Yen & You: Plugging the money leaks in your credit cards


By Austin Morgan

I was interviewing a fellow personal finance blogger last week for a podcast and he was talking about Dave Ramsey’s Financial Peace University class he was leading at his church. After every class people would come up and tell him the same thing, “I wish I would’ve known this when I was younger.”

There’s a lot of outlets for blame if you’re bad with your money, but that game won’t get you any where with your money. If you’re ignorant with your wallet and expenses, you’ll always be playing catch up. Instead, fix the money leaks in your wallet and use that money to pay off credit card debt, fund your next weekend excursion, start an emergency fund, or store away for a future dream house.

Let’s look at two common money leaks for people abroad when it comes to credit cards.

The Interest Leak

Not knowing the specifics of your credit card is one of these ignorant money acts that’ll end up hurting you in the long run. Many people carry balances on their cards and pay the minimum every month. For some people, this is inevitable, but many people just don’t realize how much interest they’re paying every year or how long their balance will actually take to pay off.

Do you know the interest rate on your credit card?

I’ll admit that I didn’t before I started writing this post (turns out it’s 13.2 percent) but I also don’t carry any credit card debt so it doesn’t matter as much.

So how much is your interest rate? (Look it up). Then use this calculator to figure out how much your debt is costing and how long it’ll take to pay off. Is it higher than you thought it would be?

You have to know what’s in your wallet.

Money leaks like paying more than you thought in interest on your credit card make saving money difficult. If you want to start feeling financially comfortable and growing your savings for a new car or vacation, you need to fix this problem soon.

The Foreign Transaction Fee Leak

This fee is often hidden but is still another ignorant money topic for a lot of people. If money’s tight, you may need to rely on your American credit card to buy groceries this month. That’s fine.

But what’s not fine is having no idea how much your card charges you for foreign purchases. Some lucky cards charge 0 percent, but many cards aren’t meant to be used outside of the United States — or wherever you’re from — and charge anywhere from 1 to 4 percent per purchase.

This may not seem like a lot, but if you’re charging $1,000 to that card in a month, you’ll pay $30 in fees if your card charges 3 percent. That $30 is leaking out of your account and you don’t even know it.

Here’s a great article on the foreign transaction fees for different credit cards.

Do yourself a favor and sign in to your card’s website and find the foreign transaction fee. Often these details are difficult to locate — surprise, surprise — so contact your card’s customer service if needed.

If you’re paying a 4 percent fee with every purchase, you either need to 1.) get another card or 2.) find another way to fund your purchases.

We all work hard for our money so why let it fall out of your account just because you were being a little lazy? Plug the leaks and keep that money for more important things.

Photo by MJTR (´・ω・) / Published under Flickr Creative Commons License 2.0.


  1. Yen & You: Plugging the money leaks in your credit cards…

    Want to use your credit card from your home country while living in Japan? Better know what those foreign transaction fees will cost you….

  2. If you do any international fee you have to find a card with a less than 1% int. fee. Like Joshua said, you’ll get killed on the fees and it’ll make your trip that much more expensive.

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