I purchased plane tickets at Kuwait Airways website, for a trip originated from US with a transition/overlay at Kuwait, by using Fidelity Rewards Credit Card, a credit card issued in US. My credit card account shows not just the transaction, but also a second one with 1% of the ticket price, labeled as FRGN TRANS FEE and charged by Kuwait Airways if I am not mistaken.
DESCRIPTION: Frgn Trans Fee-Kuwait Ai2292113807162 Ci TYPE: FRGN TRANS FEE Merchant details CATEGORY: KUWAIT AIRWAYS METHOD: Manually Entered
I remember seeing the price in US dollars and not seeing any currency conversion or foreign transaction fee, when placing the order directly at the airline website. My credit card company replied to me:
As disclosed in your Cardmember Agreement, if you use your card for retail purchases at foreign merchants or for cash withdrawals from foreign ATMs, your foreign currency transaction will be converted to U.S. dollars, and you will be assessed a foreign transaction fee. The fee is 1% of each U.S. dollar amount. This fee applies when the merchant is located in a country other than the United States, even on transactions submitted to us in U.S. dollars.
The merchant's business name listed with Visa is Kuwait Airlines.
When using a credit card to make a purchase of a service of a merchant located in a country different from US where the credit card company is located,
- Does it matter to the following questions whether the merchant lists their service in US dollars or a different currency on their website?
- is there always currency conversion?
- is a foreign transaction fee inevitable, regardless of its percentage of the service price (and regardless of whether the credit card company or the merchant want to charge any at all i.e. whether the percentage is 0%)?
- who charges for the foreign transaction fee, the merchant, or the credit card company?
- Is it possible to know about the amount of foreign transaction fee when placing an order with a merchant outside the country of the credit card company?
- Is it possible to avoid foreign transaction fee using a different payment method from credit card? For example, debit card, Paypal?