Tags: Credit Card | Fees | Overseas | Withdrawals

You Must Fight Back When Hit With High Credit-Card Fees on Overseas Withdrawals

You Must Fight Back When Hit With High Credit-Card Fees on Overseas Withdrawals
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Wednesday, 27 April 2016 07:20 AM Current | Bio | Archive


Although Massimiliano Pizzaomanno was raised in Salerno, Italy near the Amalfi Coast, he currently lives in Los Angeles.

When the 43 year old travels back to Europe, he brings his Italian bank card to withdraw money because foreign transaction fees add up.

“When you withdraw money in a different country, you get charged,” Pizzaomanno told Newsmax Finance. “If I use my Italian bank card here in the U.S., I get charged. When I use the American card in Italy, I get charged.”

Foreign transaction fees are typically charged cardholders when they purchase items while overseas or use an overseas bank to process a transaction.

“Foreign travel is expensive enough without having to pay 2% to 3% extra in unnecessary fees,” said Matt Schulz, senior industry analyst at CreditCards.com. “It may not sound like much but it can add up to a few hundred dollars tacked on to your family vacation.”

Pizzaomanno has learned not to use his American bank card in Italy at all.

“You can certainly ask the issuers to reduce or drop the fee but they don't have to do so,” said John Ulzheimer, a financial expert with Credit Sesame. “Having a no-fee back up card ready to go is the best way to avoid the fee.”

Increasingly, credit card foreign transaction fees are fading.

Some 40% of cards for 12 major issuers don't charge for use abroad, according to a new CreditCards.com survey.

“The credit card industry is incredibly competitive today and that competition is helping push foreign transaction fees out of the picture,” Schulz said.

The CreditCards.com study found that regardless of card type, Capital One, Pentagon Federal Credit Union, HSBC and Discover are issuers that do not charge any of their consumer credit card holders foreign transaction fees. The other eight have a mixture of fee and no-fee cards.

“Fees equal revenue,” Ulzheimer told Newsmax Finance. “That's true for every fee charged by card issuers. Issuers will test your acceptance of certain fees and if you continue to use the card and never ask for the fees to be dropped then they're going to continue to charge them.”

The most common fee for issuers that still charge foreign transaction fees is 3% though American Express charges their cardholders 2.7%.

“One of the most expensive things a card issuer can do is to acquire a new customer,” said Ulzheimer. “If not having a foreign transaction fee increases the response rate of card offers and usage rate of new and existing cards then it's a financial no-brainer to drop the fee but that certainly doesn't mean it won't come back some time in the future.”

Chip and PIN cards are another method or tourists to consider when looking for a way to pay on their vacation. “A card with no foreign transaction fee can save you hundreds of dollars and a card with chip and PIN capabilities can prevent multiple headaches when trying to pay for things overseas,” Schulz told Newsmax Finance. “Add them together and you’ve got yourself a pretty good card to take overseas.”

Juliette Fairley is an author, lecturer and TV host based in New York.

© 2019 Newsmax Finance. All rights reserved.

   
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Increasingly, credit card foreign transaction fees are fading. Some 40% of cards for 12 major issuers don't charge for use abroad, according to a new CreditCards.com survey.
Credit Card, Fees, Overseas, Withdrawals
522
2016-20-27
Wednesday, 27 April 2016 07:20 AM
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