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.
We learned about this trick back a number of years ago when we received a mailing from FirstUSA, where we had a Visa account. FirstUSA announced that it would add a 2% charge to the dollar amounts reported by Visa and MasterCard for transactions converted from foreign currencies.
Cheryl, our family financier, was shocked by the announced charge and decided to do some investigation. She called First Card, a major Midwestern credit-card supplier, and learned that it added 3% to such transactions.
Next, Cheryl called USAA and Capital One. Neither of those U.S. companies added a fee at that time (although USAA now imposes a 1% fee after years of self-restraint).
More recently, the Washington Post reported that Providian National Bank is adding 4% to purchases in currencies other than U.S. dollars. Chase and Citibank had 2% surcharges the last time I checked.
American Express, which isn't affiliated with Visa or MasterCard, has been charging 2% but may have raised its rate to 2.7% by the time you read this.
Next page: Watch for the double whammy
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