How to get rid of a foreign transaction fee on your bill

By | August 11th, 2009

air berlinJust before the latest credit card bill was signed into law a few months ago, I predicted banks would start charging transaction fees for purchases made through an international company. I hate it when I’m right.

Tacking on a three or four percent surcharge, even when the purchase is in dollars, is unconscionable, of course. But let’s not get drawn into a discussion about whether these banks have a conscience.

Instead, let’s focus on what you can do when you find a foreign transaction fee on a credit card bill.

Here’s what happened to reader Michael Weber:

A few months ago I purchased a round trip ticket from Miami to Hamburg, Germany through Expedia, flying Air Berlin, using my MasterCard from Citibank. In the past I have always used my Amex card.

Subsequently, I found a $27 foreign transaction fee on my statement and not knowing what this was for I called Citibank. They said that whenever a purchase is made from a foreign company, a charge of three percent will be incurred.

When I told them that I paid Expedia, which is a domestic company and not Air Berlin, they said that Expedia is just a middle man and they are paying Air Berlin directly — thus the $27. Unless I have been inattentive in the past I don’t believe I ever paid this fee to American Express.

Am I the last one to know about this fee or is there something wrong here?

Weber decided to fight the charge. He contacted his credit card company and a government site called Helpwithmybank, which helps consumers with their banking problems.

It didn’t take long for Citibank to cave in.

We recently received an inquiry on your behalf from the Comptroller of the Currency regarding the $27 foreign transaction fee assessed to your Citi Platinum Select Card account.

You indicate in your letter that you purchased an AirBerlin ticket via Expedia, which is a company in the United States; however, your account was assessed a 3% foreign transaction fee.

Although I certainly regret any misunderstanding, because the merchant billed the charge to your account from a foreign country, in accordance with the Card Agreement, the fee is considered valid.

However, as a gesture of goodwill, I credited the $27 foreign transaction fee, and this adjustment will appear on a subsequent statement.

How interesting.

So the foreign transaction fee is negotiable. If you complain loud enough, your credit card company will remove it.

I find it interesting that Citi is blaming Expedia for the fee. If Expedia had billed this from an American account, then the fee wouldn’t have been assessed. The last foreign transaction fee case I deal with also involved an Expedia purchase, so maybe the online agency needs to fix something.

Foreign transaction fees ought to be illegal. Until they are, you can fight them one at a time — and win.

(Photo: Andrei Dimofte/Flickr Creative Commons)

We want your feedback. Your opinion is important to us. Here's how you can share your thoughts:
  • Send us a letter to the editor. We'll publish your most thoughtful missives in our daily newsletter or in an upcoming post.
  • Leave a message on one of our social networks. We have an active Facebook page, a LinkedIn presence and a Twitter account. Every story on this site is posted on those channels. The conversation ranges from completely unmoderated (Twitter) to moderated (Facebook and LinkedIn).
  • Post a question to our help forums or ask our advocates for a hand through our assistance intake form. Please note that our help forum is not a place for debate. It's there primarily to assist readers with a consumer problem.
  • If you have a news tip or want to report an error or omission, you can email the site publisher directly. You may also contact the post's author directly. Contact information is in the author tagline.