Card-holders pay foreign transaction fees without ever leaving the country. Yes, it's true!

The days of hidden transaction fees on your credit card bills are over. Technically, this should be good news, but it’s not entirely so. When Visa, MasterCard and Diner’s Club were hit with a class action lawsuit in 2006 for hiding transaction fees, they had to issue $800 million in refunds. Now, credit card companies and banks just charge more for specific transactions to compensate for having lost all of that money.

In his article, “U.S. Online Shoppers Hit With ‘Foreign’ Fee”, Bob Sullivan states that you can be charged a foreign transaction fee without leaving the U.S. This includes making online purchases from foreign merchants. This can cost you an additional 3% in fees if the merchant’s business is located in another country. However, some card issuers and banks have lower fees or none at all, like Capital One.

Foreign transaction fees can substantially increase the amount of money you spend on your vacation. This now applies to online shopping. So, before you go on that holiday or make that online purchase from the comfort of your home or office, you should inquire at your bank about their foreign transaction fees and check the merchant’s contact information to find out where they are located.

Please review these articles for more information:

http://www.creditcards.com/credit-card-news/foreign-transaction-conversion-fees-1276.php#fees

http://www.bankrate.com/finance/credit-cards/latest-currency-conversion-fees-1.aspx

http://redtape.msnbc.com/2009/05/currency-conversion-fee-hits-us-shoppers.html