Citi Bank's change of terms for their Master Card states they are changing their fee for foreign purchases....3% of the dollar amt. Is this an increase from the present fee? Or does it mean the TOTAL fee from foreign purchases will be going from 3% to 4% (including Master Card's 1% fee)?

3% same as before. The only change (actually it has been a gradual roll-out on various cards since 6 or 9 months ago), is now even the foreign transactions are in USD, as long as the Merchants are foreign, or the Merchants processing process are foreign, you will still be charged the 3% forex fee, regardless.

Hence, if you buy a ticket, say, from LAN online, in USD, but LAN processes it outside U.S., you get billed the 3% forex fee.

Therefore, one should be really careful to UNCHECK the box on any online purchases when there are options to be billed in either local currency or USD. Too often, the default box is the USD, and if you dont catch that, you are screwed. The merchant usually charges 5%+ to convert the local currency to USD (Dynamic conversion), and then your card issuer charges you another 3%. It is not just Citi, virtually all major issuers charge such.

The only cards I know dont charge such, would be the CrapOne card and the newly introduced Schwab Visa.

A bit OT, dont ever trust AMEX's claim of 1% - their conversion rates are often far HIGHER than 1% if you use the historical data on Oneda or FX sites to verify such. AMEX is very deceiving in claiming its 1% fee.