Currency Conversion Fees
Financial Management

Currency Conversion Fees

While reading through all of the fine prints in the credit card offer that I received, an interesting line that caught my attention was how I would be charged a fee for all transactions that are conducted in a foreign currency. I’ve personally had no knowledge of this type of fee before as I have made many purchases in locations such as the US. So, I decided to do a little research on the topic and was surprised to see that virtually every major credit card company has this fee and that there was a lawsuit in the past about it.

Apparently what was going on was that most of them would have a fee of say one percent of the total purchase cost. Instead of displaying this fee separately to clearly inform the card user of it, the fee is actually incorporated into the final total. Like many others, whenever I see the converted total on my bill I just automatically assume that it only consists of what the current currency conversion rate is. I guess I must of been a bit too anxious when I first got my credit card, which was right when I was at a legal age to get one, because I didn’t remember reading about such a fee and would of definitely thought twice before making a foreign purchase with it. I bet that would of saved me some money if I was fully aware of it before.

This just goes to show you that hidden fees/charges are everywhere as companies have to make money somewhere and that making sure you understand your service contracts can go a long way in helping you to save money.

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