I was traveling overseas recently, and didn't get around to telling my credit card company that I was going until I was already gone. So I logged into their website to send a secure message from my account. A couple days later, I got a reply that was pleasant enough, and they said for security reasons, I have to call them to confirm my overseas status.
Later on, down in their message, they were kind enough to remind me of what to expect if I use the account outside the US. Here's what they said:
Additionally, please be aware that if you use your card for retail purchases at foreign merchants or for cash withdrawals from foreign ATMs, our Foreign Transaction Fee will apply. For transactions converted to U.S. Dollars, we will add a Foreign Transaction Fee of 3% times the resulting U.S. Dollar amount. If your foreign transaction is processed by Visa and is in, or converted to, U.S. Dollars prior to being processed by Visa, we will add a Foreign Transaction Fee of 2% times the U.S. Dollar amount.
I don't recall what their Foreign Transaction Fee is, but it wasn't much. I don't recall ever seeing one before traveling overseas this year; I'm inclined to think it is one of those "junk fees" that banks are imposing on nearly everything these days.
What really caught my eye starts with the second sentence. The first sentence:
For transactions converted to U.S. Dollars, we will add a Foreign Transaction Fee of 3% times the resulting U.S. Dollar amount.
To me, this sounds like they want to be the ones to do the currency conversion. If the merchant does it for you, such as was offered to me at the counter at Harrod's in London last June, they will tack on 3%. Or, if I were to have a transaction in dollars, and happen to be overseas, they tack on 3%.
The third sentence is a bit more mysterious.
If your foreign transaction is processed by Visa and is in, or converted to, U.S. Dollars prior to being processed by Visa, we will add a Foreign Transaction Fee of 2% times the U.S. Dollar amount.
This sounds a lot like the situation described in the first sentence, which to my understanding is if the transactiontakes place on non-US soil, they'll add a fee. Now the second sentence, the way I read it, says that they will tack on a fee if you have a transaction that's done in dollars, but not on US soil.
But upon reading it again, it seems to me that the third sentence means that instead of the standard Foreign Transaction Fee, if you have a transaction overseas that's in US dollars, then the FTF jumps to 2%.
I wonder why they do this. I'm sure it must be just to take a little off the top. Any way the banks can.
So this goes to show, if a merchant outside the US offers to charge your card in US dollars, instead of seeing it as a convenience, look at it as a way for (probably) the merchant to make a few pence on the transaction, and your credit card company too. And decline. When in Rome, and all that.