Overseas Bank Fees

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All these new fees are infuriating, but they spell opportunity for Capital One. Alone among major financial institutions, Capital One is fee-free on international transactions. Not only are the bank’s credit cards free of Capital One surcharges, but the bank even eats the 1 percent fee charged by Visa and MasterCard. Its A.T.M. cards, which are tied to Capital One money-market and savings accounts, don’t charge a fee for foreign-currency withdrawals.

“We’re trying to be the no-hassle bank,” Capital One spokeswoman Pam Girardo says, “and this is one obvious way to show people that we’re not kidding.”

Not interested in Capital One? Ask your financial institution about its premier banking packages. Some banks, Citibank and HSBC among them, exempt their top-level customers from international transaction fees. But others, like Chase, don’t care: Everyone pays, regardless of the size of their banking relationship.

If you’re really steamed by the big banks’ attitude toward foreign-transaction fees, you could try traveling globally but banking locally. Local banks and credit unions often don’t charge you for being an internationalist. Except for passing along the 1 percent Visa or MasterCard fee, many don’t add additional charges to your overseas transactions.

The Fine Print
It’s possible that you don’t even know your financial institution is dinging you whenever you use plastic overseas. That’s because the charges are buried in the fine-print disclosure forms that most people throw away without reading. And lots of luck finding the information on a financial institution’s website: Most banks I checked don’t publish their complete terms and conditions there.

Poorly disclosed foreign-currency fees have generated several class-action lawsuits. One has recently been settled, and you can apply for your share of the refund pool.

And there’s a new scam aimed at international travelers called dynamic currency conversion. You flash your American-issued plastic, and the restaurant or retailer presents you a bill denominated in U.S. dollars rather than the local currency. What they don’t tell you is that the exchange rate they use is usurious—and the retailers get a cut of the action. Make it simple: Never accept a U.S.-denominated credit-card tab overseas. It’s a guaranteed rip-off.

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