If your summer vacation will take you out of the United States, it &39;s worth it to take the time to figure out which piece of plastic you&39;re going to use where. While the safety and convenience of getting to say, "Charge it!" are well-known, there&39;s another benefit to using a card overseas: The exchange rates credit card issuers use are usually quite favorable and hard to beat.

The foreign transaction fees, on the other hand, can be a costly, unwelcome surprise.

Almost every credit card issuer charges extra for purchases made outside the United States. Both MasterCard and Visa have a 1% processing fee and most banks add on additional fees of their own, which are generally a percentage of cost of the transaction in US dollars. For example, say you did lunch in Milan for 100 Euros, which translated to $125.00 US. The foreign transaction fees would be charged on the $125.00 amount.

A recent survey of credit card issuers by Heshan Demel, one of my CardRatings.com colleagues, found the following foreign transaction fees:

• American Express - 2%
• Bank of America - 3%
• Chase - 3%
• Citibank - 3%
• Washington Mutual - 1%
• Wells Fargo - 3%
• Capital One - No foreign transaction fees
• Discover – No foreign transaction fees … but this card is rarely accepted overseas

Before You Go

Call your card issuers and find out what their current foreign transaction fees are. While you have them on the phone, it&39;s a good idea to mention that your travel plans will be taking you out of the country, so that your international charges aren&39;t inadvertently declined as part of a card issuer&39;s fraud protection program.

Did You Take a Trip Last Year?

You may be due a refund if you paid any foreign transaction fees between February 1, 2006 and March 8, 2006. Without admitting to conspiring to set and conceal foreign transaction fees, the following major players in the credit card industry have set up a $336,000,000 settlement fund: MasterCard, Visa, Diners Club, Bank of America, Bank One/First USA, Chase, Citibank, MBNA, HSBC/Household, and Washington Mutual/Providian. Click here to find out if you&39;re eligible for a piece of this hefty refund pie.

Watch for Special Promos

Always be on the look out for special credit card promotional offers. For example, last week Citibank launched the brand new Citi Chairman American Express Card. This card is targeted to Smith Barney and Citi Private Bank clients and boasts no foreign currency transaction fees until January 2009.

Happy Travels!

Any tips or thoughts on using your credit card overseas? Please share your thoughts!

Curtis Arnold, is the Founder of CardRatings.com, a website that provides ratings and reviews of over 20,000 credit card offers.