Are credit cards with “no” foreign transaction fees still scammy?

If you’re a credit-card skeptic like I am, then maybe you’ve enjoyed your front row seat to the rise and apparent fall of foreign transaction fees — those pernicious little extras tacked on to your cross-border purchases just because credit card companies can.

And perhaps you thought those new credit cards that promise “no” foreign transaction fees were the end of this shameful industry practice.

Well, sorry to disappoint you.

The shenanigans continue, and eagle-eyed reader Albert Sun knows, because he gives his card a workout when he crosses the border. His daytime occupation: tour manager.

Credit card companies have made a killing from these fees in the past. They’ve done a pretty good job of hiding the income on their annual report, burying them deep under “disclosure of sources of noninterest income” and creating an amorphous “foreign exchange income” category. But over the years, we’re talking billions of dollars and at almost no cost to the company.

“We generate a significant amount of our revenues from cross-border transactions, and our clients pay us fees in connection with them,” Visa cheerfully admits in its 2013 annual report. It predicts these fees will be a growing source of revenue in the future.

What’s really happening

Sun made several surprising discoveries just when he thought he’d eliminated his foreign exchange fee problem. His financial instrument of choice is a Marriott Rewards Visa Card issued by Chase. It prominently advertises “no” foreign transaction fees.

Turns out merchants have figured a way to game the system.

“When signing a sales slip in a foreign country, people need to first check the box that has the amount in the local currency,” he says. “The other amount, in the purchaser’s home currency, usually has around a 4.5 percent conversion fee added.”

“Always compare the statement amount to the sales slip,” Sun advises. “A lot of times the charge will get sent to Visa in your home currency, thus you end up paying the extra conversion fee.”

But wait, doesn’t Chase have “no” fees on its card? Yes, but that doesn’t apply to fees imposed by a merchant, at least not in the same way. Chase apparently has a policy of looking the other way when merchants add their 4.5 percent conversion fee to the dollar-converted bill, he says. (I asked Chase about this practice, but it has not responded.)

“Here’s the rub,” says Sun. “Chase Bank will not contest any amount over $10, instead offering to give a credit for the difference to those who catch this practice. The merchants know Visa won’t come back at them for anything under $10 so they know they can steal an extra 4.5 percent on purchases under $200.”

Who pays the 4.5 percent? You do, usually.

I asked Chase about this.

“It looks like what the customer experienced is Dynamic Currency Conversion,” Chase spokeswoman Rebecca Acevedo told me. “This is a process offered by the merchant’s bank. It’s up to the merchant to participate and they must disclose to the customer at the register what options are available.”

DCC, she explained, is the conversion of the purchase price of goods or services from the currency in which the purchase price is displayed to the cardholder’s billing currency. That currency then becomes the transaction currency, regardless of the merchant’s local currency.

I covered the dangers of Dynamic Currency Conversion a few years ago. Looks as if it’s still with us and still confusing customers.

What to do

There’s nothing wrong with playing the currency market, of course. But not like this. These fees, whatever their reason, appear to have no basis in reality. Tightening the credit card merchant agreement and revising credit card policies could end them.

In the meantime, your solution is pretty simple. Read your bill with care when you’re buying something overseas with a credit card. Just because your credit card claims you aren’t paying any foreign transaction fees doesn’t mean you actually aren’t.

There are workarounds — paying with cash or another alternate payment method. They’re all are worth considering before you take your next international trip.

Is "dynamic" currency conversion a scam?

View Results

Loading ... Loading ...

Underwritten by

Elliott Advocacy is underwritten by Cavalry Travel Insurance

Cavalry takes the worry of out travel by providing 24/7 access to medical and security professionals combined with the best medical evacuation and security extraction services. Cavalry gets you home safely when you need it most. Learn more at

Elliott Advocacy is underwritten by Seven Corners

Seven Corners has helped customers all over the world with travel difficulties, big and small. As one of the few remaining privately owned travel insurance companies, Seven Corners provides insurance plans and 24/7 travel assistance services to more than a million people each year. Because we’re privately held, we can focus on the customer without the constraints that larger companies have. Visit Seven Corners to learn more.

Elliott Advocacy is underwritten by Sodexo North America

Sodexo North America Sodexo North America is part of a global, Fortune 500 company with a presence in 80 countries. Sodexo is a leading provider of integrated food, facilities management and other services that enhance organizational performance, contribute to local communities and improve quality of life for millions of customers in corporate, education, healthcare, senior living, sports and leisure, government and other environments daily. Learn more at

Elliott Advocacy is underwritten by Travelex Insurance Services

Travelex Insurance Services is a leading travel insurance provider in the United States with over 55 years combined industry expertise of helping people dream, explore and travel with confidence. We offer comprehensive travel insurance plans with optional upgrades allowing travelers to customize the plans to fit their needs. Compare plans, get a quote and buy online at

Elliott Advocacy is underwritten by AirHelp

AirHelp is the world’s leading flight delays compensation company, helping passengers apply for compensation following a delayed or canceled flight or when boarding has been denied. It is AirHelp’s mission to fight for passenger rights by holding airlines accountable for flights disruptions that are out of passengers’ control. AirHelp has already helped 5 million people, taking the stress out of applying for compensation and making it as hassle-free as possible for travelers around the world.

