Citi charges highest overseas card fees
By Kim Jae-won
Are you planning to go overseas for summer vacation? You’d better use cash instead of credit cards because card issuers charge customers excessive handling fees for overseas use, industry data showed Friday.
According to information on rates offered by credit card companies, Citibank Korea charges the highest overseas handling fee of 0.5 percent on overseas payments, followed by BC Card and NH Bank which each charge 0.35 percent. Hana SK came fourth with 0.3 percent while KB Kookmin levies 0.25 percent in overseas handling fees on customers.
Samsung, Lotte and Korea Exchange Bank charges are relatively low at 0.2 percent while Shinhan and Hyundai customers enjoy the lowest fees in the industry at 0.18 percent.
In addition to handling fees, plastic issuers charge 1 to 1.4 percent in transaction fees on behalf of international brands, such as Visa, Mastercard and American Express for using their networks. Visa and Mastercard charge 1 percent in fees while American Express imposes 1.4 percent.
In short, holders of Citibank’s Visa or Mastercard affiliated credit cards pay the highest fees of 1.5 percent, which means they should pay $1.50 in fees whenever they buy products or services worth $100. Consumers using BC Global Card pay the lowest fee of 0.35 percent
Only BC Card is free from transaction fees. The company established its own overseas network in cooperation with other foreign brands such as Discover Financial Services of the U.S., enabling the company to use their network freely. Holders of the company’s Global Card do not need to pay the additional fee thanks to the network, which covers 103 countries all over the world.
Thanks to the international card, BC saw its Global Card holders top 1.8 million after it was launched last year.
As BC gains popularity among customers, other credit card issuers consider having their own overseas networks in cooperation with other foreign brands. KB Kookmin Bank is mulling launching a similar card, according to a high-ranking executive of the company.
Card firms say that it is inevitable to charge handling fees on customers for their overseas payments because there are considerable costs. “We cannot remove the fees as we pay for overseas transactions and currency risk management,” said a spokesman of a local credit card company.
Citibank Korea said that cardholders of its premium brand titled "Platinum" are exempted from the overseas handling fees.