Originally published March 9 2005
Credit cards may not be the best way to spend money abroad
by Mike Adams, the Health Ranger, NaturalNews Editor
Although credit cards often offer the best exchange rates abroad, due to high fees on foreign transactions they are generally not the best way to spend money when outside your home country. It's recommended that credit cards are only used for major purchases while traveling in other countries. Also, paying cash often results in discounts at shops, because sellers want to avoid high merchant fees.
It is widely believed that credit cards offer the best rates of exchange abroad, but more companies are levying fees on foreign transactions, so credit cards may no longer be the best way to save money.
Although charging expenses overseas will usually yield the best exchange rate, many banks are now tacking on a fee for using credit cards in foreign countries.
As a result, travel experts say it's no longer advisable to simply charge your way through Europe or any other foreign land.
For a long time, Visa and MasterCard have levied a 1 percent ''foreign currency conversion fee'' on purchases made abroad.
But in the past five years or so, more and more banks -- especially big banks such as Charlotte-based Bank of America Corp. -- have been getting into the act, too.
A report last spring from the San Francisco-based advocacy group Consumer Action found that of 45 credit-card issuers surveyed, 26 charged currency conversion fees -- up from 17 the year before.
Banks say the fees help cover the cost of fraud-detection programs, which can be quite sophisticated at the bigger banks.
But they're really similar to other kinds of credit-card fees, says Robert McKinley, CEO of CardWebcom, which studies payment cards on behalf of consumers and the industry.
Fees charged by Visa, MasterCard and American Express have been the subject of recent lawsuits by consumers, who have charged that the fees have been inadequately disclosed.
Budget travel guru Rick Steves advises using credit cards abroad only for major purchases and to pay cash for just about everything else.
Know how much your bank charges on foreign credit-card transactions and ATM withdrawals, think about how much cash you feel comfortable carrying and then have fun.
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