Credit Card Currency Transaction Fee Settlement

by Ryan Guina

Earlier this year, a class action lawsuit was brought against several major credit card companies concerning their foreign currency transaction fees. The class action lawsuit alleged that the credit card companies “conspired to set and conceal fees, typically of 1-3% of foreign transactions, and that Visa and MasterCard inflated their base exchange rates before applying these fees.”

It appears as though the settlement amounts for the class action lawsuit – Foreign Currency Conversion Fee Antitrust Litigation (MDL 1409), have been announced. The tentative agreement by the defendants is to pay $336M to settle claims and pay attorney fees.

Are you eligible for a settlement? If you made a transaction (purchase, cash advance, cash withdrawal or internet transaction) in a foreign currency on a Visa-, MasterCard- or Diners Club-branded credit, charge or debit/ATM card issued in the United States at any time from February 1, 1996 to November 8, 2006, you may be a member of the Settlement Damages Class. This does not mean you had to leave the country, only that you had to make a transaction in a foreign currency, including on-line purchases.

There are 3 claim options:

Refund Option 1 – Request an Easy Refund of $25. This Option is recommended if you traveled outside of the U.S. for less than one week or had foreign transactions of less than $2,500 using your eligible cards during the 1996 to 2006 period. (Green Form); OR

Refund Option 2
– Request a Total Estimation Refund based on typical spending during travel and your answers to a few questions about your own travel outside of the U.S. This Option is recommended if you traveled outside of the U.S. for more than one week or had foreign transactions of more than $2,500 using your eligible cards during the 1996 to 2006 period. Refunds will be a maximum of 1% of estimated foreign transactions. (Blue Form); OR

Refund Option 3 – Request a refund based on information that you provide concerning your Annual Estimated foreign transactions during the 1996 to 2006 period. This Option is recommended if you had extensive foreign travel or foreign transactions and are willing to provide year-by-year information. Refunds will be a maximum of 1% to 3% of foreign transactions. This is the only Option you can use to get a refund for corporate card use. (Red Form)

Final approval of the settlement has not yet occurred. The hearing for final approval of the settlement is scheduled for March 31, 2008, and the deadline for filing a claim is May 30, 2008.

Our situation: My wife and I lived and traveled extensively outside the US during this time period while serving in the military. We just received the claim form in the mail, and need to decide what to do.

Which option should we choose? We can choose Option 1 ($25), or Option 2 (an estimated claim).  We do not have accurate records for this time period so we will have to consider out roptions carefully. There are pros and cons to each.

Option 1 – quick, easy, pretty much guaranteed. Maxes out at $25.

Option 2 – more work, longer claims processing, not guaranteed. Could return more than $25.

I will have to do some research to determine how much work it will be to do Option 2, otherwise, Option 1 will be fine. This is money we weren’t expecting, and we don’t need it to pay a bill, so it is a nice benefit. Depending on how much work it is, I may just take the automatic $25. I’m going to think about it this weekend, and try to find supporting paperwork.

Which would you choose?

For more information go to the Currency Conversion Fee Settlement page or the FAQs.

Published or updated December 13, 2007.
Print or e-mail this article:

{ 26 comments… read them below or add one }

1 Amanda D

I picked option 1. Just wasn’t worth my time to sort through all the records for the past few years, for the chance to get $30 or still have to fall back on option 1.


2 Free From Broke

My wife and I recently received a letter for this. We’re going with option 1 which would be $50 total for us. We’ve traveled overseas on vacation but can’t say we have great records of our transactions.


3 Ryan

If it was just a vacation or two for me, then I would take the $25. However, I lived in the UK for 2+ years, and traveled extensively through Europe and the Middle East on other occasions. My wife is in a similar situation. I am sure I spent over $2,500 per year with my credit/debit cards, but I also made many purchases on military installations, which do not process the transaction fees, because the purchases are in US Dollars. It will be difficult to estimate how much either of us spent.Further compounding it is the accounts I used when I lived over there are now closed, so I will have to contact the banks to get the account information. I think I will have to do a little more research!


4 Mrs. Micah

Duuude. I’m eligible! I’ll see if I can get the $25–it would be useful and I only spent a couple months over there and less then $2,500. 🙂 2003.


5 Credit Helper

I didn’t spend all that much, but at the same time, I feel like I got charged more than $25. I lived in the UK for a while, and used my credit card quite often. I forget if they charged me for foreign conversion every time though…it’s been a while.

Either way, I think $25 is rather meager, and it’s really more about the lawyers payday than anything else.


6 Ryan

I agree, Credit Helper. This will be a huge payday for the lawyers, and a very small return for each member of the settlement class. But for many people it is “free money” so they will have no problem accepting it.


7 Steve (Brip Blap)

I took the $25. Back in the mid 90s, I was part of a similar settlement covering the time I lived in Russia, and boy oh boy did I sort through my records. I can’t remember the exact amount, but it was approximately $400 when I totaled it up. Ryan, if you were living overseas fulltime, total it up, it’s worth it.

This lawsuit covered a period where I was traveling for business (i.e. using the corporate American Express which wasn’t covered in the settlement) and one trip to Spain & Italy with my wife, so I guessed $25 was probably fair enough.

Hey, $25 is $25. I’ll take it.


8 paidtwice

If I were you Ryan, I’d see how many records I could easily find. Sure, they owe you more than $25. But if you spend 25 hours finding records to get back $250, is it worth it? You have to decide how much time you are willing to spend for how much you think it might be worth.

