TRAVEL Credit cards ditching foreign fees
New embedded chip helps reduce fraud International roaming plans often expensive, confusing
It’s getting cheaper and safer for American travelers to use their credit cards abroad.
Fees added on for purchases abroad are fading away, while a growing number of cards are being equipped with an embedded chip that makes them less vulnerable to fraud.
“It’s definitely a good thing for consumers that we’re catching up with the rest of the world in terms of chip technology,” says Matt Schulz, senior industry analyst at CreditCards.com. “And of course, any time you can save money on a foreign trip, in this case foreign transaction fees, it’s a very good thing, too.”
A CreditCards.com survey found that among the 12 biggest card issuers, there is no foreign transaction fee on 37% of the consumer cards they offer. And four of those issuers — Capital One, HSBC, Pentagon Federal Credit Union and Discover — do not impose such a fee on any of their consumer card customers.
“The bottom line is that there’s no need to pay these fees anymore because if you do your homework ... there are plenty of opportunities out there for you to find a card where there’s not a foreign transaction fee,” Schulz says.
Those fees can add up, often equaling 3% of the tab.
In the past, cards without foreign transaction fees were a perk usually reserved for more affluent customers. But in the past three years, those cards have become available to a much wider swath of Americans and, in some cases,
analyst, Serious Insights
Talk is cheap. Unless you travel internationally.
Then your wireless phone bill can be expensive — very expensive. At least that’s the conclusion of a new survey by communications company Telestial. It found that 82% of international travelers worry about the cost of data when they’re overseas.
And with good reason. Oddly, only half say they’ve bought a SIM card for their phones, which might help them save money. Instead, they power down their devices or use them less, fearful of a huge phone bill, according to Dan Rasmus, the principal analyst at Serious Insights, which conducted the study.
“Americans,” he adds, “just don’t get international data.”
The days of hitting travelers with huge mobile phone bills may be coming to an end. T-Mobile stopped charging for data roaming on some of its plans back in 2013. Last year, the European Parliament voted to end dataroaming charges within Europe by this December. And Google just introduced a wireless service called Project Fi, with no roaming charges in more than 120 countries.
But are travelers ready? Perhaps, but they face a few obstacles, including their own wireless carriers, general confusion about technology and a fast-changing industry.
Consider what happened to Sery Kim before she left for a recent trip to Paris. She contacted Sprint, her wireless carrier, to make sure she had the right plan. She took every precaution to make sure she wasn’t being assessed any additional fees, using texting and making calls only when absolutely necessary and switching to a Wi-Fi hotspot at her hotel.
“Still, I incurred hundreds of dollars in fees,” says Kim, an attorney and writer based in Washington.
The trip taught her a lesson about the inevitability of roaming fees. Now when she travels overseas, she turns off her phone and uses a disposable handset for calls and data. Problem solved.
Data-roaming solutions can confound even the smartest traveler. Customers don’t understand how their carrier defines data, according to the Serious Insights research. Regular phone calls and texts are charged in the way travelers expect, but certain picture messages or even emoticons are considered data. How about a voice call using a voice-over IP app? That’s data, too.
And even when travelers think they’ve got it all figured out by buying a SIM card, they’re sometimes foiled.
That’s what happened to Matthew Hurst, a social media strategist based in New York. He bought a data card on a recent visit to Austria, only to discover that it had to be registered to a debit card issued by an Austrian bank. So much for that.
“The wireless carrier had failed to mention it,” he says. “We ended up dipping into some of the international roaming data we purchased in advance through our home carrier — but it goes to show the pitfalls of waiting to buy prepaid cards when you arrive at your destination.”
And even if you have the right plan, do you have the right technology? Maybe not.
Wireless technology moves at a lightning pace — enough to make this consumer advocate’s head spin. There are too many options, including your own carrier’s data plan, cards offered by companies like Telestial, and any number of other solutions. If you’re a heavy user, for example, you can consider an all-you-can-eat data package offered by the likes of KnowRoaming. For Hurst, that would have come to $7.99 a day in Austria, with no native debit card required.
Of course, a company like Apple or Microsoft could come along and disrupt the entire business, offering customers “free” connectivity when they’re abroad. And it could all happen between the time I finish writing this sentence and the time it’s published.
Don’t you just love technology?