Credit card/bank foreign currency fees

I've seen some articles recently that most major US banks are now tacking on 3% fees to all purchases made in foreign currency!  This includes Citibank, Chase, BankOne, etc.  CapitalOne, which had been a lone holdout, announced they are also charging the new fee begining this month.

How do you expats avoid these fees? Do you still use your US-issued credit cards, or do you apply for a Visa/Mastercard from a British-based banking institution?

As for ATMs: how do you avoid getting hit with high foreign fees for withdrawing money from your US bank?  Unfortunately, my employer will only pay me in US dollars and will only deposit the money into my US bank (Suntrust).  I have no idea how I'm going to withdraw or transfer my money without getting hit with astronominal dumb fees that serve no purpose but fatten wallets of US bankers.

(Luckily my wife is getting paid in pounds into a UK bank). 

How do you expats avoid these fees? Do you still use your US-issued credit cards, or do you apply for a Visa/Mastercard from a British-based banking institution?

As for ATMs: how do you avoid getting hit with high foreign fees for withdrawing money from your US bank? 

I definitely do not use a US credit card - the exchange rate on top of everything would be crazy.  In fact I haven't used a credit card since I arrived...only used my UK debit card.  You may be able to get a UK credit card at some point (some people got one right away, some it takes a few months/year to build enough credit).

I transfer money to and from my US bank account (I have both a US & UK account) using Paypal - the fee is very small compared to any other option.  Totally worth it!

I don't hold any US credit cards -- I got one from Egg a few months ago and use that if I'm purchasing something from the US.

Barclays and Bank of America have a reciprocal agreement in which their customers don't pay any fees when withdrawing from their ATMs.  So, when we're in America, DH uses his ATM card from Barclays at Bank of America ATMs and the opposite is true for me -- I still have my Bank of America account open and (when there was still reasonable money in it) used my BoA card at Barclays ATMs here.

Using foreign debit cards at ATMs in the UK have always involved getting hit by a fee from the foreign bank.  Because they have to do the conversion to pounds they must charge a fee for this.

It would be interesting to hear from others who get paid in US dollars but live in the UK.  Actually, I do know someonw who is paid in US dollars living here, maybe I can ask her next time I see her.

Btw, Onetiger, what would Paypal charge for such a transfer?  I normally do an economy transfer from my bank, LloydsTSB but I find this can cost 1.5 - 2% of the transaction (I could probably get this down below 0.5% if I transfered more money at a go).  Maybe Paypal is cheaper?

Matt

I haven't been charge by paypal - jmaster911 and I experimented with this and it works. There is a limit of $500/month though.

I use Paypal to transfer from UK to US and have never been charged.

I still have two US credit cards, but as one of them has notified me of the extra fee on international transactions (so much for the "global economy"...) I'm cancelling it.  That's just amazingly stupid, in my opinion.

I have 1 UK Visa card and 1 UK store card and that will do me fine.

I use Paypal to transfer from UK to US and have never been charged.

I still have two US credit cards, but as one of them has notified me of the extra fee on international transactions (so much for the "global economy"...) I'm cancelling it. That's just amazingly stupid, in my opinion.

I have 1 UK Visa card and 1 UK store card and that will do me fine.

may I ask which one wanted to charge you for int'l charges?

Providian.  I've been with them for YEARS and since almost all of my transactions over the past 3 years have been international, I'm rather upset at this development. 

So I'm cutting them loose!  I have a US account with a Visa/debit card attached to it, so anything I want to buy from the US that needs a US card, I can pretty much use that.  Without paying extra for "international  transactions".  Bah.

I don't hold any US credit cards -- I got one from Egg a few months ago and use that if I'm purchasing something from the US.

Barclays and Bank of America have a reciprocal agreement in which their customers don't pay any fees when withdrawing from their ATMs.  So, when we're in America, DH uses his ATM card from Barclays at Bank of America ATMs and the opposite is true for me -- I still have my Bank of America account open and (when there was still reasonable money in it) used my BoA card at Barclays ATMs here.

That is great to know about Bank of America and Barclays, as that is where my DH and I bank with.

That is great to know about Bank of America and Barclays, as that is where my DH and I bank with.

It does come in handy!  We never really thought about the fees until we saw that it cost about £5 to withdraw from Wachovia once!   

I haven't been charge by paypal - jmaster911 and I experimented with this and it works. There is a limit of $500/month though.

No charge for small amounts, yes, although I find that Paypal's exchange rate is pretty mean - they're gonna squeeze some money out of you somewhere along the line . But Paypal is still the most effective way I've found to transfer money between UK and US accounts.

So how does Paypal work? We have a paypal account we use for Ebay but how do I transfer my US funds to Sterling with Paypal? Do I have to register my US Visa/check card with paypal? I have been drawing $500 a month out of my US account simply via ATM. The exchange rate is terrible and I pay a $5.00 service charge a month plus any ATM fees. I have been doing this for over four years.

you setup a UK one through paypal.co.uk. I had jmaster911 set up one for himself with his bank accounts, then I linked my own up with my US bank accounts. Then, when I get a UK bank account, I'll just link it up to his or start another UK one of my own to transfer back and forth. We got the idea from another thread a few mts ago on this site.

I am being paid into my US bank account since I'm only here for 6 months.  I have a Visa card issued through MBNA.  There's no foreign currency fee and the exchange rate is pretty good, Visa takes 1%.  As for getting US dollars exchanged into pounds, the best way I've been able to calculate is using my US debit card.  I have an account with Wachovia, so I got them to increase my withdrawal limit to the max.  I get charged $1.50 per withdrawal (no charge from the UK bank), but I withdraw the max everytime.  I originally thought I'd do wire transfers, but they were outrageous.  $40 fee from Wachovia, 8 pd fee from NatWest and a terrible exchange rate. 

I just got notified about a month or two ago that I would be charged the 3% fee for using my CitiAdvantage card.  Was quite dismayed since I rack up airline mileage on that card.   Realizing that I would need an alternative, I contacted my other credit card company -- Bank One (now part of JPMorgan Chase) and they also indicated they charge the 3% fee.  So guess I won't be using that card either.  After a bit of calling around, I found out that American Express was not charging the fee.  I then decided to apply for their Blue card which I now have in my possession.  I plan to use that when I move to the UK in two weeks.  I do realize that some places don't take American Express so I'll have to fall back on one of the other cards until I can get a UK credit card. Or better yet a bank account with a proper debit card.