What are international transaction fees?

International transaction fees are fees that are charged to card users when they leave the United States.

Credit cards are very useful for international travel.  Both VISA and MasterCard are accepted at almost 30 million locations around the world, and American Express is also accepted at a wide range of venues around the world.  These credit cards are very useful in that they can pay out in the local currency and be billed in dollars; this can save in exchange fees for unused currency.  Credit cards are also far more secure than cash, being easier to cancel and replace and with unauthorised credit card transactions being voided.

These fees are charged as a proportion of every overseas transaction.  They can add up to thousands of dollars over a number of years for frequent travellers.  It is worthwhile for travellers to know whether their credit cards charge international transaction fees.  Some of these cards can charge as much as 3% on foreign credit card transactions.

Not all credit cards charge international transaction fees.  Many of the cards that are aimed at people who travel frequently do not charge these fees, but it is always a good idea to check before getting a credit card.

Many travellers have a separate credit card for international travel.  These cards tend to minimise the international transaction fees, and in many cases eliminate them entirely.  Some of the best of these cards have rewards programs with airlines which mean that there are free flights after a certain amount of miles travelled as well as preferential upgrades and sometimes discounts.  There are similar cards that are run by international hotel chains.  Banks with an international presence tend to offer these cards.  These cards do not tend to be good cards to keep credit card balances on.

There are other fees that people who travel abroad should be aware of.  Firstly there are fees for using foreign ATMs.  In some cases larger banks will have limited co-operative agreements that mean that their card holders will have access to banks in other countries.  This means that the ATM transactions will be free, but it is a good idea to check this before going abroad.  These details tend to be on a bank’s website.

One thing that a traveller should remember when going abroad is that many card transactions are chip and pin, which means that a number should be entered in a key pad before the transaction is completed.