That souvenir you charged overseas may be cheaper
Fees tacked on by credit card companies continue to fall, study shows
The number of fees tacked onto credit cards is shrinking, according to a new study from CreditCards.com.
The 100 cards reviewed for the study had a total of 593 fees, compared with the 613 fees customers potentially faced last year.
In particular, travelers overseas are increasingly able to charge a meal or buy souvenirs without paying a foreign-transaction fee, which typically adds 3% to their bill. Currently, 61 out of 100 cards CreditCards.com checked add that extra charge, compared with 77 in 2015.
Scrapping that fee and others is a way card issuers are fighting to keep and gain customers in an increasingly competitive marketplace, industry watchers say.
“People are more willing to spend as the Great Recession fades,” says Matt Schulz, senior industry analyst at CreditCards .com. “Banks are more willing to lend, and there are just a lot of cards out there, so if you add it all up, it’s definitely a buyer’s market when it comes to credit cards.”
Depending on the card, customers can be charged for everything from exceeding their credit limit to transferring a balance, with the typical card carrying six fees. But since last year, 19 cards have stopped charging customers for a paper copy of a past statement, making that the fastest disappearing fee, Schulz says.
Foreign-transaction charges also have been a particular focus of competing card issuers, as Americans — flush with reward points and buoyed by a stronger dollar — travel more internationally, says Ben Woolsey, president of information and review website CreditCardForum.
“Whenever they see somebody gaining some market share, they’ll often try to match whatever the difference is, and foreign-transaction fees have become the latest thing they’re starting to compete on,” he says.
While such fees are meant to cover conversion expenses and potentially higher fraud risk that comes with international transactions, card issuers make most of their money on interest from people carrying balances and on fees charged to merchants, Woolsey says. “So it’s not costing banks a lot to give this up.”