Credit Card Penalties Are Avoidable

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Credit Card Penalties Are Avoidable

Posted By: Alisdair Cosgrove | Posted On: 2008-10-06 | Article ID: 100480

Nearly all credit card companies in the USA, except one, will charge a two to three percent foreign transaction fee if your card is used abroad. Not until lately did most credit card companies clearly disclose those fees in their terms and conditions.

There were many people who received notification of a class action lawsuit settlement earlier this year in regard to these fees.Now that the lawsuit has been settled, credit card companies are required to clearly state foreign and international transaction charges on credit card applications.

If you do not know how much your current credit card company charges for international transactions, contact customer service to find out most will inform you that the fee is three percent. It can be very expensive on the purse to pay an extra three percent on every purchase, but these charges can be avoided.

The foreign currency rate you will receive from your bank may be much better than that of a foreign currency exchange booth.

While ATM withdrawals are generally free of foreign transaction charges, using your debit card as a credit card comes with some risks. A credit card provides much better fraud protection than a debit card; for this reason using a debit card abroad to make purchases can be risky.

If an unscrupulous merchant overcharged or fraudulently used your credit card, you can easily contest the charges and get a refund. A debit card used fraudulently will make your bank account disappear and it will be very slow to regain.

Ultimately, the only way to pay no international transaction fees is to use a credit card which doesn't charge these fees, and with these no fee credit cards you get the security a credit card provides without the annoying added expenses.

It pays to know how much you'll spend; this is great for day-to-day life but it's even more important on vacation, ATM transactions carry a small fee...for each transaction. Few people can tell exactly how much cash they will require while traveling , so unless you have a very precise budget it can be difficult to withdraw the correct amount in one single transaction. It can also be difficult to find a cash machine in many countries, but you have to be careful to not withdraw an excessive amount of cash, which carries a theft risk. You will find that you have to pay a fee to convert funds back to your local currency as well as the fees that were paid to convert to foreign currency.

Traveler’s checks are a safe alternative to cash but they are not accepted everywhere and there is a fee to purchase them.

If you are applying to get a credit card that will not charge you additional fees for foreign purchases, be sure youunderstand the terms and conditions of the credit card policy to be sure you are getting the card you think you are. Before you use the card, check the terms of it to be sure you can pay the balance off fast if the interest rate is high so you won’t be paying extra fees in another way.

Article Source: http://www.articlecell.com

About The Author
Alisdair Cosgrove
Alisdair Cosgrove has been writing finance articles for many years and can find more of his work at the UK site CreditCardsWeb.co.uk, offering credit card deals for UK residents and also a great selection of free credit cards. Visit today to read more of Alisdair's great credit card articles including best rewards credit card use.

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