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Correction to This Article
The Coming and Going column in the March 13 Travel section incorrectly said that, when converting overseas charges into dollars, MasterCard uses a wholesale exchange rate plus 2 percent. MasterCard uses a wholesale exchange rate plus 1 percent. Credit institutions that issue MasterCard may then add another fee, typically an additional 1 to 3 percent.


Sunday, March 13, 2005; Page P01


Playing Your Cards Right

Because he reads the small print on his credit card statements, Charles Weber of Alexandria noticed a "change in terms" alert on his latest Citibank MasterCard bill: "For each purchase made in a foreign currency, we add an additional finance charge of 3% of the amount of the purchase after its conversion into U.S. dollars."

Weber, in addition to being angry, was curious. "How prevalent has this policy become?" he asked CoGo in an e-mail.

Increasingly prevalent. The nonprofit advocacy group Consumer Action last spring surveyed 45 companies that issue credit cards and found that 26 were adding currency conversion fees -- up from 17 the year before. What you need to know:

• When converting overseas charges into dollars, Visa uses the wholesale exchange rate plus a 1 percent conversion fee. MasterCard and American Express add 2 percent.

• The companies that issue Visa and MasterCard may add another fee, typically 1 to 3 percent. (American Express issues its own cards.)

• Issuing companies that don't add an extra fee: Capital One, MBNA and numerous smaller banks and credit unions.

• Among issuing companies that do charge an extra fee: Bank of America, Citibank, Chase Manhattan and Wells Fargo.

CoGo's advice: No matter how you spend money overseas, there is no way to avoid foreign currency exchange fees. Credit cards remain a good option -- if you play your cards right.

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