Why can foreign transaction fees apply here in the USA?


200 million Americans don’t realize foreign transaction fees can apply without foreign travel


Foreign Transaction FeesUS consumers waste millions of dollars each year paying foreign transaction fees on credit cards. In many cases they don’t even know they’re paying these fees. Half of all credit card users don’t know whether their card has a foreign fee. But that is only part of the problem.

During the pandemic and as we wait for Europe to open, be aware of foreign transaction fees. Many Caribbean countries and Central American countries have charged foreign transaction fees. Plus, almost all cash machines outside of the US borders charge transaction fees.

Consumers don’t realize that they can pay foreign transaction fees here in the US

Irritated by hotel resort fees?Not everyone travels internationally (especially these days). Almost everyone assumes they’re safe from foreign fees while at home in the US. In fact, 4 in 10 people don’t realize that credit card companies can charge foreign fees while they’re traveling abroad. Eight in 10 don’t understand that foreign fees can apply while they’re dealing with overseas merchants from the US.

Unsuspecting online shoppers who make a purchase from a merchant based abroad could get hit with an international surcharge of up to 3 percent as a result. They are charged extra fees without leaving the country. Amazingly, these credit cardholders, overall, are already on the hook for more than $1 trillion in unpaid credit card balances overall.

“Consumers often do not know this until they spot the foreign transaction fee listed separately on a bill,” Sarah Jane Hughes, a university scholar and commercial law fellow at Indiana University, told WalletHub. “I would be surprised if these fees are not correctly disclosed in credit card agreements because that is required. Some consumers may not have read the entire set of disclosures or have read only the parts they thought they had an interest in at a particular time.”

READ ALSO: With a COVID vaccine certificate, do you have freedom to vacation?

Foreign transaction fees are considered by consumers to be unfair

Foreign transaction fees on credit cards only seem to make consumers mad. More than 80 percent of people consider foreign fees to be unfair. And, 6 in 10 go as far as to say they’ll never get another credit card that charges a foreign fee.

5 Low-Cost Ways Families Can Sit Together DownloadMore credit cards without foreign transaction fees are available today

Most of the best credit cards on the market are among them, too, which means there’s no need to sacrifice in terms of rewards, annual fees, APRs, or other features.

Although finding a good credit card with no foreign fees is increasingly simple, consumers’ lack of knowledge is problematic. At WalletHub, a financial website, you can learn all about the best credit cards without foreign transaction fees.

A no-foreign-transaction-fee credit card is a card that does not charge cardholders any fees while traveling internationally or making purchases from foreign-based merchants. A credit card with no foreign transaction fee will save the average user 3 percent on purchases processed abroad. Using such a card also is the best way to convert currency while traveling abroad, providing a lower exchange rate than airport kiosks and banks (some cards are from WalletHub partners).

There’s no reason to ever pay extra when buying something abroad because no foreign fee credit cards are available to people of all credit levels, from bad credit to excellent credit. In fact, no foreign transaction fee credit cards represent 25 percent of the credit card offers available in 2021. More than 6 in 10 credit cards without foreign transaction fees also have $0 annual fees.

Educating the public is the real solution 

Join Us“It is a challenge of public education to make people aware of the possibility of such fees and to prompt them to become informed regarding their own credit cards,” said Sherrill L. Shaffer of the University of Wyoming. “It’s a bit of a chicken-and-egg problem. Anyone who is broadly aware of such fees will likely take a moment to check out the particulars for their own card. But anyone who hasn’t looked at it for their own card probably is unaware of the issue more generally.”

 

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