1. How is the 1.5% Foreign Transaction Fee calculated?
When processing transactions with overseas payment clearing institutions (including physical international purchases, online travel agencies, or cross-border e-commerce), banks assess transaction fees. This 1.5% fee combines two charges:
- International Card Network Fee (1%): Assessed by VISA, MasterCard, JCB, etc.
- Domestic Issuing Bank Fee (0.5%): Assessed by the card-issuing bank.
Select credit cards offering overseas rewards above 1.5% to offset fees and net positive cashback.
2. Avoid Home Currency Settlement Abroad (DCC Trap)
When paying at overseas merchants or websites, if prompted to settle in local currency versus home currency (e.g., TWD), always select Local Currency!
Selecting home currency triggers Dynamic Currency Conversion (DCC), letting local acquiring banks apply marked-up exchange rates plus 3%–5% extra service fees, rendering high cashback cards unprofitable.
Overseas Credit Card FAQ
Q: Are foreign transaction fees (1.5%) refunded upon processing product returns?
Policy varies by network and issuing bank: MasterCard and JCB generally refund original foreign transaction fees. VISA generally does not refund fees, and some banks charge an additional return processing fee depending on institutional rules.
Q: Who benefits from using Dual-Currency Credit Cards?
Dual-Currency cards settle directly from foreign currency accounts, letting users purchase foreign exchange reserves when rates are favorable and spend abroad without spot rate fluctuation risks (verify if foreign transaction fees apply).
