Credit cards charge a variety of fees, but if you’ll be spending money abroad for business or pleasure, choosing a card with no foreign transaction fees will help you avoid spending extra money when traveling abroad. 

If you’ve ever used a credit card, you’ve probably noticed numerous “fees” in your bill. These can really add up depending on how you use your card. They can be a good way to establish a good credit score for young adults, but they also come with hidden costs. Credit card companies charge a variety of fees, but here are the main categories of common fees. 

  • Interest: This is the percentage rate you pay if you carry a balance between billing cycles. Your rate might increase if you miss a payment, so beware!
  • Annual Fee: A set, yearly cost for the privilege of using the card.  
  • Late Fee: A set penalty added to your balance for paying your bill late. Often, these fees depend on the amount of the balance on your card.
  • Cash Advance Fee: Usually, you’ll pay a fee of about 3% on the amount of a cash withdrawal.
  • Balance Transfer Fee: The fee you’ll pay if you transfer the balance of one card to another. The rate is usually between 1 – 5%, and these offers are often made during promotional periods. 

Foreign Transaction Fees: A foreign transaction fee is what your credit card issuer charges when a purchase you make with your card is processed in a foreign currency or when it passes through a foreign bank. To process these foreign transactions, your card issuer often charges you a set percentage of the amount of this transaction, usually about 3% of the total purchase. You’ll typically see this fee listed as a separate charge on your card statement. .

  • For example, if you spend $100 at a shop in another country, you might pay an extra $3 on your purchase as a foreign transaction fee. It may not seem like much, but these costs can really add up over a long business trip or European vacation. 
  • Online purchases from other countries will often cost you a foreign transaction fee, too. 
  • There’s good news, too. Not all credit cards charge a foreign transaction fee. But even if your card doesn’t charge this fee, there are still other surcharges you should look for while you’re on that dream vacation.
  • Remember, a credit card company can only charge a foreign transaction fee if the card’s terms and conditions clearly explain that. 
  • Paying with a credit card that has no foreign transaction fee–in the local currency–is almost always the best choice for your budget. Your card network handles the currency conversion rate. In addition, you’ll have the card’s liability protection, and that’s an important benefit. . 

About half the credit card companies charge a foreign transaction fee according to a 2017 CreditCards.com survey of 100 popular cards. To find out if the card you’re considering charges any of the fees listed above, be sure to read the “fees” section of the terms and conditions carefully before you choose the card. 

Credit cards also offer bonuses and promotions that help you avoid these fees and also to rack up bonuses you can use for a variety of purposes such as travel points, etc. Business Insider recommends the following credit cards and describes their offers. Here are the best credit card rewards and sign-up bonuses as described by the Business Insider

Best credit card for frequent flyers: Airline rewards credit cards

1 Shares:
Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like