Credit Card Debt: Currency Conversion Fees Not In New Credit Card Act

By Phillip Williams on April 15, 2010, 6:28 am Posted in Finance News

Although, the newly enacted credit card law of 2009 managed to curb high fees but it did little to address currency conversion rates. When it comes to currency conversion, all international travelers and those who use their credit cards to purchase goods in other currencies will remain at the mercy of their credit issuers. Surprisingly, currency conversion rates are 3%, on average. This means credit card company and its corresponding bank are charging $3 on every $100 of goods purchased. Every major credit card company charges 1% on such transactions whereas corresponding bank levies double that amount. These charges also apply to ATM cards and any credit card advances.

Understanding Currency Conversion Fee

Keeping in view such exorbitant charges, experts suggest that it is wise to understand currency conversion charges of current credit card before using them overseas. It is also interesting to note that these fees vary considerably from company to company. For example, American Express charges 2.7% on credit card purchase and credit card cash advance but there is no fee for ATM withdrawal or debit card purchase. Compare these charges with Bank of America which charges 3% on all credit cards, cash advance and debit card purchase. As for ATM, Bank of America charges $5 plus 1% on every ATM withdrawal. Perhaps, it is time that international travelers start focusing on their currency conversion rates.

 

Short Description

The new Credit Card Act of 2009 did not force credit card companies and banks to limit soaring charges on currency conversion rates on credit card transactions. Most major companies are charging an average of 3% per overseas credit card transaction that utilizes a foreign currency. Surprisingly, ATM withdrawals, debit card transactions and cash advances are also not exempt. Such charges impact frequent international travelers who regularly use their credit cards to purchase goods in other countries. Therefore, consumers should start paying attention to currency conversion disclaimers.

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One Response to “Credit Card Debt: Currency Conversion Fees Not In New Credit Card Act”

1. Josie says:

   May 2, 2011 at 12:05 pm

   You’ve got it in one. Couldn’t have put it bteetr.