Credit card charges gone wild: “international transaction fee” added to Puerto Rico purchase

Now it’s gone too far.

When Leticia Lopez returned to Albuquerque from her trip to Puerto Rico, she found an “international transaction fee” added to every purchase on her credit card bill.

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See the problem?

Puerto Rico isn’t an international destination. It’s an unincorporated, organized territory of the US with commonwealth status — meaning you pay in dollars and don’t have to show a passport before being let on the island.

Lopez is furious.

I have paid such fees in the past when I have used my Visa card in many countries I have visited and understand that it is warranted in those cases because there are different currencies that have to be converted.

However, in Puerto Rico, there is no other currency but the U.S. dollar. I contacted State Farm Bank and pointed this out to them, as well as the fact that I did not have to use a passport to travel to Puerto Rico nor go through international flight immigration and customs there or on the return.

They insisted that Puerto Rico is international travel, and would not remove the $16 fees in international transaction fees.

Adding an “international transaction fee” to Lopez’ bill is nothing more than a money grab by her credit card company. I suggested that she appeal this decision, which she’s in the process of doing.

This is just the latest in a series of abuses by credit card companies in the wake of credit card reforms that will take affect later this year. I’ve mentioned international transaction fees in several previous posts, including this one. The Center for Responsible Lending also has a thorough report on the issue.

How does this affect you? Now more than ever, it’s important to review your credit card bill often, particularly when you’re traveling. (My credit card company just changed its terms and conditions, and odds are yours has, or will.) These revisions are designed to extract more money from you. And travelers are an easy target.

Dispute any funny fees immediately. If your credit card company insists on boneheaded charges like an “international transaction fee” for purchases in Puerto Rico, dump the card and find a better one.

Update (Jan. 11): Lopez’ bank has responded.

As stated in your Credit Card Agreement and Disclosure Statement, if you use your card to make an international transaction, we will assess a FINANCE CHARGE equal to 1.0% of the U.S. dollar amount of the transaction. An international transaction is defined as any transaction that was acquired in any country other than the United States. Puerto Rico is still considered a Latin America country as it pertains to currency conversion–thus the fee is charged. Visa charges State Farm Bank Visa, along with ALL other issuers for cross border transactions thus being the reason for the charges which were placed on your account.

As a courtesy, I have waived the amount of $16.81 total International Transaction Fees from your account. I do need to strongly caution you that if you use your State Farm Bank Visa card in Puerto Rico that there will be International Transaction Fees and we will not be able to remove from your account.

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