currency


When shopping around abroad, you may not be cognizant of the fact that your credit card company is taking a clandestine fee for every transaction from you.  If you adopt some easy tactics to avoid it, your shopping will be way cheaper.

You will come to know about it only when they send you the statement!  This fee is called “Foreign Currency Conversion Fee” and you will pay it on every credit card transaction.

Credit card companies are making this profit for a very long time from their customers.  However, people don’t know about it until they come back and see the statement.  The charges will vary from one card to another.

So if you are purchasing a leather jacket for in Milan, Italy, the transaction will be shown on your credit card statement as the 9 because VISA or MasterCard will charge one per cent while your card issuer another two per cent making it three per cent in total. Some say it is ‘conversion fee’ while others call it ‘transaction fee’.

While no companion has disclosed such fee structure in the past, due to several lawsuits, some of them have since issued statements clarifying about these fees.

How to protect yourself from such unreasonable charge?  Here are some tips:

Make most of your essential spending at home itself.  So the airline tickets, hotel accommodation, and payment for car rentals should be made from US. Dining and shopping are the things you will do overseas only.  You can use the alternative of debit cards for these expenses.  Debit cards are very handy just like credit cards and there will not carry any fee while you use them. Study the credit card agreement and speak to a customer service representative before you travel.  You can switch to debit card or any other credit card if you find that your regular credit card is charging you fees. Stored-value cards are now available with all major card issuers.  You can get them for your travel.  Such cards may charge you upfront some fees but you will be saved from the big conversion fees later. Never change your money at the airports or at hotels where you stay.  They are most expensive.  Also, do not convert your money very frequently. In spite of these fees, you should not go for travelers checks.  They will charge a fee of about seven per cent at the time of purchase and then you will be charged with the conversion fees in addition for every transaction. Instead, carry some cash for small payments.

The bottom line is simple – use your plastic anytime with full information about its hidden bites.