Foreign Transaction Fees, Foreign Usage Charges, Foreign Currency Conversion Fee - they are called many things, but they are the fees passed along to us by Credit Card Companies and Banks for using our money outside of our home country.

They range from 1% to 4%. Some are simply percentages of the amount of the transaction while others are percentages with a minimum fee of $3 or $5 for each transaction in a foreign currency. Some have different rates if it is a credit card charge vs a debit charge vs a cash withdrawl.

I have been researching credit cards that have the lowest fees so that Brett and I can hold on to as many of our hard earned pennies as possible.

What I have found:

Capital One does not have foreign transaction fees. I called and spoke to a supervisor to confirm that they are not called something else and with her reassurances, believe that there are no foreign currency conversion fees at Capital One.

Washington Mutual has a low 1% fee. I read on ThornTree that AbbeyZero has no foreign transaction fees but did not look into that claim.

What we will do:

We will use a Capital One credit card for all of our charges. We will pay off the balance each month from our savings account with ING Direct (currently earning just under 3% interest). We will use our local bank debit card for cash advances at ATMs. They have a 2% foreign transaction fee but they have no ATM fees worldwide. We get our account credited for the $2.50-$5.00 ATM fee charges that we are hit with for using an ATM outside of our banking network. Plus, the fee reversals are done by hand in our branch here in Indiana.

We found after our trip to Montreal that the bank employees get very confused when it comes to currency conversion rates. We withdrew $200 in Montreal from an ATM in Canadian Dollars. It appeared on our statement as $185 due to the currency conversion rate plus a $3.00 ATM fee. The bank credited us the $3.00 ATM fee plus $5.00 which they assumed was tacked on to our $180 withdrawl because ATM’s don’t issue $5 bills. So, in reality we made just fine as the $5.00 did more than offset the foreign transaction fee. We know that this will not happen each time we withdraw money but we do enjoy having a bank where the people know our names and are willing to help us if things go awry. We enjoy knowing that we can send mom into the branch on our behalf to dispute a charge or to fix a problem.