Why are these fees so important these days. Well the fact is with the euro dropping and the US economy on the upswing, slow but sure, many Americans will again be traveling overseas. So it is important to know how to save money and how to compare and when you are haggling with a vendor in the streets of Beijing, you might just want to know the true costs his wares will be after using your credit card to make the purchase.
Credit card companies charge a 2% to 3% fee because they claim it's necessary to help cover the costs of the currency conversion. That excuse is a crock! The currency conversion takes place within 24 hours, so it is highly unlike they would lose (or gain) 2-3% percent during the process. This fee is obviously a big money maker for them.
Fortunately, there are a few ways you can reduce – or even eliminate credit card foreign transaction fees:
Capital One reward is one of thel the major players in the credit card world, Capital One is the only issuer that hasn't succumbed to charging foreign transaction fees. It seems like something too good to be true… but it's not. This of course makes them a top choice for international usage. And without a doubt their best cards for travel
Citi launched new card just a little over a year ago and packs a lot of benefits. It does have a drawback in that it is more expensive than the others above; the ThankYou Premier is $125 per year. However this is one of my favorite no foreign transaction fee credit cards because of the "Flight Points" program – you earn 1 point per mile flown. So let's say you flew from Los Angeles to London. By my calculations that's around 5,400 miles one way (so let's say 10,800 roundtrip). With this card you would earn 10,800 points for that flight.
If you want a high-end travel credit card with no foreign transaction fees, then Amex Platinum is in a class of its own. If you don't travel much, it won't be worth it because of the $450 membership fee. However you may be surprised to learn that for even the occasional traveler, the value of the benefits can trump the fee many times over. For example, you get over $450 worth of benefits every time you stay at 700+ high-end hotels across the globe (get free room upgrades, food/drink/spa credits, etc). This is why it's a favorite not only for foreign travel, but also domestic. Simply put, you won't get these perks with any other card.
If you travel a lot look shop carefully for cards with the best benefits for your lifestyle. Be a smart consumer and save.
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Barry Norman is a contributor to and blogger at firstcredit.net. For over ten years FirstCredit.net has provided consumers free information helping them make sense of credit cards and the financial industry. Whether you are a longtime cardholder or looking for your first credit card, FirstCredit.net can help you make informed credit decisions.
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