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Credit-Card Fees Rudely Interrupt Vacation

Credit-card fees add up when you travel abroad. Here's how to get fees down to zero.

NEW YORK (TheStreet) -- American Express (AXP) - Get American Express Company Report, MasterCard (MC) - Get Moelis & Co. Class A Report and Visa (V) - Get Visa Inc. Class A Report charge your bank (usually 1%) to convert dollars to the local currency when you travel. The bank that issues your card also charges a fee for the transaction (typically 2%). That makes vacations more expensive.

Choosing the right credit card can help cut costs. Travelers can avoid this fee by comparing credit cards and choosing the right card before they leave home.

Capital One

(COF) - Get Capital One Financial Corporation Report

currently is the only major issuer that doesn't charge a foreign-transaction fee. In addition, the

Pentagon Federal Credit Union

recently eliminated the 2.5% international-transaction fee from the

PenFed Premium Travel Rewards American Express card


Bank of America

(BAC) - Get Bank of America Corp Report


JPMorgan Chase

(JPM) - Get JPMorgan Chase & Co. Report



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TheStreet Recommends

(C) - Get Citigroup Inc. Report

each charge 3% for international-transaction fees. American Express charges 2.7% and


(DFS) - Get Discover Financial Services Report

, 2%.

Using a credit or debit card at foreign ATMs also adds fees. Before departing, ask your bank what the charges are for foreign-money transactions and "foreign" ATMs. The ATM may charge its own fee for withdrawals. If you plan to use your debit card, contact your bank to see if they have partner banks in the areas you're traveling. Partner banks may waive withdrawal fees. Bank of America is a member of the Global ATM Alliance Bank, which waives the fee if your bank is a member.

ATM fees on international transactions vary. At this time, Bank of America charges a $5 withdrawal fee, plus a 1% international-transaction fee. JPMorgan Chase assesses a $3 withdrawal fee for non-JPMorgan Chase withdrawals outside the U.S. plus a 3% conversion fee. Citigroup charges a 3% fee after conversion to American dollars, plus $1.50 per transaction.

Here are some other credit card tips for international travel:

1. Cash advances:

Avoid using your credit card at an ATM to get cash. The fee is typically 3% or $10, whichever is greater. You will also immediately be charged the much higher interest rate for cash advances. The cash advance rate can be as high as 25% for some issuers.

2. Take a second card:

Keep in mind that not all cards are widely accepted. If American Express is your primary card, have a MasterCard of Visa as a backup. Discover doesn't have an extensive network in Europe.

3. Notify your bank and credit card issuer about your trip:

While you're asking your bank about foreign-transaction fees, tell them you'll be using your card while traveling out of the country. Otherwise, the foreign charges may raise a red flag with your issuer, and a freeze could be placed on your account.

4. Take the phone numbers for contacting your bank from outside the U.S.

5. You don't have to leave the U.S. to be charged a foreign-transaction fee:

Issuers recently broadened the definition of a foreign transaction. It's no longer limited to a purchase in a foreign country. Some issuers now charge a 3% foreign-transaction fee on transactions made or processed outside of U.S. Making a purchase in the U.S. could cost an additional 3% of purchase if that online merchant is in another country. Previously, the fee wasn't added when foreign transactions were made in U.S. dollars.

-- Reported by Bill Hardekopf of

Bill Hardekopf is the chief executive officer of

, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."