CURACAO NETHERLANDS ANTILLES

While credit card companies do not allow merchants to tack on a fee when customers use a card instead of cash (see Undercurrent, January 1999), some traveling divers using credit cards abroad may get wacked with a surcharge from the bank issuing the card. In the last few months, First USA and Citibank have brgun tacking on a 2% fee for all foreign VISA and Mastercard charges. First Cards, which are also issued by First USA, will tack on 3%, and this 3% rate will also apply to cards from American Airlines and United that accrue miles. American Express and Diner's Club charge 1%.

What's a traveler to do? Consumer Reports Travel Letter says "it's still a good idea to charge your purchase overseas rather than exchange currency or traveler's checks, because the exchange rate is far better. Credit card companies typically grant consumers the same favorite rate banks give each other for bulk transactions -- essentially a daily wholesale rate plus a 1% fee. By contrast, travelers can lose 5 - 10% of their money when they convert their cash. But the new fees are beginning to narrow the margin."

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