Hitting the shopping malls abroad will be less costly for traveling consumers with a Discover card, which has stopped charging foreign transaction fees.
The convenience of using a United States-issued credit card comes at a cost to most Americans, but not Discover cardmembers – at least not anymore.
Discover (NYSE: DFS) has decided to stop charging foreign transaction fees on all of its credit cards as of November 6, 2011.
“We removed our 2% foreign currency fee as an added convenience to our card members so that it is one last thing for them to worry about when traveling internationally,” a Discover spokeswoman wrote in an email.
Previously, the foreign transaction fee was applied when Discover cardmembers swiped their cards outside the United States. Cardholders who relied on their credit cards for spending internationally would often feel nickel-and-dimed when receiving their monthly statements.
Last month, Discover reinstated its Secure Online Account Numbers after receiving compelling customer feedback against canceling it. The feature generated single-use account numbers that offered an extra layer of security when shopping online.
Cutting Costs of International Travel
In the credit card industry, the typical foreign transaction fee is 3% of the purchase amount.
When talking about no foreign transaction fees, Capital One is the first credit card issuer that comes to mind. It has been given the issuer a competitive edge against other major credit card companies.
However, in addition to Discover, many other card issuers are starting to offer the same perk, but only on more prestigious cards that are catered towards frequent travelers and the affluent.
Earlier this year, JPMorgan Chase eliminated foreign transaction fees on its Chase Sapphire Preferred®card and some other travel rewards credit cards. Also, American Express dropped foreign transaction fees on the Platinum and Centurion cards.
Meanwhile, Citi offered its new Premier and Prestige ThankYou cards without the fee.
With credit industry trending towards cutting foreign transaction fees, consumers may benefit from more issuers opting to remove the fee.