International and Foreign Conversion Credit Card Fees

When traveling abroad or to a different country, there's some fine print in your credit card member agreement that most people don't read. Mixed in there with all the boring stuff is a bit about "foreign transaction fees" or "international conversion fees" you'll be charged when you travel abroad. Since the 1980s Visa and Mastercard have charged 1% of the total purchase to convert a foreign currency purchase into US dollars. This fee is standard and reasonable, is usually added to the "bank rate" and by itself is extremely competitive. You'll be hard pressed to find a better rate on currency conversions of less than $10,000. As such, using credit cards to make purchases abroad can offer tremendous value to travelers and will beat the rates at those currency conversion stands at airports by a significant margin.

Unfortunately, in many cases, the fees don't stop here. Most credit card companies also charge a fee in addition to the fees that MasterCard and Visa charge. Until recent lawsuits, many times these fees were not listed on credit card statements, leaving consumers unaware that they had even been charged. To make matters worse, the fees added by the credit card companies do not reflect actual costs that the credit card companies pay for conversion fee since the brunt of the actual currency conversion expense is already paid by Visa or MasterCard. Over the years, customers have often unwittingly made these conversion fees a major money maker for card issuers and as a result the fees have drastically inflated. Many companies now charge 3% or more on top of what Visa and MasterCard charge. This can add a significant and unnecessary expense to purchases. Some of these same credit card companies also charge the "conversion" fees even if a foreign purchase is made in US dollars.

Some consumer advocates consider this practice to be abusive because it targets travelers who make purchases abroad. That's why TravelFinances.com has created a comparison chart detailing how much different credit card issuers charge to make a purchase abroad. There are still a few credit card companies who do NOT charge additional fees beyond what Visa and MasterCard charge. Visit the comparison page to discover who they are.

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