What can discourage you from applying for credit card?
One of the key points you pay attention to when applying for a credit card is its rates, fees and other charges. And the more enticing are credit card’s terms, the more willing you are to complete a credit card application and send it in.
With so many attractive online credit card applications for best reward credit cards (gasoline credit cards, hotel credit cards or airline miles cards) and credit cards with cash back, you most often find it irresistible to apply for credit card to make your money work for you and multiply your wealth.
To attract more customers, credit card companies and banks are ready to afford satisfying all your requirements. Remember, the client is always right. Thus, the best credit card applications anticipate your possible request for lower rates or additional programs, so, you as a responsible credit card holder with good or excellent credit history can always count on something better.
But there’s one thing true to Visa and MasterCard credit card offers that can discourage you from getting a credit card. And it’s not even a sudden rise in credit card’s charges of which so many credit consumers are afraid but it is an innovation most likely to stay forever. And most likely it will affect frequent travelers abroad.
What we are speaking here about is the foreign transaction fee for credit card purchases made abroad. Well, yes it is a vexing measure but an indispensable one and it shouldn’t disappoint you as, protecting you bank’s money, it protects yours.
It may be difficult for you to understand how a foreign transaction fee guarantees safety of your credit card issuer’s money and you only see the result of such a policy which, naturally, annoys and angers you.
We are here to make it clear for you why you get charged this foreign transaction fee each time you go abroad and mean to carry out whatever money operation there. On realizing the aim and effectiveness of the measure, you’ll most probably treat it more loyally and won’t be stopped by it in making credit decision – apply or not apply…
Well, as things are, credit card companies experience higher costs on any types of transactions carried out beyond US birders. And in order to compensate for them, your card issuer introduced foreign exchange fees to protect them from possible losses.
So, the part of the essential risk of credit card charges made abroad is becoming more significant and menacing… Put yourself in the place of your credit card company and you will fear such things as incorrect conversion of currency, merchant charge backs and extended fraud. And they would most naturally force you to think of some device to prevent your money from unreasonable flow.
And that’s what your creditors do – guard their and, consequently, your money. How much is the fee and is it exposed to changes? For today, the foreign exchange fee equals to a flat 3% based on the total transaction cost including VAT and foreign sales taxes and is not likely to be raised or abolished.
Are going abroad and upset about this unexpected rise of expenditure connected with your credit card’s new charge? There are some options for you to consider but be careful as they can also carry some restrictions and traps. One of the options is to carry checks with you, which are convenient only in terms of usage, another is to use a prepaid debit card which acts like a real credit card but does bear definite restrictions and you should learn about them before you start out.
Currently, there’s only one bank allowing you to use your credit card without being charged a foreign exchange fee when abroad. If your credit card was issued by Capital One, you are certainly superior over other credit card holders and thus you can make the most benefit and joy out of you travels abroad.