LowCards.com

[Greg Hampton]

Currency-conversion fees can add up when you're making purchases abroad. But you can take some steps to minimize the costs.

These fees typically are tacked on to credit- and debit-card transactions and can run as high as 3% of the amount spent. Card issuers' rules and rates vary and some, like Capital One, don't charge a fee at all. If you have more than one credit card, familiarize yourself with their policies so you use the card with the most favorable terms.

In some instances, you may be better off using a debit card. Some banks charge fees on foreign purchases made with credit cards but not debit cards, says Leslie McFadden, credit-card columnist at BankRate.com.

It also may be more cost effective to use a debit card for purchases, instead of withdrawing cash at a foreign ATM. For example, Citibank charges a 3% fee on debit-card purchases and cash withdrawals from a non-Citibank ATM, but those ATM withdrawals have an additional $1.50 fee.

Another option is to gamble on currency rates and use a prepaid card like the Travelex Cash Passport. With this prepaid MasterCard, you convert dollars to euros or pounds at the time you load the card, which can save you money if the dollar's value ends up lower at the time of your trip. But there is an upfront currency conversion fee that starts at 3.75%.

Story by Jonelle Marte for the Wall Street Journal.
http://online.wsj.com/article/SB126973418179468839.html?mod=WSJ_PersonalFinance_PF4