April 8, 2014 at 12:28 PM ET
Pay with your credit card when you travel abroad and you may find an unwelcome souvenir from the trip when you open your statement: a foreign transaction fee.
Many travelers fume at being charged an extra 3 percent or so of their international purchases, so some credit card issuers are now getting rid of the fee, prompting others to follow suit to stay competitive.
“It’s just a money maker, pure and simple. They charge it because they can,” said Brian Kelly, founder of ThePointsGuy.com, a website that focuses on maximizing credit card and travel rewards.
“How dopey is that — to have a card for international travelers where you get penalized for using it internationally.”
American Express is removing foreign transaction fees — which currently amount to 2.7 percent — from its consumer and business Delta SkyMiles credit cards as of May 1. The move is “a perfect way to add value for card members,” said spokeswoman Elizabeth Crosta.
The new Hawaiian Airlines World Elite MasterCard is also skipping foreign transaction fees.
The United Airlines-branded credit card from Chase got rid of the fees last year, which likely motivated Delta to follow suit, Kelly said.
In making the move, issuers are hoping to avoid annoying their best customers, said Matt Schulz, senior industry analyst at CreditCards.com.
“In a lot of ways, the folks who would care about these foreign transaction fees — the ones who are traveling overseas and have the expendable income to do those sorts of things — would be exactly the people who the credit card issuers would want to keep around,” Schulz said.
Kelly advised travelers to let their issuer know they travel internationally and will never use a card with a fee.
“Until the credit card companies know they’re losing money, they won’t change,” Kelly said.