Converting money while traveling internationally is a task that almost every international traveler faces. The number of ways to convert money are increasing, but so is the number of entities looking to take a fee for the transaction. Several years ago, many travel advisors would indiscriminately advocate using credit cards to make purchases in a foreign currency. This was because many credit card issuers generally charged conversion fees that were much lower than could be achieved at foreign currency exchange booths. Additionally, the fees were near what could have been achieved at a bank, and when using a credit card the traveler would never be left with unneeded foreign currency at the end of a trip. At the end of the day, travelers got decent exchange rates, credit card issuers earned modest fees and nearly everyone was happy.

Now, several factors have changed. With the introduction of Dynamic Currency Conversion (DCC), credit card issuers have new competition for those lucrative currency exchange rate fees. DCC is billed as a service by individual merchants, and it is facilitated by merchant services providers. Basically, it allows travelers to see the exchange rate being applied and be billed in their home currency at the point of sale. Although the fee varies from merchant to merchant, the typical fee applied for DCC service is usually between 2-4%. Click here to see a sample receipt where the customer choose to use DCC. IF the fees stopped here, DCC would allow travelers achieve an exchange rate and fee similar to what some credit card issuers would charge. Additionally, they would have the advantage of seeing what the total amount charged at the point of sale rather than waiting for their credit card statement to arrive in the mail.

Unfortunately, rather than give up the fees that easily some credit card issuers have taken to charging transaction fees even after DCC is chosen. Unassuming customers (thinking they know the total amount for a purchase) will be charged even more fees when the transaction comes through on their credit card statement. These card issuers even changed the name of their fees from “foreign conversion fees” to “foreign transaction fees.” Common explanations from the guilty credit card issuers include asserting that foreign card users require more services than regular card users, such as an international phone number to call. However, most analysts agree these fees do not reflect actual costs. Furthermore, not all credit card issuers charge the fees.

Below are a list of credit card issuers who add additional fees after DCC has been applied. The total fee added by the card issuer is listed after the issuers name.

Offenders:

• Bank of America: 3%
• JP Morgan Chase, Bank One, First USA: 3%
• CitiBank: 3%
• HSBC: 1%
• MBNA: 3%
• US Bank: 3%
• Washington Mutual: 1%
• Wells Fargo: 3%

Furthermore, unless the fee is refunded by the issuing bank, all cards issued by Visa or MasterCard will also have up to 1% of fees added by Visa or MasterCard after DCC.

Customers of one of these companies have limited options. As consumer awareness increases some of these companies may revise their policies, but this will likely only happen if consumers make their voices heard. Consumers are faced with two primary options: writing offending companies to complain and cancelling the cards of companies with double fees. We’ve included contact information for many of the credit card companies listed above in our directory of credit card contacts.

One notable exception to the companies listed above is Capital One who actually refunds the fee that Visa charges. Additionally, Discover Card and American Express do not allow DCC fees to be added. Like Capital One, Discover Card charges no fees for international transactions.