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The Low Down on Foreign Exchange Fees & Your Credit Card

Banks charging fees is nothing new. In fact, banks put fees onto almost anything and everything possible. People are generally used to this, especially since some fees are removed once people realize they are there. When banks can't get away with ridiculous fees they are forced to remove then. Therefore, it is our pleasure to help to inform you of one of the newest ways that banks are taking money from your pocket: foreign exchange fees.

Foreign exchange fees are the fees that banks are now charging for credit card purchases made for products in other countries. This includes both when you travel out of the country or when you purchase items elsewhere using your credit card and are being shipped in from foreign countries. What this means is that you want to be extremely conscious from now on about whether or not your credit card is charging these fees.

Banks are charging as much as 3% or even more on these foreign exchange fees. They validate these fees by saying that they have to convert the amounts from US Dollars to a foreign amount. Although, in actuality, there is almost no effort taken by the bank itself in this matter, they charge the fees anyway. Next time you travel to a foreign country and your bank charges these fees, know that you could be charged considerably on any purchases you make there. The same applies to the next time you go online and use your credit card to buy from a dealer in another country.

Ed Perkins, a nationally syndicated travel columnist and consumer advocate, puts the situation in perspective, "The thing is a complete gouge. By the time the issuing bank in the U.S. gets the charge it's already in U.S. dollars. It's the international Visa and MasterCard associations that actually make the exchange. They pay out pounds or whatever it is and get back dollars from the U.S. issuing bank."

This is just the newest of the bank's methods of emptying out your pockets to fill their own. The tactics are nothing new, but they are still shameful. By raising the knowledge of consumers, people can then put pressure on the banks to take away these ridiculous charges. Until then, be knowledgeable about the fact that you will be paying more than you bargained for.

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