How to avoid foreign transaction fees

February 27, 2006 9:33 AM

MasterCard or Visa with no foreign transaction fees?

I'm doing a lot of international (outside of U.S.) travel lately and I'm tired of me and my company getting ripped off for "foreign transaction fees." Anyone have experience good/bad with MasterCard and/or Visa without these fees?

posted by ZenMasterThis to work & money (14 comments total)

I have a regular Visa and a bank card Visa and I have never seen a foreign transaction fee on any of my statements. I have used my card frequently in Asia and Europe with no extra fees unless they were built into the exchange rate at the time of charge. However, I frequently reviewed the rates between what I was charged in Japan and the actual exchange rate and found that I usually did better than the exchange rate at the local bank. Of course, ymmv.
posted by Alison at 9:48 AM on February 27, 2006

I use my Scotiabank (Bank of Nova Scotia, Canadian) Visa (attached to a line of credit) in the UK where I'm living right now - no fees and even with the extra 1% on the exchange rate I'm still way ahead of what the local banks or 'bureau de change' would give me.
posted by tiamat at 9:59 AM on February 27, 2006

Alison, according to this and other pages, Visa and MC cards all charge at least 1% on foreign transactions.

ZenMasterThis, you may want to consider a Citibank Dividend Platinum Select MC. It gives 1% cashback on all transactions, and has a 3% foreign transaction fee, meaning that your net fee is only 2%, nearly the smallest amount you'll pay on any card. When you're back in the states, you'll be getting that full 1% cashback as well as 5% in grocery stores, pharmacies, and gas stations.

Keep in mind that a 2-3% fee isn't bad if you consider that credit cards generally give the best exchange rates available.
posted by rxrfrx at 10:04 AM on February 27, 2006

I have used my card frequently in Asia and Europe with no extra fees unless they were built into the exchange rate at the time of charge.

That's usually how it was done until last year.

a 2-3% fee isn't bad

I disagree, considering that you can get a 1% fee fairly easily. For example, my credit union credit card adds no extra fees on top of Visa's 1%. Try your local credit union.
posted by grouse at 10:11 AM on February 27, 2006

Capitol One cards don't charge a foreign transaction fee, at least the one I have.
posted by Floydd at 10:11 AM on February 27, 2006

On my last trip to Europe, I found that one of my cards had that little fee and the other didn't. Effectively, the card that didn't have the fee had it buried in its exchange rate.

One thing I do call bullshit on it the $5.00 Wells Fargo charges as a "Non Wells Fargo ATM fee" for ATMs outside the US. $5.00 is just too greedy considering it would be impossible to use one of their ATMs outside the US. And now their charge includes Canada and Mexico too.

Of course I didn't find this out until I got home and had $25 in charges on my account. Combined with finding out that WFB is the only bank I could find that charges for Bill Pay, I am now shopping for a new bank.
posted by birdherder at 10:13 AM on February 27, 2006

What's offensive about the 1% "exchange fee" is that it was 2% fee.added recently, with very little consumer notice, and it's a fee for a service that costs the bank essentially nothing to provide. They're charging solely because they can, not because they need to.

birdherder; agree with you on the Wells Fargo $5 fees. One way you can make it slightly better is to up your ATM withdrawal limit to $1000, so at least it's only a 0.5% fee.
posted by Nelson at 10:16 AM on February 27, 2006

What's offensive about the 1% "exchange fee" is that it was added recently ... shouldn't post so fast
posted by Nelson at 10:17 AM on February 27, 2006

ALL cards that use Visa/Mastercard charge a 1% fee. No, they don't list it as a fee, they just skim it. Yes, this sucks. It's deep in the fine print of your terms and conditions.

Your best shot is to find a card that doesn't charge additional fees. Bank and credit union-issued Visa/MCs often don't charge extra fees. My CapOne card doesn't either. Good luck and read the fine print.
posted by desuetude at 10:26 AM on February 27, 2006

My MBNA Mastercard charges a 3%fee which sucks. I thought it was standard across the board for all Mastercard accounts. Not sure if it is just because I have a card with no annual fee.
posted by JJ86 at 10:33 AM on February 27, 2006

Massive and recently updated FW thread
posted by rxrfrx at 10:58 AM on February 27, 2006

Good discussion here. Should be an answer for you somewhere in this thread.
posted by Xurando at 10:59 AM on February 27, 2006

What's offensive about the 1% "exchange fee" is that it was added recently

No, it's always been there. It used to be hidden in the exchange rate, and people didn't always notice because the basal credit card exchange rate is pretty good.

Recently it has been broken out by Visa and MasterCard because they are no longer calling it a "foreign exchange fee" but now an "international transaction fee." This is because merchants were offering Dynamic Currency Conversion to their customers—a hotel in Switzerland could charge a U.S. customer in USD. Under the old system Visa/MC lost their 1% fee when DCC was used because they did not perform any currency exchange. In the new system they can charge 1% anyway.
posted by grouse at 2:50 PM on February 27, 2006

What's offensive about the 1% "exchange fee" is that it was added recently

No, it's always been there. It used to be hidden in the exchange rate, and people didn't always notice because the basal credit card exchange rate is pretty good.

In the new system they can charge 1% anyway.

It was also broken out because some credit card company lost a court case (in CA, I think) that said they had to more clearly disclose the fee.
posted by rxrfrx at 4:56 PM on February 27, 2006