Credit card foreign transaction fees are fading

AUSTIN, TEXAS - The number of no-foreign-transaction fee cards is continuing to rise, a review of all consumer credit cards offered by the nation's 12 biggest issuers reveals.

Survey findings include:

• Among all 12 issuers, 37 percent of credit cards currently offered (60 of 163) don't impose a foreign transaction fee.
• Four major issuers - Capital One, Pentagon Federal Credit Union, HSBC and Discover - do not charge any of their consumer credit cardholders foreign transaction fees, regardless of card type.
• The other eight have a mixture of fee and no-fee cards, but the latter have become far easier to find. They make 38 no-foreign-transaction-fee credit cards available, compared to the 21 offered in 2012 - an 81% increase.
• The most common fee is 3%, though American Express charges their cardholders 2.7%.

Foreign transaction fees are typically charged to cardholders when they purchase items while overseas or use an overseas bank to process a transaction.

Many consumers are unaware of the potential fees they could incur while traveling abroad. In an earlier survey, CreditCards.com found that 33% of credit card holders didn't know if their card charged foreign transaction fees.

With greater accessibility of no-foreign-transaction-fee cards, there's no reason for the average consumers to endure unwanted fees. Three years ago, foreign-transaction-fee-free cards were largely targeted to the upscale traveler. Now, they are becoming a feature in run-of-the-mill cards.  Even a few student cards are available without foreign fees.

"This means many Americans don't have to settle for paying these unnecessary fees anymore," saidMatt Schulz, senior industry analyst at CreditCards.com. "The strong dollar has already made foreign travel less expensive, but if you shop around for the right credit card, you can slash your costs even further."

To cut down on fees, travelers should opt for a debit card rather than their credit card if they need to withdraw cash while abroad. A majority of the surveyed card issuers that also serve as banks charge higher credit card cash advance fees than they do for debit ATM cash withdrawals. Banks are also more likely to have foreign ATM networks for debit card holders to access rather than for credit cards.