Foreign Transaction Fees

Credit card companies are one of the worst when it comes to charging their customers in an effort to make some extra money. One of the new fees they came up with over the last few years is the foreign transaction fee. It wasn't enough that they charged the merchants a few percent, they had to go on and

Here's what Citibank had to say about why they charge a foreign transaction fee (3%):

"We price our products to reflect the values we deliver in the marketplace. As we determined what this fee should be, we considered competitive, customer, franchise, and regulatory factors. In addition, we considered the added processing and servicing costs, as well as fraud liability associated with foreign transactions. Our research indicates that using Citi credit cards is 1 of the least expensive ways to purchase goods in a foreign currency.

Because of the changes that we have had to incorporate as a result of the new processes used by Visa and MasterCard to bill the conversion rate to us, we now consider the Foreign Exchange Transaction Fee to be an interest charge on purchases that were converted from another currency into U.S. Dollars."