Summer is a great season for visiting foreign countries. For many travelers, credit cards are a preferred mode of payment due to their convenience, flexibility, great purchasing power and global acceptance. People rely on their American credit cards to pay for most goods or services overseas. However, every purchase usually comes with a foreign transaction fee. So before waving goodbye and going to your new destination, discover what extra fees you will need to pay when using your plastic abroad. It will help you pick the most suitable credit card and avoid additional expenses.

Foreign transaction fees, or international transaction fees, are charged by nearly all credit card issuers. It means that you will pay a little extra for your shiny brand new bag in France or an umbrella drink in the Caribbean. The fee is generally a percentage of your overall purchase price in U.S. dollars after the foreign currency exchange. For example, you make a purchase costing 100 Euro in Italy. It equals $135 in U.S. currency. The foreign transaction fee is a percentage of the $135.

After the suit against MasterCard, Visa, and Diners Club (in 2006 they had to establish a $336 million fund to pay for hiding foreign transaction fees), most credit card issuers prefer to reveal their international transaction fees in the credit cards' agreements. However, it can be just a part of your fee. Your plastic is issued jointly by a bank and a payment network. MasterCard and Visa each charge a 1% processing fee on international transactions. Most credit card issuers add their own 1-2% foreign transaction fee on top of that.

For example, Bank of America imposes a 2% foreign transaction fee, and MasterCard and Visa charge 1%. So if you make purchases with your Bank of America-issued Visa card abroad, you will need to pay a total fee of 3% (a 2% Bank of America fee plus a 1% Visa fee).

American Express international transaction fee is 2%. Besides issuing their own plastic, the company deals with Citi and Bank of America. So if Amex charges a 2% fee, and Bank of America - a 2% fee as well, does it mean that your total foreign transaction fee will be 4%? Fortunately, no. Thanks to the bank's terms, it remains 2% for Bank of America-issued American Express cards. However, this scheme does not apply to Citi credit cards.

Discover is the only major credit card issuer who doesn't charge a foreign transaction fee.

The company has their own payment processing systems, so they do not need to be associated with other banks. However, its plastics are accepted in few countries because of a smaller payment network. You can use Discover credit cards in Canada, Central America, Mexico, the Caribbean, and China. The situation is going to change after the company's total integration with Diners Club. The deal will increase the global acceptance of Discover plastics.

When you return home from your trip, check your credit card statement. If you have made purchases in a foreign currency using your credit card, you will see a description of your transactions: name and location of the merchant, the amount of the transaction in U.S. dollars, the amount of the transaction in the foreign currency, the exchange rate and a foreign transaction fee. If a charge seems too high, call your bank and ask them to explain it.