Reason for the 5 to 6 percent deviation in the credit card bill

You must know that, credit card issuing bank and the network service provider (MasterCard or Visa) apply extra charges on foreign transaction done through your credit card. So, when you calculate your expenditures using currency conversion rate gives, it will not match with the statement amount, unless you add the banks extra charges.

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What is the type and amount of charges involved?

Following charges are applied by various entities involved in the transaction:

Currency conversion fee: Whenever you use your credit card for conducting any foreign transaction, network service providers like MasterCard or Visa will levy a conversion fee in the range of 1 to 2 percent.

Overseas transaction charge: Any foreign transaction carried out through your card, the issuing bank will charge a transaction fee in the range of 2.5 to 3.5 percent of the transaction amount.

Cash withdrawal fee: As you already know cash withdrawal through a credit card is costly even in India, so it’s quite obvious that it would be costly overseas too. On cash withdrawal in foreign currency your bank applies some additional charges which differ from bank to bank. Remember, it will be in addition to local cash withdrawal charges.

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