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Limited Options for Cards Sans Currency Conversion Fees

Dear Creditnet: I received a credit card offer in the mail from the university I attended for graduate school. It's a MasterCard issued by a major bank with no annual fee, and it also boasts no currency conversion fees for international transactions. Is this a perk that's common through other no annual fee credit cards as well? I travel overseas often, so this could really come in handy on future trips.

Answer: No, it's actually quite uncommon for credit cards to not charge currency conversion fees. In fact, Capital One is the only major credit issuer left that still doesn't charge additional fees for international purchases on any of its credit cards.

It's frankly always amazed me that Capital One doesn't advertise this as a major advantage over competitors' cards, but perhaps that's because it may be going away soon?  With the CARD act set to take effect next month, I'm sure they're looking for any possible way to increase fee revenue in 2010.

Other popular cards, such as Citibank credit cards or Chase credit cards, currently charge a 2 percent fee in addition to the 1 percent processing fee levied by Visa/Mastercard for converting your foreign-currency purchase into US dollars.  If you use your credit card a lot when traveling overseas, then you know just how fast the additional 3 percent can add up.

Looking over your billing statement after returning home from a trip can be quite a shocker! Try comparing other terms of the credit card offer you received, such as the APR and rewards program, with cards offered through Capital One before making a final decision about which one to take on your next trip. In addition to not charging any foreign transaction fees, Capital One offers some great credit cards that give up to 2 percent cash back on purchases and have no limit on the cash you can earn—not a bad deal during times when cash is tight for many of us.

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Joshua Heckathorn's picture

Joshua Heckathorn was President of Creditnet, is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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