In the last few years, many credit card companies have begun charging foreign fees for purchases made with credit cards outside of the United States. Many customers have become frustrated, wondering why the banks and credit card companies would charge such fees. While it is easy to say that these companies just want more money, the situation is much more complex than this.



Many of the fees associated with credit cards are charged in order to pay for the costs involved with a variety of different transactions. It is important to remember that there are generally more risks involved with making credit card transactions in foreign countries. When you make purchases with your credit in a foreign country, there are likely to be problems with currency exchange, fraud, or charge backs. Because the costs involved with these things can be high, banks have decided to transfer the cost to the consumers.

Most foreign transaction fees are about 3% of the transaction, and this includes any foreign taxes or other fees you may have to pay. It is likely that these fees are permanent, and banks will continue to charge them as long as they are able to pay for the cost of making credit card purchases in foreign countries. Despite this, there are a number of things cardholders can do to avoid these fees. One thing travelers can do to avoid these fees is to use prepaid debit cards. Because they are not true credit cards, prepaid debit cards can help you avoid the foreign transaction fees.

However, you may find that many hotels, restaurants, and other establishments may not accept them. If you plan on using a prepaid debit card, it would be helpful to contact these places ahead of time to make sure your card is accepted. There are also a few credit cards that don't charge foreign transaction fees. Before you get a credit card, call the company to find out if they charge these fees. In the past, Discover and American Express didn't charge these fees, but they are not as well known as Visa or MasterCard, and may not be accepted at some foreign establishments.

Another thing you should consider is traveler's checks. They are widely accepted in most countries, and you can avoid the fees that are charged for credit cards. Though traveling will always be a bit more expensive, you can avoid certain fees if you do your homework.