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Posted March 27, 2006

ATM/CREDIT CARD FEES WHILE TRAVELING OVERSEAS

TRAVELER BE AWARE !!!


You can be hit with a surcharge for withdrawing cash from a foreign ATM, even if you pay for this service before you leave the United States, your credit card could be charged anywhere from $2.00 to $17.00 per transaction!!! This fee is buried deep in the fine print of credit card agreements.

Some banks call this a “foreign transaction fee”. Well what’s going on is that the banks charge you for currency conversion surcharges every time you withdraw money from a foreign ATM. Unfortunately this also happens when you book your flight on a non U.S. carrier. The same with cruises and Hotels, they all have the same charges. Did you know that your bank does absolutely nothing for this fee? It provides absolutely NO service for the fee that they extract. Visa and MasterCard have already done all the work and your bank card issuer is simply layering another fee on unsuspecting consumers. Not a single bank spokesperson could suggest what service a bank provided for the fee.

Many have suggested using bank ATM cards overseas in order to avoid these fees. BUT unfortunately half of the major banks are now charging their customers the same fees (and in some cases more) whenever they use a debit card overseas. With many major banks, there is no easy escape from the foreign transaction fee.

Added, in many cases, to the indignity of this overseas transaction fee is another additional fee: “the cash advanced fee”. Consumers get hit with this fee, in most cases, whenever they use a credit card to take money from an ATM whether in the USA or overseas.

HOW TO AVOID THESE CHARGES ???


1. Find a bank card that doesn’t charge foreign transaction fees.
Capital One credit cards do not charge the foreign transaction fee.
If planning on using your debit card, make sure your bank does not charge a foreign transaction fee. Over half do. Smaller banks, regional banks, credit unions and online banks which issue credit cards often do not charge foreign transaction fees.

2. Avoid expensive ATM/cash advance fees.
Read the fine print before deciding which card to use overseas. If planning to use an ATM card, make sure your bank does not charge overseas transaction fees. With a debit card, online banks (and some smaller banks) often have provisions to refund ATM charges. With a credit card, find a credit union that has a low ATM or cash advance charge. If you have an ATM/check card, know what charges are assessed for using foreign ATMs. Sometimes the ATM fee can be more than a credit card cash advance fee if not used wisely.

3. Ask banks and credit card issuers whether fees are additive.
There is much confusion, even within the banks, about how fees are charged. Ask your bank whether the fees are additive. If so, your real cost for getting money from an ATM overseas will be one percent conversion fee, plus two to three percent bank foreign transaction fee, plus the three percent cash advance fee (or a fixed ATM charge). That can add up to a seven percent, or more, fee to take money from a cash machine overseas. Also, don’t forget that some credit card companies see ‘onboard purchases’ as a foreign transaction if you pay in dollars, you could see a up to 3% fee.

4. Ask your bank card issuer whether their foreign transaction charge includes the Visa/MasterCard currency conversion fee.
Some do. Some don’t.

5. Ask your bank whether they charge foreign transactions fees on cash advances from foreign ATM.
Some do. Some don’t.

6. Ask your bank to waive the ATM fee.
Some will. Some won’t. If your bank won’t, ask around and try to find another bank that will.

7. Look for global alliances that reduce transaction fees.
Some banks are members of international ATM alliances which provide no-fee access to bank card holders when using certain bank machines. Ask your bank if they are a member of such an alliance. Some banks with these alliances do not even charge foreign transaction fees. A good example is Bank of America. They have a no-fee ATM agreement with the following banks: Barclays (United Kingdom), BNP Paribas (France), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada), Westpac (Australia and New Zealand). Withdrawing money with a Bank of America debit card from one of these banks’ ATMs is fee-free.


LAST BUT NOT LEAST:

·  Always call your bank for more information before you go on a trip. Don’t be afraid to ask to speak to the supervisor.

·  When booking on-line, try and pay in dollars. This basically means that you make your reservation in the US or by calling the US office.

·  Refuse to let foreign vendors charge your card in US dollars. You will not get a desirable exchange rate.

·  Even with these fees, using credit cards and debit cards overseas is the most economical way to convert currencies. The bank card rates, even with these fees, are almost always better than exchanging money at an exchange booth at an airport or at the front desk of a hotel. But be smart about it and be aware what foreign transactions are really costing.

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