International Travel

As many of us have learned from personal experience, your credit card company can make a killing off of your purchases overseas. What do I mean? When using your credit card internationally, your network (MasterCard, Visa, Discover and American Express) will add a 1% foreign currency conversion fee to all transactions you make. Add the 2% fee most US banks tack on, and you have a nice 3% charge on all purchases you make out of the US. Want to know what your network is charging you? Keep reading.

What are you being charged?

Here are current foreign transaction fees for some of the largest US card issuers:

• American Express, 2.7%
• Bank of America, 3%
• Barclays, 3%
• Capital One, 0%
• Chase, 3% *
• Citibank, 3%
• Discover, 2%
• Fifth Third Bank, 3%
• HSBC, 3% *
• US Bank, 3%
• USAA, 1%
• Wells Fargo, 3%

Tired of paying these foreign transaction fees? There is a solution: Capital One. Our research indicates Capital One is the most generous large card issuer in-terms of foreign transaction fees, offering no foreign transaction fees and eating the 1% fee charged by Visa or Mastercard. While we're not suggesting everyone go out and sign up for a new card right now, if you're a frequent overseas traveler, you may want to consider getting a no or low foreign transaction fee card before your next trip.

The Exchange Rate Matters Too

Keep in mind, your credit card company also has the freedom to charge you an unfavorable exchange rate, in addition to the foreign transaction fee. American Express has a reputation for giving cardholders favorable exchange rates, despite their 2.7% fee, so in theory you could actually end up paying more using Capital One. NerdWallet is working on an "Around the World" report where we charge the same item using several different cards in several different countries to see where things really shake out.

Go for Local Currency

One last piece of advice. When making a purchase overseas, make sure you're charged in the local currency. Often, foreign merchants will offer to charge you in U.S. dollars instead of the local currency. While this may seem easier, some merchants have been known to wait three-or-four days for the highest exchange rate.

* While HSBC and Chase offer lower charges to a small number of "premier" customers, the majority of their cards charge 3%.

Stephanie Neruda

President, NerdWallet LLC

http://www.nerdwallet.com

NerdWallet is a credit card search and comparison site, and seeks to become the best source for unbiased credit card information. The company was founded by a financial industry veteran in the wake of the financial crisis in August 2009, and officially launched in March 2010. NerdWallet is privately held, and is based in New York, NY.

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Whenever we are travelling to other countries, then we can explore a lot of ways and techniques that can be easy to implement and can also be light on our personal finances. Let's discuss how we can save money when we travel overseas and actually reach the destination country.

1) While at the airport, one of the easiest ways to save money is - Try not to change currency at the airport. The currency exchange rates are usually higher at the airport, as they are themselves paying a lot of rent to the airport authorities and have to manage their offices there at the airport.

If it is really a necessity, then try to exchange only the minimum possible currency so as to pay your travel cost to the hotel. Once you have reached your hotel, you can check in you room, come out of the hotel and have your currency exchanged at any of the currency exchange terminals located nearby / in any supermarket at lesser rates. Just be sure to do a comparison of the currency exchange rates at least 2 terminals before exchanging.

Now, with this local currency, you can also pay your hotel bills.

2) Try to get a mobile SIM card as soon as you are able to get your currency exchanged. This is very important, because making local / even long distance calls from your hotel can be a very expensive proposition. Our goal is to save money while having an enjoyable time, not to waste money unnecessarily. Once you get the SIM card, then you can just send a message to one of your family members back home telling them your new number.

3) Another one of the ways to save money is - Always be on the lookout for daily currency exchange rates and the places where currency is being exchanged. You can ask the hotel receptionist for this information. They would gladly help you out. Also, there is no need to exchange all your Dollars / Euros at once. Get them changed as and when the need arise. This will help you to save money in many cases. (Taking into account the law of averages - on certain days, the currency exchange rate can be favourable for you and on some days it might not be favourable for you to exchange currency).

4) For buying fruits / vegetables / water bottles etc, try to go in for big departmental stores. They can be found in the vicinity of the hotels and usually offer the least prices, as compared to any other shops / stores. So, while purchasing the daily necessities, do count this among the ways to save money.

5) Try not to eat in hotels all the time. Try to explore the local fast food chains / outlets in that country. They are usually very inexpensive as compared to the hotels. In this way, you would be able to enjoy the local cuisine, as well as save money on hefty food expenses.

Wish you an Enjoyable Journey...........

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