Many travel sites and blogs have encouraged people to use their credit cards when traveling abroad rather than trying to use Traveler’s Checks. In many cities/countries, getting them cashed is a nightmare, which I have experienced years ago, but haven’t in the last fifteen. Since that time, I take my ATM card, but credit cards have always been a handy back-up when an itemized record of our spending has been needed on a monthly statement.
The glamor of credit cards started to diminish when all of the major banks started assessing a “currency exchange fee”. Diners Club/Mastercard confusingly call it a ‘finance charge’. I had to call them to find out this is what it really was since I pay it in full each month. Having a finance seemed to be an error on their part. Their only error was couching the fee is misguided terms.
Today, I received a special notice in the mail from American Express. As of January 11, 2009, they state “Transactions Made in Foreign Currencies section of your Agreement is replaced with the following: ‘in each instance increased by 2.7%'”.
Notice the word ‘by’ not up to. So in essence this is an increase above and beyond the 1.5% they have been charging all along. Don’t grab your calculator, it is 4.2%.
Though the dollar may be getting stronger once again and there are ‘bargains galore’ for the US traveler, it is similar to believing that now that gasoline has come down from $4.00 a gallon to $2.50, it is now a bargain, so drive more.
If Amex is taking this step, the others are sure to follow to cash in on the economic weakness. I am just waiting for Bank of America to say they are doing the same thing. They also charge a currency conversion fee in addition to a fee of $5.00 for every withdrawal not at one of their cooperating banks.