventive in thinking up new ways to charge you to use your own money. One of the classic and most annoying of these is the currency conversion or foreign transaction fee.
This is a fee charged for simply using your credit or debit card in a foreign country, and can be in addition to the exchange rate . I hate the fees and think they are unfair, and upon return from a recent cruise to Mexico we were quite surprised to see all the fees adding up on our monthly credit card statement. Citibank charged us several dollars just to use our card, each time.
I was glad to read in the New York Times that Citibank and American Express will begin to waive certain foreign transaction fees, after Chase did the same. These three companies control many more branded cards from airlines and other providers, so the impact is big.
Smart travelers know, if you travel abroad, you can simply use your credit card for a transaction and receive the benefit of the bank’s currency conversion rate when the transaction is processed. But just because they can, they add an additional fee amount or percentage to each transaction. Also, the best way to get local currency, and pay the lowest exchange rate, is also to use your ATM card in a local ATM to withdraw local currency from your US bank account or credit card account. The foreign currency and foreign exchange fee can negate the exchange rate savings and just add to confusion, so I am glad to see them start to disappear.
While we’re on the subject of traveling abroad and using your credit or debit cards, here are a few key tips we’ve learned to prevent problems.
Call your issuer in advance
Card companies have rigorous security procedures and may decline sudden charges from a foreign country. Simply contact customer service before your trip and let them know of your plans.
Change your PIN to numbers only
Some foreign ATM machines have only numeric key pads and it can be almost impossible to translate a PIN code that includes letters. Also do you know the PIN for your credit cards? This can allow you to access funds, even in an emergency or if other cards don’t work. Check with your issuer to confirm or obtain a PIN.
Check about chip-PIN cards
Many countries now use debit and credit cards with a chip embedded as an extra layer of security. Check with your card issuer to see if they offer such cards for international travelers. Check with your hotel or other local sources to see if chip-PIN cards are necessary for that area.
Ron Lieber “More Cards Waive Foreign Exchange Fees” The New York Times via nytimes.com
More from this contributor:
Basic Tax Tips For Independent Contractors and Freelance Workers
What Does A Cheap Euro Mean For The Rest of The World
How To Choose The Best Mobile Phone