From the New York Times: Credit Cards Without Foreign Exchange Fees.
I will have to do the math for my family, but Miss Em may spend part of the summer and then a semester abroad.
The 3% foreign transaction fee (pure profit for the card companies, according to the article) is offset somewhat by the cashback I get from American Express.
Would you go to the trouble to get one of these cards?
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7 comments:
Ms. Frugal - the NYT link isn't working...
Check to see if the 3% commission is a straight 3%, because for my bank card it was a $3 fee for every foreign purchase (no matter the price). So I withdrew $100 (or the foreign equivalent) each time to make it equal to the 3% fee for withdrawing from ATMs. That sounds complicated--but basically withdrawing from the ATMs saved me money on fees, rather than just using the cards.
@DP--Merci beaucoup. I think it's fixed.
@Pearl--Good point. During one trip, the ATM didn't work!!! We called the bank and they said, "Oh yeah. A lot of people have called." Now we try to have numerous backup plans.
There are two components to exchanging money (and probably other things to make it more complicated, but I don't know them): commission (exchange fee) and exchange rate. The math always scrambles my brain so I won't try to give an example. However, look at the difference in what the buying and selling rates are at a Bureau de Change and you'll get the idea (even if they charge no commission, which most of them now proudly advertise they don't). I suspect the same is true for the difference between the the 'official exchange rate' and what the banks give customers. Also, a hefty annual fee would put me right off. So, I probably wouldn't unless I could see the other details to assure me it is a really good deal. Banks don't give away money, after all...
If what Pearl says is the case,
would it make sense to open an account there for her with an international bank? Or can you get no-fee traveller's cheques?
There is no way I can get a major card that is accepted widely and get around the foreign currency *fee* (not the exchange rate), but the card offer may be different in the US.
Now, I take far more cash than I used to as so dislike paying that commission.
@Shelley--You're right. Trying to figure it out may be a losing proposition. There are always surprise fees.
@Duchesse--We carry more cash too, though I HATE carrying cash.
Hah, I'm so glad you posted this, I've been sitting on my post about this banking forever.
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