Every major U.S. credit card company with the exception of one charges a two to three percent foreign transaction fee when you use your credit card abroad. Until recently, many credit card companies did not clearly disclose these fees in their terms and conditions. Consequently, many people received a notice of a class action lawsuit settlement in regards to these fees earlier this year. Now that the lawsuit has been settled, credit card companies are required to clearly state foreign and international transaction charges on credit card applications. Here, we will look at ways to minimize and avoid these fees.
First, if you do not know how much your current credit card company charges for international transactions, contact customer service to find out. The vast majority will inform you that this fee is three percent. With the US dollar sagging, paying an extra three percent on every purchase can really hurt the wallet. Fortunately, there are a few ways to avoid these charges.
If you have cash available, using a debit card eliminates this fee. Most banks do not tack on a transaction fee for ATM withdrawals. Plus, the foreign currency rate you’ll get from your bank is often significantly better than what you would get at a foreign currency exchange booth. Again, exchange rates and potential fees vary from bank to bank, so it is important to call ahead.
While ATM withdrawals are generally free of foreign transaction charges, using your debit card as a credit card comes with some risks. First, a credit card provides much better fraud protection than a debit card. If, for example, an unscrupulous merchant overcharged or fraudulently used your credit card, you can easily contest the charges and get a refund. If, on the other hand, you debit card was fraudulently used, you will not only be faced with a depleted bank account, but it often takes a great deal longer to get your money returned. For this reason, using a debit card to make purchases abroad can prove risky.
Ultimately, the only way to pay no international transaction fees is to use a credit card doesn’t charge these fees. By using a no fee credit card, you get the security a credit card provides without the annoying added expenses.
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Credit card debt settlement is what you can get when you do not have the means to pay your debt in full, nor pay your debt in the increments that you were given to pay monthly. You are allowed, depending on the circumstances and the credit card companies, to pay only a certain percentage of your total credit card balance off, rather than the entire thing. Sound like a dream come true? This type of payment requires a little bit more desperation and is a little more difficult than it looks.
Credit card companies will not allow just anyone to get a credit card debt settlement, but if it is necessary, it is possible. Credit card companies will accept a payoff of a certain percentage of your credit card debt as a whole if the circumstances are right and the criteria is met. Here are a few conditions you have to go by before you can get a credit card debt settlement.
A credit card company will look at your credit report and how well you are doing with your credit. If you have bad credit and are not in a position to continue paying your bills, you have made several mistakes on your payments that have racked up your interest rates to a ridiculous percentage, and if you already have several previous late payments, they will probably allow you to pay a percentage of your overall debt to get it paid off. Because of this, you are less of a risk to them, and they will probably, in the long run, be getting the most money out of you that they can.
The reason they will allow or even offer you a chance to get your credit cards paid off with a debt settlement just by looking at how disastrous your credit history is, is because they don’t want you to go bankrupt. By getting you to pay a percentage of your debt off and forgiving the rest, they at least get some sort of payment from you. If you file for bankruptcy, you are left with no debt, and they are left with no money from you. So because you are at high risk of filing for bankruptcy, they determine that they are doing the best thing for their company by having you pay at least a percentage of what you owe altogether.
Going bankrupt is a bad thing for the creditors, unless of course, before you do so, they decide to take your case to court and sue you for not making your credit card payments. In this case, they may deny your request for a percentage payoff, depending on your income and assets. If they do not believe they are going to get much of value out of you by suing you, they won’t do it, and they will probably accept your appeal for a settlement. The credit card company will always go with the option that will get them the most amount of money possible.
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