For credit cards, there has been a "new" twist on foreign transaction fees. For most people, the foreign transaction fee is understood to really be a "conversion fee" to convert purchases in foreign currency to local currency. NOW, some credit card companies are defining "foreign transaction fee" more literally, i.e. - a fee on a transaction made in a foreign country, regardless of currency used. I've seen this pop up more and more on credit card agreements. You need to read the fine print to see how the credit card company is defining "foreign transaction fee"

For example, this is the terms in US Bank:

Transaction Fee INTEREST CHARGE of up to 3.00% of the Purchase transaction or up to 3.00% of the ATM transaction. If your foreign transaction is in or converted to U.S. Dollars prior to being processed by Visa, we will add a Foreign Transaction Fee INTEREST CHARGE of up to 3.00% of the Purchase transaction or up to 3.00% of the ATM transaction.

If you read closely, it doesn't matter what currency is used to initiate the transaction - all that matters is where the vendor is located. Even if the foreign vendor processes the transaction using the local currency, it's still subject to the 3% charge. I got caught in this scenario and immediately cancelled the card.