Current conversion fee for credit card
May 18th, 2006 by ktula
It used to be a great idea to use credit card when traveling abroad. The plastic card replaces the huge wad of cash or traveler’s checks that i would have to carry. I have been primarily using my Citibank Mastercard in trips out of the country because of its 1% cash reward. However, in view of my recent “discovery” that Citibank (and most other Credit card issuing banks, excluding Capital One) charges a not so insignificant 3% on all purchases made out of the country, i have to rethink how i pay when i am abroad.
It’s really quite outrageous that most credit card issuing banks are charging 2% on top of the 1% transaction fee charged by Visa/Mastercard for doing absolutely nothing. The only exception is Capital One, which does not levy any conversion fees and at the same time even absorbing the 1% charge from Visa/Mastercard. American Express, not associated with Visa/Mastercard, charges a 2% fee on purchases made outside of the United States.
I think there are a few ways for me to not pay the conversion fee while having the convenience of not carrying too much cash:
- Obviously, do not use any credit card that charges conversion fee.
- Use my ATM fee-free bankcard in foreign ATMs that do not charge ATM fee. I have noticed that most ATMs outside of this country do not charge any ATM fee, even if you are using an ATM card issued by another bank.
- Use a debit card instead of credit card. Some debit cards do not have any currency conversion fee.
Guess which credit cards i will not be carrying with me tomorrow when i go to China.
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