Hi,

I am not sure if this has been answered somewhere. For these credit cards with foreign transaction fees, when will it be applied? I know if the transaction is not in USD then it will definitely apply. However in some cases it also applies such like buying ticket on ba.com. Booking a hotel on expedia doesn't matter, but what about booking a ticket on expedia originating outside of US? Thanks.

If the transaction is processed outside the USA then you'll get hit with the fee regardless of currency. If you use expedia's US site you won't get the fee. If you use their overseas sites you'll get your purchase processed outside the US and incur the fee.

A side note: To get around this, if possible get and keep one of the many credit cards that have no foreign transaction fees, among them are these Chase cards: Hyatt, Marriott, IHG, BA, UA, Sapphire, Ink. And there are many others from all the major issuers.

If outside the US, you also want to look at dynamic currency conversion (DCC) as that will compound the problem, which is basically the merchant converting the charge to another currency (yours) for your convenience, but at less favorable rates than if you allowed your credit card company to do so.

The simple rule on this is: if a foreign merchant offers to process your CC transaction in USD or the local currency, always pick the local currency! If they don't offer, make sure to ask for it anyways! The POS device will have a much worse exchange rate than your CC that offers no FTF.

I don't know the exact mechanism but the charge is put on by your bank at the time it prepares that billing cycle's bill. Both Citibank and Chase list the foreign transaction fees on those cards to which it applies as one separate transaction at the end of that month's charges.

Incidentally, if you book a foreign airline that processes its mc/visa transactions at a bank outside the US, even if you use a US agency like Orbitz, they nail you for the fee.

If the exchange rate is shown have a look at it though. I was offered it in flight on a flight on by UK card a few months ago and the exchange rate obviously hadn't been updated (As its not a live link, I guess it doesn't get updated very often) and I got about 1.60 for GBP to USD, when at the time it was around 1.49/1.48.

You are confusing foreign transaction fees with foreign currency fees.

There are some credit cards that have foreign transaction fees, and others that have foreign currency fees.

Cards with foreign currency fees will not charge you forex for an online purchase from an overseas company which bills in your local currency. (If they bill in your local currency "naturally" that's ok. If they use DCC, that's bad, but that's another story.) They will also not charge you forex for purchases made while visiting another country that uses the same currency as your home country.

Cards with foreign transaction fees will charge you forex if the billing is from overseas, even if the purchase is in your home currency. You have to be careful because the fact that billing is overseas may not be obvious (for example, a foreign airline that has a US website may bill in the US or may bill overseas, depending on the specifics).

Now, if you want to avoid both, here's a thread that can help you find cards that don't have either:

http://www.flyertalk.com/forum/credi...tion-fees.html

(The first post in that thread has a summary of the cards available.)

The key word is Transaction. Transaction that is processed outside US. When that happens, regardless where you make your purchase, it is subject to Foreign Transaction Fee.

The most common mistakes I see friends made are the following:

1) Buy tickets on Domestic airlines websites, such as JetBlue, that includes International airlines segments - rather, their tickets are a combo of JetBlue flights and Aer Lingus flights for example. Well, the Aer Lingus portion is processed Outside US. So my neighbor was nailed with over $30 forex fee using her 3% forex fee Citi card while she could use her C1 0 forex fee card to pay for the tickets.

2) Booking hotel rooms on sites such as Agoda, Venere etc that operated outside US, and saw their bills in USD, thinking they would not incur fee.
Well, the sites process transactions outside US. Agoda is a Thailand based company for example. So they got hit forex fee and complain about it, not realizing their total misunderstanding of the Description of the fee - it is based on where the Transaction takes base - has nothing to do with Currency. It took me like 5 email exchanges to finally get a friend understand that when she books a hotel on Agoda she should use her Sapphire Preferred instead of her SPG or PRG...

3) Booking awards on BA USA when the taxes are charged in USD but it is billed by BA's UK office. Again, they got hit by forex fee.

The best way to handle it is to have at least one or two 0% forex fee cards and always use those to book your travels whenever you suspect the transactions might be processed Outside US.

I thought agoda has already been purchased by some US company and now it's already US-based?

I recently registered at Agoda as I found a room at Stuttgart that was a better deal than for me to use SPG reward at Le Meridien. The confirmation email of account registration came from a Thailand-based operation. I dont want to take a chance to find out if its transaction is processed within US or remained outside US. My assumption is, even if it is bought by some US company (Priceline in fact, in 2007, which bought Booking.com), there is no need to change the operation just because now it is US-owned. If so, the transactions remain being processed outside US just like before.

By your logic, Expedia and Priceline are US based company, yet if you buy from Expedia.CA, you would be charged forex fee by your CC, ditto for from other Priceline sites that is not Priceline US.

This is found right on Agoda's website, under Policy:

About Agoda

Agoda(agoda.com) is an online hotel reservations service which specializes in securing the lowest discount hotel prices in Asia. Agoda is part of Priceline.com (Nasdaq:PCLN). Based in Singapore with operations in Bangkok and the Philippines, Agoda's network includes 10,000 hotels in Asia and more than 150,000 worldwide. The staff of 300 professionals provides a first-rate reservation service that uniquely combines local knowledge and local connections to provide the best hotel deals to both business and leisure travelers.

Who owns the company does not matter. What matters is, where the transaction is processed.

Years ago DL has some of its payment process outside US, I forgot whether it is in Ireland or where. People got hit with forex fee buying a domestic ticket on DL website! It took some calls to dispute and subsequently got those forex fees removed - the incidents were posted on FT when the law required the forex fee was required to be a separate line item shown on the card statement just came into effect. Before the law, it was built in the exchange rate. I think the law became in effect like 4 or 5 years ago or even longer as a result of several class lawsuits. Last year we finally gotten the refunds of those class lawsuit.