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Credit Cards 101: Foreign transaction fees and merchant disclosure
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Have you noticed more foreign transaction fees on your credit card statements? If you haven't, it's probably because your credit card issuer is still burying the foreign transaction fee within the charge. This is a common practice amongst many card issuers and it means that you don't see or likely notice the foreign transaction fee unless you do the math. Most issuers charge 3% to convert the charge from non-US funds to US funds. However, more and more banks are starting to charge the fee on any transactions billed outside the US, regardless if a conversion is completed.
Merchants do not disclose processing will take place outside the US, therefore the consumer has no idea they may incur a charge for using that merchant's services if they pay using a credit card. The credit card companies (MasterCard Worldwide, Visa, American Express, Discover) have not required merchants accepting their cards to disclose this information up front and it's not going to happen unless there is pressure from banks and consumers. At this point, card issuers/banks have little reason to do so, people claim they will close their accounts over this fee, but once they find the fee is charged with most other issuers they resolve to stay where they are. Banks cannot advocate for consumers by disputing the charge, so don't even ask. So as consumers what can you do? At this point, not much, but complaining to your card issuer does nothing more than bark up the wrong tree.
For more info: MasterCard Worldwide, Visa, American Express, Discover
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