Is The Currency Exchange Fee High?

You might not even realize that you are paying a great more deal as currency exchange fees. Perhaps the credit card company you are using is making a killing off the money you spend on your foreign vacation or other needs to exchange currencies. Is the currency exchange fee high? Let us find the answer to this question.

Generally speaking, every time you exchange currencies, you have to pay a "foreign currency-conversion fee," or the currency exchange fee. Normally, the well known network of Visa or MasterCard, charge 1 percent as currency-conversion fee, which is a good deal as exchanging your currency in almost any other manner will probably cost you a lot more and you will pay a high currency exchange fee.

But today, many credit card issuers and banks are cashing in, as they have added up to a 2-percent charge on top of that 1 percent without doing a thing to earn it. This means that one could be paying up to 3-percent extra when ever you use your credit card or the bank services. When the banks, who were the issuer of these cards, were asked to give an explanation, they refused to give any. These are some of the reasons for high currency exchange fee.

As these credit card companies failed to disclose currency exchange fees on their credit card statements, the recent lawsuits brought by consumers have begun to change the scene a bit. Some of these credit card companies have now started issuing statements to identify the currency exchange fees and the structure of hoe their customers will be charged.

The breakout of the currency exchange fee could have an impact on the market. But until that happens, one should search around for the best options to exchange currency, ask questions about any hidden fees. If your broker says that there will be no currency exchange fee, think again. He is exchanging currency for you, charging a percentage for the service, and passing along that charge to you through his merchandise.

Most experts agree that despite the conversion fees, using plastic abroad is still the cheapest way to make purchases, especially when you consider hefty charges on travelers' checks and money exchanges.

Are there any better ways? Look for credit cards that do not have a currency exchange fee. Use a bank or debit card, which is often the best way to go. Travelers' checks are still popular. Don't exchange money from one currency to another more than once.

Why is currency exchange fee high? We hope you have some answers now.

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