I first heard rumblings about changes to foreign transaction fees last week. A reader wrote in a complaint about her credit card charging a 3 percent foreign conversion fee on an international airline ticket purchase made online in U.S. dollars. Here's an excerpt from her email:
fee (~$150) on my online purchase of tickets with Malaysia Airlines
recently. The online purchase took place in New York at work. I had no
idea of this new rule until I read the credit card statement. I called Citibank
customer service, they'll not waive the fee because Malaysia Airlines is a
foreign-based company. I kept telling them I did the online internet purchase in
NYC not outside U.S., and I should not be charged for the extra fee.
It seems like a fluke – but these days, don't put anything past the credit card companies. Then I got a letter from Bank of America confirming my suspicions. You can click on the image to read the scanned version. Here's the text of the notification:
Amendment to Your Credit Card Agreement:
Effective on June 1, 2009, we are replacing the definition of "Foreign Transactions" in the section of your agreement titled Words Used Often in this Agreement with the following:
"Foreign Transaction" means any transaction made in a foreign currency, and any transaction made in U.S. dollars if the transaction is made or processed outside of the United States. Foreign transactions include, for example, online purchases from foreign merchants.
Blerg. Foreign transaction fees were already one of the more heinous credit card charges – the fee amount is usually buried in with the converted currency amount and is very difficult for a traveling cardholder to identify.
Now it sounds like you'll have to worry about picking out these fees from purchases made within the United States too. In particular, watch out for booking flights or hotels with international companies or shopping online with merchants that aren't based in the U.S.
It's difficult to tell from this disclosure exactly what will count as a foreign transaction. If you spot a foreign transaction fee on your credit card statement for a purchase made from within the U.S., please share your report with us by email or in the comments section below. We'd love to compile a list of retailers and companies that are adopting this new definition as they conduct their business.