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Just when you thought that the banks and credit card companies couldn't get any greedier, now they are determined to make your overseas dream vacation even more expensive.

Using a credit card, debit card or ATM card overseas used to be a simple, safe and inexpensive way to manage your money while traveling. But now, most major banks are charging 2 percent fees or more on credit and debit card purchases made outside the US on top of the 1 percent currency-exchange fees already added by Visa or MasterCard. Banks also charge you for the privilege of taking your own money out of an ATM, or taking a cash advance against your credit card from an overseas ATM. Unlike the US, overseas banks do not generally charge you a fee to withdraw money from their machines, but your US bank will hit you with a fee anywhere from a $1.50 to $10 every time you withdraw cash from an overseas ATM.

Bank of America, Bank One, Chase, MBNA and Wells Fargo and get the worst rating for fees when it comes to overseas foreign currency transactions (2 percent plus the 1 percent Visa or MasterCard fee). Bank of America does however have the advantage of being part of the Global ATM Alliance. This gives users free access to the following ATMs -- Barclays Bank (UK), Santander Serfin (Mexico), Scotiabank (Canada), Westpac (Australia and New Zealand), BNP Paribas (France) or Deutsche Bank (Germany). My advice would be to draw money out of ATMs in these countries rather than using your Bank of America Visa or MasterCard as a credit card for retail transactions. Citibank also charges a 2 percent additional fee on credit card transactions, but use the debit card facility and you'll pay no fees. This makes sense; after all it is your money, not that of the banks or the credit card companies that you are using.

American Express customers pay a flat 2 percent fee on every credit card purchase made outside the US (so 1 percent lower than the cumulative rate using Visa or MasterCard in association with certain banks) but often getting the membership reward points make this fee worthwhile. Likewise the exchange rate will more often than not be favorable as it is calculated on the day of actual purchase so fluctuations in foreign currency can work to your advantage.

Some of the smaller banks and credit unions don't charge overseas transaction fees -- these include Capital One, Wachovia and Sun Trust. In fact not only does Capital One not charge overseas transaction fees, but it actually absorbs the fees from Visa or MasterCard, so this would be my number one pick for saving.

If in doubt, Bankrate gives you a comparison chart of all fees that banks charge for using their cards overseas. If your banking institution is not on the list, call them and get all the details. If your bank has fees that are cumulative, your real cost for getting money from an overseas ATM will be the 1 percent credit card conversion fee, plus the 2 percent bank foreign transaction fee, plus the 3 percent cash advance fee (or a fixed ATM charge). That can add up to 7 percent or more to take money from a cash machine overseas.

Decisions regarding how to make the most effective use of your money while traveling overseas will be influenced by a number of factors including your destination (or number of destinations), the type of traveling you will be doing, what percentage of your trip is prepaid and how much you intend to spend.

Some people prefer to carry cash and in certain countries traveling with US cash can actually work in your favor, especially in Asia, parts of Latin America, Africa and the Middle East. In countries like Turkey or Indonesia, Mexico or Morocco, Thailand or Vietnam, offering to pay for a large purchase in US cash will often get you a considerable discount. Of course you have to consider the risk of losing cash, or it getting stolen. You can also choose to convert your currency before you leave, but often that gives you an unfavorable exchange rate plus a US bank's commission fee to contend with. It is always beneficial though to have a small amount of local currency (enough for a taxi) when you arrive or be able to exchange when you arrive at your destination airport.

I am still of the opinion that the best way to get the most from your money while traveling to most destinations is to deposit a bundle of money into your credit card account before your departure, and then draw it out of an ATM overseas in large amounts for a fee of a few dollars each time. If you are happy to carry several hundred dollars of local currency on you at once, the fees will be negligible. Obviously it is important to ascertain if your destination has accessible ATMs, but I have found that if a town has a bank and electricity, it usually has an ATM, even in some of the most remote locations.

You may ask whatever happened to the old fashioned travelers' check? Purchasing American Express travelers' checks used to be the safest and most convenient way to travel, but with the half to 1 percent purchase fee plus the often high commission charged by banks or currency exchange businesses overseas to convert the currency, this option is no longer that viable (unless you purchase the checks in a local currency like Euros or Pounds Sterling). Add to that the inconvenience of dealing with sporadic banking hours (anyone who has ever been stuck at 2 p.m. in Rome with a $US100 travelers' check will know what I mean), long lines in banks and planning ahead for your weekend spending when banks are closed.

So American Express came up with the American Express Travelers Cheque Card and at first I thought -- what a great idea! That was until I read through the website and did not find the answers I was looking for. So I called their customer service line to discover that apart from paying $14.95 to purchase the card (and $5 each time you want to refill it), American Express has the audacity to still charge users the 2 percent overseas transaction fee when the stored value is in US dollars and you use it overseas. To me that is an obvious case of double-dipping. Their website states that "there are no fees to make purchases at retail or merchant locations" but this is clearly not the case in countries that do not use US dollars, UK Sterling or Euro.

Where this card is effective is if you are traveling to the UK or a European country that uses Euro. The card can be purchased in these denominations and therefore, American Express cannot charge the additional 2 percent fee on transactions. The Travelers Cheque Card may also be used at ATMs where you see the American Express logo. Your maximum daily withdrawal is $400 and the Card will be charged a $2.50 fee for each ATM use. Your card must start with a minimum load of $300 and a maximum of $2,750. You can pay using your American Express card or a Visa or MasterCard debit card and the card is valid for three years. As a special offer, order the Travelers Cheque Card before December 31, 2005, and you can receive a free $25 gift card by mail.

It is important to check with your bank before you travel, especially if you plan to spend big. Likewise, it is often beneficial to contact your credit card company and let them know that you will be traveling and that there will be large transactions in foreign currency, especially if you purchase your airline ticket with a different credit card. I have heard stories of people running into trouble overseas because credit card companies put a stop of their card thinking that it has been stolen. Before leaving for your trip, do your research and work out which way of accessing money will work best for you.

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