Credit card foreign transaction fees in Italy

You'd pay a 3% foreign transaction fee on all purchases with this Chase Visa card (and many others), Credit card foreign transaction fees, Italy, Italy (Photo courtesy of Chase Bank)
You'd pay a 3% foreign transaction fee on all purchases with this Chase Visa card (and many others)

What are foreign transaction fees and how can I avoid them?

While paying with credit cards does get you a better exchange rate than with cash, know that Visa itself imposes a 1% "commission" for foreign purchases/cash advances.

Many Visa-issuing banks—recognizing yet another good way to fleece its own customers—tack on additional 1%, 2%, or even 3% "commissions" of their own.

They will tell you this is a banking fee for performing the currency exchange.

They are lying.

This is because:

  1. The Visa corp has already performed the currency exchange before the transaction ever gets to your issuing bank (which receives the transaction in dollars), and
  2. It's all electronic, so there's really nothing to "exchange" in the first place.

These extra few percentage points your bank is charging is 100% profit for them, pure and simple, and they are stealing it from you.

Luckily, there is a way around this: a low-fee credit card.

 

Related

There are better credit cards for travel out—there some you can even design yourself (I just thought this one was funny) (Photo by Ross Angus)

Where to get a low-fee credit card for traveling