Credit Card Companies Keep Stealing From Travelers
May 19th, 2009 Posted in General, Travel industry
As you may have noticed if you have used a credit card in a foreign country in the past few years, the company issuing that credit card has put its hand deeper and deeper into your pocket. Most will charge you 3% on the transaction, even if you’re in Ecuador or Panama (where the U.S. dollar is the currency) or if you paid for your hotel in dollars and there was no conversion. The fee is, plain and simple, a money grab. Pure profit at your expense.
If you’re a voting American and this pisses you off, there’s no consolation in the current bill moving through Congress to scale back the credit card company excesses (admittedly some even more evil than this one). Tripso has some articles on what you can do to make your voice heard: an open letter to Barney Frank and credit card bill has enormous loophole.
Meanwhile, there are a few things you can do to lessen the theft from Chase and Citibank. The best bet for now is to take your business to Capital One. They rightly believe that not charging this fee is a competitive advantage. Considering every frequent traveler I know without a company expense account uses their card on the road, I think it’s working. Some local credit union’s cards waive this fee as well. The American Express cards are a little better, at 2% instead of 3%, but that still hurts and it’s up from 0% a couple years ago. (So much for those “free” miles you’re getting.)
If you have an ATM card it can be less, but that depends on the fees. If your bank charges you $5 and the local bank charges you $2, and you took out $200, that equals a 3.5% fee. So take out as much as you’re comfortable carrying around each time or the daily maximum. Some internet banks will refund the fees, but read the fine print to make sure it covers international withdrawals. In some countries your bank may have branches and that’s the best bet—it should be transaction-free. International banks like Citi, ScotiaBank, and HSBC are more prevalent in some areas than others, so check a location map and see how it matches up with your travels.
With a little work and pre-planning you can keep more of your travel funds instead of launching your own mini bank bailout.
11 Responses to “Credit Card Companies Keep Stealing From Travelers”
By Molee Leng on May 19, 2009
The most useful guide I’ve found for comparing these fees is here:
http://www.flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange
A note about HSBC: I used to think I was getting a good deal by using my HSBC ATM card abroad at HSBC ATMs, but they were charging especially high exchange rates at the time of withdrawal — definitely a few %s over the market rate at the time.
By tim on May 19, 2009
Molee, that’s an awesome chart. Thanks for the link. Good to see that there are alternatives to Capital One in case the peer pressure becomes too much and they turn evil too. The E*Trade, Schwab, and Fidelity options are interesting since a lot of people have investment accounts at one of those anyway. GMAC? Who would’ve thought the arm of an insolvent car company would be more consumer-friendly than the others.
By Mike on May 19, 2009
I’ve been using that Fidelity card for a couple years now and it’s saved me hundreds & hundreds of dollars… I had been using BOA before that… ouch.
By Kyle on May 19, 2009
I can vouch by Schwab. We’ve used their cards in a lot of countries with no fees. Even if the local ATM charges us a fee, Schwab reimburses us for that fee at the end of the month!
By tim on May 19, 2009
I’ve got accounts at both Schwab and Fidelity for retirement. Looks like I need to move some liquid money to one of those too…
By Beki on May 20, 2009
That Bank of America list of partner banks is very handy. While staying in Glasgow for a few months, I walked my mile to the Barclay’s ATM for our weekly allowance on a tight student budget, and my husband and I very much appreciated not having to pay fees!
By sam on May 20, 2009
I also use Bank of America and appreciate that they have partnerships with many banks around the world so that you can take out $ without any fees. Also can vouch for Capital One – used that on a recent trip to the South Pacific with no problems.
By Ben on May 21, 2009
I live in the UK and have always used a Nationwide Debit Card as they seem to be the only ones who don’t charge for withdrawing. I did hear the other day that they may be charging now for with drawing outside of Europe but not as much as others.
Its a real shame as Travellers Cheques are pretty useless these days.
By cheap furniture on Aug 11, 2009
If you have used a credit card in a foreign country in the past few years, the company issuing that credit card has put its hand deeper and deeper into your pocket.I also use Bank of America and appreciate that they have partnerships with many banks around the world so that you can take out $ without any fees. Also can vouch for Capital One.
By Best Phuket Hotel on Nov 20, 2009
Ya I have heard a lot about this…..
By China Oriental Travel on Nov 20, 2009
Dont tell me… Oh God I have faced the same thing too…