Traveling Internationally? Beware of Credit Card Currency Conversion Fees

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Source: CreditCards.com

There are plenty of us here at Boingo who travel internationally, whether for business or leisure. For the most part, we enjoy every minute of our international experiences. But as all travelers can attest to, there are certain inconveniences about visiting a foreign country. This USA Today article reminded us of one such inconvenience: credit card currency conversion fees.

According to USA Today, most credit card companies charge around a 3% fee to the final cost for transactions in foreign countries. But there are a few banks and financial companies that offer lower or waived fees.

We launched our own investigation of U.S. credit card programs, and here’s what we discovered:

  • Bank of America Platinum Plus MasterCard charges 3% on each foreign transaction. When we asked if there was a loyalty program for longtime customers that waives this fee, the MasterCard representative replied “no.” The positives: there are no annual fees associated with this credit card program, and we earn an airline mile for every dollar charged.
  • Chase United Mileage Plus Visa charges 3% on each foreign transaction. We asked if they offered any programs that waives this fee and were told that Visa charges this amount across all their programs. We already pay $60 annually just to own this card, so we’re wondering if it’s worth keeping if we can’t benefit from perks such as a free foreign transaction. On the plus side, we do earn one United airline mile for every dollar charged.
  • American Express Platinum does not charge for currency conversion; however, all other American Express programs charge 2.7%. American Express Platinum members enjoy a bevy of travel perks but at a cost of $450 per year. Additionally, cardholders must pay off their monthly balance in full. Still, frequent fliers may find that the travel privileges — airline club access, $200 of airline fee credits, special hotel amenities, and of course no foreign transaction fees — outweigh the annual cost of membership.
  • Capital One offers various programs that do not charge for foreign transactions or annual membership, provided you have excellent or average credit level. We even saw one card that awards two airline miles for every dollar charged!

All four companies told us they have international branches that offer similar programs to non-U.S. customers but said we’d have to contact the specific country branches for specifics. Looking over the results of our own investigation, as well as the data provided in this CreditCards.com study (chart shown above), we have to agree with USAToday’s conclusion that most credit card programs that don’t charge for foreign transaction fees are “reserved for wealthy members” and — we might add — for those with very good credit history.

If you’re traveling outside the country and worry about the foreign transaction fees adding up — on both your credit and debit cards — have a look at the CreditCards.com analysis to determine the best way to minimize such fees.

About Melody Demel

Melody is Senior Manager, PR for Boingo Wireless, where she is responsible for media relations, brand building and thought leadership initiatives. Melody is a die-hard Nebraska Cornhuskers fan and retired NCAA DI college field hockey player.
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