Credit-Card Fees Rudely Interrupt Vacation

NEW YORK ( TheStreet) -- American Express ( AXP), MasterCard ( MC) and Visa ( V) 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) 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), JPMorgan Chase ( JPM) and Citigroup ( C) each charge 3% for international-transaction fees. American Express charges 2.7% and Discover ( DFS), 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.

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