Citi Double Cash foreign transaction fee — the only guide you need

TransferWise
03.12.19
5 minute read

Citibank, which uses the Citi brand for its products, is among the world’s largest banks and is based in the United States. Citi’s Global Consumer Banking division, which includes its digital and credit card products, trades in 19 countries around the world and has around 2,450 branches.¹ Citi offers a wide variety of services, which range from mortgages to personal loans. Some of their products are aimed at people who spend a lot of time abroad, and some of these offer benefits such as travel insurance and round-the-clock helplines.

In this article, we’ll explain how you can use the Citi Double Cash card while you’re traveling overseas. We’ll talk about quite a few aspects, and these will include:

  • Foreign transaction fees for the Citi Double Cash card
  • How Citi works out the exchange rate you’ll be offered
  • Some of the features and fees that’ll apply if you sign up for their card
  • Your options for making payments when traveling abroad

We’ll give you the information to help you choose what’s right for you, including telling you about the TransferWise borderless account. That’s an exciting new alternative to a conventional bank account, and it may be just what you’ve been waiting for. Read on and we’ll tell you more about it to help you decide.

Citi Double Cash credit card foreign transaction fees - the basics

The Double Cash credit card that’s offered by Citi charges fees for some services. These include a foreign transaction fee, which is usually applied when you use a currency that isn’t US dollars to buy things or draw money out of an ATM. This fee can affect you if you buy an item from a seller abroad, but the most likely time for it to hit you is while you’re traveling overseas. That can be a real pain, since you’re likely to want to concentrate on other things right then.

The Citi Double Cash card charges a foreign transaction fee of 3%, which is a pretty common rate for a card of this type.² That percentage is based on the value of each purchase in US dollars, not the local currency, which gives you another thing to think about.

What other fees and features do I need to know about?

There are a few other fees that you’ll want to know about when you’re using the Double Cash card. One piece of good news is that there’s no annual fee to pay with this card. On the other hand, for balance transfers you’ll pay either $5 or 3% of the total, whichever is greater — and for cash advances, it’s quite a bit steeper: either $10 or 5% of the total, and again whichever is higher is the amount you’ll pay.² Late or returned payments will cost you $39, but the first late payment won’t cost you a fee.

A nice feature of this card is its cashback offer. Every time you use the Double Cash card to buy something, you’ll get 1% of the transaction value back straight away. When you repay the credit you’ve used to pay for your purchase, you’ll get another 1% – as long as you stick to the minimum repayment. The Citi Double Cash card’s Annual Percentage Rate (APR) for purchases is between 15.74% and 25.74%; the exact figure will depend on your credit rating. ⁴

What about the rates?

There are a couple of things that will make a difference to the rate you get when you buy things abroad. The first is that banks usually charge an upfront fee, and the second is which rate you’re getting. It’s tempting just to let this go, but that can lead to unpleasant surprises down the line, when your statement or bill comes in. You can easily end up losing out because you’ve gotten a poor deal on the rate.

A key thing to know about, that can help you save money, is the mid-market rate. If you look up an exchange rate with Yahoo or Google, what you’ll see is the mid-market rate, and it’s also what banks use when they’re transferring currency themselves. Sounds simple, doesn’t it? Unfortunately, it’s a little less so when you’re using an overseas ATM or making a purchase. Your card company or whoever’s handling the transaction is likely to add a markup. They won’t call it a fee, but it’ll still cost you.

You may be wondering whether there’s another way — and there’s good news. With TransferWise, all you’ll pay is a single, low fee that’s made clear upfront. If you sign up for a new TransferWise borderless account, you’ll be able to send funds around the world, using dozens of different currencies, without needing separate accounts. You can also get the TransferWise debit Mastercard. That will let you move funds in and out of your account using the fair mid-market rate, and that means no need to worry about foreign transaction fees.

Watch out for Dynamic Currency Conversion

Dynamic Currency Conversion (DCC) looks like something you’d want, right? Well, looks can be deceiving, because DCC can end up costing you plenty. Whenever you’re using your card to pay for stuff while away, you’ll want to get the best exchange rate you can. DCC can stop that from happening.

If you’re in a foreign country and you take out cash from an ATM, or make a purchase from a seller, you may be asked if you want to work in dollars rather than the local currency. Again, that sounds good — but again, there’s a catch: you can end up paying more that way than if you’d stuck with the local currency. Bad news.

Here’s the lowdown. When you go for the DCC option, the seller or ATM operator will choose the exchange rate; you don’t get a say. They can also add fees, so your total bill can be way higher than you’d have gotten with the standard Visa or Mastercard rate.

If you’d like to read a deeper dive on this issue, we’ve put together a comprehensive guide which goes into lots more detail about the ins and outs of DCC. If you just want one piece of advice, though, then it’s this: choose to use the local currency every time.

Summing up, the Citi Double Cash card may be worth a look for travelers. The lack of any annual fee is a big plus, and then the cashback offer could be very helpful, especially if you make a lot of purchases. On the down side, there’s that pesky foreign transaction fee every time you spend overseas, while cash advances will cost you a significant amount every time you need one. Take a little time to think about your personal circumstances and compare terms with other cards, to see how well they match what Citi’s card can offer. Everyone’s needs are different, so don’t fall for the notion that one size — or card — fits all.

While you’re doing that, you may want to look at whether a TransferWise borderless account could be what fits your needs. There are no foreign transaction fees with the TransferWise account, plus you can be sure you’ll get the mid-market rate.


Sources:

  1. https://docs.google.com/document/d/1uFrlj4Nyvmbz3ie6FCAQswV8_nCx0MU1AA4ydi30BCo/edit#
  2. https://www.citi.com/credit-cards/credit-card-details/citi.action?ID=citi-double-cash-credit-card
  3. https://www.citicards.com/cards/credit/displayterms/flow.action?app=UNSOL&HKOP=6A7DD76D0034CA853935919BF7703D265D21680F5F3BC224D9D75F01ACAF085E

All sources last checked 4 March 2019


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