Due to a loophole in the Credit Card Accountability Responsibility and Disclosure Act of 2009, banks can charge a foreign transaction fee even when the transaction takes place in US dollars with a store that is resident on American soil, simply because the founding/original office of the store is overseas or the backend processing takes places overseas. It is impossible for the casual consumer to tell that they are going to be charged a foreign transaction fee for these purposes, which allows banks, such as CitiBank (see here and here) and even my local credit union (which charged me a FTF for purchases made in US dollars to a Florida company that is actually owned by a company in the UK), to “sneak in” small fees that consumers don’t expect. I am asking my congressional representatives to address the loophole, and I urge you to do the same. Further, I have submitted a complaint to the newly formed Consumer Finance Protection Bureau asking that, until the loophole is addressed, that banks be required to disclose the full fee you will be charged at the time of purchase. Consumers should not be required to research the history and origins of a company before making a purchase to know the total amount of that purchase. Further, consumers shouldn’t need to research who processes the payments of a company before making a purchase.
In the interim, I suggest doing business with Discover or Capital One, as they will not bill you for these fees. (Capital One pays the fee that Visa charges. Discover simply does not charge a fee.) Otherwise, make sure you know thoroughly where your purchase originates and may be processed, or else you may get hit with a surprise fee of up to 3% of the total purchase.