Elliott Advocacy is underwritten by Allianz Travel Insurance

The Allianz Travel Insurance company has built its reputation on partnering with agents all around the world to provide comprehensive travel insurance for their clients. Contact Allianz Travel Insurance for a comprehensive list of coverage.

Elliott Advocacy is underwritten by Chubb

Chubb is the world’s largest publicly traded property and casualty insurance company, and recognized as the premier provider of insurance for successful individuals and families in the U.S. and selected international markets, offering coverage for high-value automobile, homeowners, recreational marine/aviation, valuables and umbrella liability coverage. As an underwriting company, Chubb assesses, assumes and manages risk with insight and discipline, and combines the precision of craftsmanship with decades of experience to conceive, craft and deliver the best insurance coverage and services to individuals, families and business of all size.

Elliott Advocacy is underwritten by Fareportal

Fareportal’s portfolio of brands, which include  CheapOair and  OneTravel, are dedicated to helping customers enjoy their trip. Whether you want to call, click, or use one of our travel apps, one thing is clear: We make it easy to take it easy.

Elliott Advocacy is underwritten by

An independent provider of low cost CDW/LDW insurance for use with rental cars. Up to $100,000 cover with no deductible. Policies available on a per day, per trip or per year basis. Also works with overseas rentals. Try  Insuremyrentalcar.comnow.

Elliott Advocacy is underwritten by Mediacom Communications

The nation’s fifth-largest cable operator, serving the smaller cities and towns in the Midwest and Southern regions of the United States. We are a high-performance broadband, entertainment, and communications company that brings the power of modern technology and quality customer experience to life inside the connected home by combining ultra-fast gigabit speeds with personalized local and over-the-top entertainment choices that fit your lifestyle. Details at

Elliott Advocacy is underwritten by Arch RoamRight

Arch RoamRight is one of the fastest growing, most-highly rated travel insurance companies in the United States. Travel advisors love working with us, and travelers feel protected with our trip cancellation and travel medical insurance coverage. We also make it easy to file a claim online with our fast, paperless claims website. Learn more about RoamRight travel insurance.

Elliott Advocacy is underwritten by Virtuoso

The leading global network for luxury and experiential travel. This invitation-only organization comprises over 1,000 travel agency locations with 17,500 advisors in over 45 countries, and holds preferred relationships with 1,700 of the world’s finest travel companies. Virtuoso advisors collaborate with their clients to create personalized itineraries featuring exclusive perks, while also providing advice, access, advocacy, and accountability. For more information, visit

Elliott Advocacy is underwritten by VisitorsCoverage

As a company that is constantly striving to simplify travel insurance, VisitorsCoverage, is on a mission to help travelers make the better decisions about purchasing travel insurance, quickly. VisitorsCoverage has helped millions of travelers globally to buy the suitable travel insurance and explore the world with confidence. Get insurance for your next trip at  VisitorsCoverage. Lowest Price Guaranteed.

Elliott Advocacy is underwritten by MedjetAssist

Medjet is the premier global air-medical transport, travel security and crisis response membership program for travelers. With a MedjetAssist membership, if you become hospitalized more than 150 miles from home, we will get you from that unfamiliar hospital all the way home to the hospital you trust. All you ever pay is your membership fee. MedjetHorizon members add 24/7 personal security and crisis response benefits. readers enjoy discounted rates. Travel safer with  MedjetAssist.

Elliott Advocacy is underwritten by Southwest Airlines

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth.

Elliott Advocacy is underwritten by makes it fast and easy to compare and buy travel insurance online from top rated providers. Our unbiased comparison engine allows travelers to read reviews, compare pricing and benefits and buy the right policy with a price guarantee, every time. Compare and buy travel insurance now at

Elliott Advocacy is underwritten by Squaremouth

Squaremouth helps travelers easily and instantly compare travel insurance policies from all major providers. Only companies that meet the strict requirements of Squaremouth’s Zero Complaint Guarantee are available on the website. Compare policies on to save over 70 percent on your next purchase.

Elliott Advocacy is underwritten by Travel Leaders Group

Travel Leaders Group is transforming travel through its progressive approach toward each unique travel experience. Travel Leaders Group assists millions of travelers through its leisure, business and network travel operations under a variety of diversified divisions and brands including All Aboard Travel, Andrew Harper Travel, Colletts Travel, Corporate Travel Services, CruCon Cruise Outlet, Cruise Specialists, Nexion, Protravel International,, Travel Leaders Corporate, Travel Leaders Network and Tzell Travel Group, and its merger with ALTOUR. With more than 7,000 agency locations and 52,000 travel advisors, Travel Leaders Group ranks as one of the industry’s largest retail travel agency companies.

Elliott Advocacy is underwritten by Travelers United

If you’ve been mistreated by the airlines, Travelers United is your voice in Washington. Join the #1 travel advocacy organization working with Congress to improve and protect travelers. Plus, get $400 of annual benefits you can use for travel for only $29/year. Add your voice to ours. Make travel better.  Join today.

Send this to a friend