Foreign Transaction Fees: The dreaded additional fees you have to pay when using your debit/credit card outside of your country. These costs should be avoided at all costs since they can easily add up to additional money you did not intend on spending.
How Do Foreign Transaction Fees Work?
According to Mint.Com, a foreign transaction fee is a “Fee that is charged when you make a purchase in a foreign currency (normally outside your home country). The fee is normally 2% or 3% of the amount that you charge. However, recently, many credit card issuers have include US Dollar purchases with “foreign companies” as foreign transactions as well.”
2% – 3% may not sound like a large amount of money but let’s look at that number in dollars.
$2-$3 for every $100 = $10 – $15 for every $500 = $20 – $30 for every $1000
Why spend that extra money if you don’t have to and can avoid it?
How Do I Avoid These Fees?
According to Forbes, there are a number of credit cards that offer No Foreign Transaction Fee benefits. Many credit unions offer only the 1% Visa Network fee (check with your individual credit union to find out if they offer this benefit to you).
More information about foreign transaction fees and how to avoid them, read the BizJournals article (2012), this article from USA Today (2012), or this article by Smarter Travel (2012).
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