Avoid Foreign Currency Fees

What is the fee?

While everyone is aware of foreign exchange rates, virtually no one knows the banks double dip on you and charge you a foreign currency exchange fee as well.

When you use your credit card and your bank converts one type of currency into another, it charges you a fee of anywhere from 2% to 4% on top of their other fees.  This works out to $20-40 for every $1000 you spend.

Think about that last trip you took – the flights, the accommodations, the tours, food, souvenirs – how much money did you spend?  $5000?  Well, that's $100-$200 the bank just made off of you.

ATM fees

These fees aren't just limited to your credit cards.  The banks also charge you the foreign currency exchange fee on any purchases or withdrawals you make on your ATM or debit card.

You thought paying a $5 transaction fee was bad when you withdraw money from the ATM?  Well, if you withdraw $1000 from an ATM overseas, you're going to get charged an extra $20-$40.  Now, that's one hell of an ATM fee!
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Foreign websites

You should also be aware of the fees when you're using foreign websites to book flights, tours and accommodations.  When you use your credit card on these sites, the bank also charges you the foreign currency exchange fee.

As a rule of thumb, if a website gives you the option to purchase in foreign currency or convert it to your local currency, always select the foreign currency.

If you select to convert to your local currency, the bank will charge you and the website will also charge you to convert and they won't give you a competitive exchange rate.

Get the right cards

Luckily there are a handful or credit card companies and banks that offer cards with either no foreign currency exchange rate or at a lower rate.  Take the time to do some research before you head out on your trip.

A simple Google search of your bank's name and the keywords "foreign currency fee" will give you all the answers you need.
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