Credit cards

I have been reading with great interest readers’ reports about credit card/debit card use while traveling. I travel a fair amount and have always used my debit cards (business and personal), for reasons like not having to pay monthly bills; getting money from ATMs; avoiding extra exchange fees (with a debit card I get the commercial exchange rate, not just the regular “bank” rate at an airport or hotel desk), etc. However, following a trip to Hong Kong in March ’06, I noticed a huge foreign transaction fee charge on my statements: three percent!

When I called my bank to complain, they said it was Visa’s charge and they could do nothing but suggest I get a regular credit card. (This was the Comerica Bank in Detroit, but I checked with a few other large banks and they all had this charge.)

When I applied for this bank’s suggested “regular” credit card and read the fine print, I noticed that the Visa and MasterCard programs also charged a foreign transaction fee of 3%, so why would getting a credit card be good for me? Plus getting money from an ATM with a credit card would add a surcharge above what I’m charged using a debit card. As I explored using a credit card for a “cash advance,” I found I could be charged 19%.

In April ’06 I was three weeks in Australia and took cash (Australian dollars, not travelers’ checks) that I got ahead of time at a different, local bank. The conversion cost me a flat fee of $10. Upon arrival, I used my Comerica Bank debit card again to pay for hotel, food and shopping and to get more cash from ATMs. Needless to say, having 3% added on top wasn’t what I bargained for and cost me about $200.

I am also a member of the Dearborn Federal Credit Union in Detroit, Michigan, so in May I called them and asked about their debit card’s foreign transaction charge, which, it turns out, is only one percent! You can bet I switched to them for my checking, savings and business services.

By the way, if I use my credit union debit card to pay for a trip, it provides for Chubb lost-baggage insurance and death benefits — something I hope to never need but which is nice to have.

After using the credit union debit card on a trip to Sydney in June ’06, I checked my statements and confirmed that the foreign transaction fee was, indeed, only 1%. In September ’06, on another trip to Sydney, I used my credit union debit card to pay for my hotel, a rental car and some food, again being charged just the 1% foreign transaction fee. (FYI, you can use a debit card to rent cars, although some places require showing a round-trip airline ticket receipt. Check with the rental company for details.)

No more credit cards for me — I don’t need the extra charges, miles (which we end up paying for) or other purported benefits that credit card companies supposedly give. I suggest readers call their own local credit unions and inquire about membership requirements.

JULEE ROTH
Snowmass Village, CO