Sunday, July 6, 2003

Fees on the road can vary greatly

The fine print

By Jenny Callison
Enquirer contributor

Planning a trip abroad? By doing a bit of research before you depart, you might save yourself some money on foreign currency transactions once you're there.

In countries that cater to tourists, there are plenty of places that will convert your dollars for a fee. But for years, experienced travelers have simply used their debit or credit cards in an ATM to access money. ATMs yielded cash at excellent exchange rates without fees.

But some financial institutions realized that they were missing a lucrative opportunity, and began tacking on charges for ATM or other card-related transactions. Here are a few:

• ATM use fee: This is a standard charge that your financial institution levies when you use an automated teller machine that it doesn't own. Whether you're out of town or out of the country, expect to pay a fee to use another bank's ATM, even if it's in your card network.

A second ATM use fee will likely be charged by the bank that owns the ATM you use.

These charges are nothing new, but should be calculated as part of the cost of currency conversion. While each charge usually is $2 or less, they can add up if you make a lot of trips to the money machine. Estimate your cash needs for a period of time and stock up.

• Some big banks now charge a transaction fee of 2 percent or so of the amount you withdraw from an ATM. These new fees come on top of 1 percent fees long charged by Visa and MasterCard for purchases involving foreign currency. Now some banks are charging a small percentage for debit card purchases, too.

Greater Cincinnati banks appear to be less aggressive than some others in this regard. Provident Bank charges a maximum of $1.50 to travelers who withdraw money from foreign ATMs. Your cost could be reduced depending on the type of checking account your card is linked to. Folks who travel frequently should check out the bank's Express Checking, which charges nothing to withdraw cash abroad, spokesman Chris Kemper said.

"An LCNB customer using a foreign ATM would be charged $1," said Steve Lautenslager, who supervises ATM and debit card services for Lebanon Citizens National Bank.

The best bargains for foreign transactions are often available from credit unions. Angie Miller of the GE Credit Union reported her institution charges its members 50 cents for a foreign ATM withdrawal. There are no transaction fees.

"Our credit union has a lot of members who are stationed abroad - GE employees who are sent to foreign countries for six months or more on business," she said. "Our debit card provides them a great, inexpensive way to access their accounts while they are there."

Both Kemper and Lautenslager advised travelers to buy with credit cards rather than debit cards, because there's greater protection for the card owner should any dispute arise over the purchase.

"Let's say you go to India and decide to buy a rug. They say they'll ship in six to eight weeks. You've already authorized that charge," Lautenslager said. "But if you have a problem with it, you have a lot of securities and provisions to protect you if you've used your credit card. With a debit card, the dispute-resolution process takes a lot longer. And the purchase has already come out of your spendable cash."

Credit cards can provide cash advances from ATMs or even from foreign banks, but you'll pay a premium: interest charges begin to accrue from the moment you withdraw the currency. Some banks charge a premium interest rate for cash advances, but not all do. LCNB assesses the same interest rate for cash advances as it does for purchases, Lautenslager said.

So before making that trip, check your customer agreement or call your bank or credit card-issuing institution and get a statement of all fees they might impose on your foreign financial dealings.


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