Fees For Using Your CC Overseas

Oct. 8, 2010:

"Kathleen, about a year ago, maybe two years ago, you wrote that the Bank of America and other large banks were charging the 3% foreign transaction fee even on debit card transactions.

"That was the first I'd heard of this. My banks don't--or didn't--charge the fee.

"Today I checked some ATM debit-card withdrawals and discovered that E*Trade now charges the fee. One percent to start. They charge the fee on withdrawals from both E*Trade Bank and E*Trade Complete (brokerage) accounts.

"Also, the Charles Schwab credit card now charges a 2% fee. Schwab was one of the very few credit cards without the fee. I guess Capital One Bank is the only credit card still without the fee."

-- Peter T., Argentina

This is a complicated and frustrating topic.

We just signed up for a business AMEX. The materials from American Express explain that we're going to be charged the 2.7% foreign transaction fee up front...

In our case, many of our charges are in Panama, which uses the U.S. dollar as its currency. In other words, there is no currency transaction involved. Therefore, what is this fee for? Who's getting it?

PayPal charges 1% to use their debit card overseas, but they give you a 1% rebate on debit card transactions, so it's a wash.

Note that Schwab continues to reimburse ATM fees.

We're preparing a complete guide to international credit and debit card fees. Watch this space.

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