Are bogus foreign transaction fees becoming a thing of the past? I hope so! These fees, generally around 3%, are a huge scam in my opinion. For those of you who haven’t checked your credit card statement after a trip abroad, you may be paying an extra 3 cents for every dollar you spend- just because the credit card companies feel like charging such a fee.
Credit card companies have been sued for this in the past, but many still continue with the practice. Recently, Chase launched “no foreign transaction” fees on their British Airways, Hyatt and Intercontinental co-branded credit cards. Citi also announced the same on their Thank You Network cards.
American Express announced yesterday that they are eliminating these fees on their prestigious Platinum and Centurion cards (both which come with hefty $450 and up annual fees), which should go into effect in early 2011. While this is a step in the right direction, they should do the same for their other cards, which are the bulk of their members.
And while I don’t usually recommend Capital One cards for their rewards program, their cards do not charge these phony fees. It definitely makes sense to get a no foreign fee cards if you travel abroad so you aren’t throwing money away.
Even if you are earning valuable points, but paying 3 cents for each, those 25,000 points you “earned”, just cost you $750. A deal? I think not. Before you travel abroad, make sure your card doesn’t have these fees. And if they do, write to your credit card company and let them know your thoughts on these fees. Actions speak louder than words, so closing your fee-crazy accounts and opting for ones with less fees, may make sense in the long run.