As for me, I took one single out of the US vacation in 2000 and charged the hotel room and meals to the credit card (ah, the evil credit card using days). So, I applied for the $25. I’m kind of making money, I think. heh.


9 Kara

If you choose option 2, it doesn’t require any additional work to find all of your old records. It just asks you to estimate how many days you spent traveling out of the country at that time, and what activities you were doing while there (e.g., traveling for business, visiting friends and family, etc.). Not a lot of work for some extra money if you spent more than one week out of the country.


10 Ryan

Steve and paidtwice,

Taking the $25 would be the quick and easy way to go. I have no records whatsoever because I have since closed the bank account I primarily used during this time period (I used a MasterCard debit card back then). I believe as part of the settlement, the banks are required to provide records free of charge, but even so, there will be a lot of extra legwork on my end.

Even though I lived overseas full time, many of my purchases were made on a military installation in US dollars; the settlement only covers foreign currency transaction fees. So I would have to further sort through the records to find which transactions qualify.

I could just make an estimation – I lived overseas for 3 years during this time period and traveled extensively in Europe and the Middle East as well. I’m sure that I made well over $2500 worth of transactions on my cards during this time period. The question is – how much time will I have to put into this for what return? Or do I put 10 minutes into it for $25 and leave it at that?


11 Ryan

Hi Kara,

Thanks, I’ll look into it a little more closely. I spent well over 3 years living and traveling out of the country during this time period.


12 deepali

I think you’re confusing option 2 and option 3. Option 2 simply requires two sets of information – how much time you spent overseas (an estimate) and in which categories this travel would fall in (business, vacation, etc). You will then receive 1% of the estimated costs of this travel, as determined by the settlement administrator. So, if you think you spent more than $2500 in foreign currency transactions on your credit cards, this is definitely the option to go with. No documentation required.

If you’ve spend significant amount of time overseas, then it might be worth trying option 3. The downside here is that you have to have some accounting of your transactions, and documentation. You can get this from the bank that administers your card, but if you have lots of cards and lots of transactions, it could be a lot of time. On the other hand, you only have to provide this documentation if you are audited.

I just did Option 2. Took me about 20 minutes. I would only choose Option 1 if you have only been out of the country for a little while, or you used cash or Amex.


13 Ryan

Hello deepali,

I looked over the information again, and you are right. Thanks for pointing that out. I think I can make a realistic estimation using Option 2. I don’t think I want to go with Option 3. I will have to do this for both myself and my wife (we both lived overseas at different times and at different locations), and to be quite honest, I don’t want to hassle with the records. Thanks for the head’s up.


14 Shawn

Deepali is right about Options 2 and 3. Go ahead and claim Option 2. The least you will get is $25, but you will probably get more. That’s what I think is implied by the line, “This Option is recommended if you traveled outside of the U.S. for more than one week or had foreign transactions of more than $2,500 using your eligible cards during the 1996 to 2006 period.”

Option 2 asks for the total # of days (estimate) that you spent overseas. I’m guessing they’ll use some cooked up calculation to determine how much on average someone would spend per day, and therefore how much of a settlement you can get. I did Option 2 because I’ve spent 8 weeks abroad in those 10 years. We’ll see what happens!


15 Ryan

Hi Shawn, I appreciate the comment! I think that is the way for me to go as well. I lived overseas for almost 3 years during that time period, and I traveled extensively other times as well. However, I also spent a lot of money in dollar based transactions on the military installation I was stationed at, so I won’t claim a huge amount.

I appreciate the comment, and I wish you the best of luck with your claim as well.


16 Benjamin

Woa! I’m debating what the rate they think we spend each day out of the country is. I’ve been out of the country for a number of years and used my credit card for all my transactions. So… is 1% of whatever they think I spent during those years better than what 1-3% of what I actually spent?


17 Ryan

If you have the records, I would probably send in the actual amount you spent. That way you have proof your number is correct. I have no idea what rates they use to determine the actual rate.


18 George Spelvin

The dollar amount of your refund under Option 2 is based on the U.S. Department of Commerce Annual Survey of International Air Travelers, as explained in the question/answer section of the settlement Web site. Hint: If you were able to check “business” as your main reason for travel, instead of the other choices in Option 2, you’ll receive a larger payment. Here is a link to the Q & A section of the settlement Web site, with an excerpt from the section explaining how the refunds are calculated under the various options:

“Refund Option 1 will provide an easy refund of $25. Refund Option 2 will be based on typical spending patterns during travel outside of the U.S. Claimants who choose Refund Option 2 will provide an estimate of the number of days they spent outside of the U.S. during the class period and the frequency of their travels for the purpose of business, visiting friends or relatives, vacation/leisure, or other travel purpose. Travel purpose and time outside the U.S. are factors captured in the U.S. Department of Commerce annual Survey of International Air Travelers, and can be used as predictors of trip expenditures outside of the U.S. The Settlement Administrator will calculate the amount of the refund under Refund Option 2 using an algorithm. The algorithm is designed to provide an estimate of a Claimant’s refund using the information supplied in the Claimant’s Refund Option 2 claim form and other data, including from the U.S. Department of Commerce’s survey noted above. The algorithm calculation for a Refund Option 2 claim will be based on a 1% foreign transaction fee. Refund Option 3 will utilize the bank that issued your credit and/or debit/ATM card and the dollar amount of your foreign transaction fees (apart from any alleged increase in base exchange rates). Refunds for all claims, regardless of the option chosen, will depend on the amount of money available to pay claims and the number and total dollar value of all valid claims filed.”


19 George Spelvin

I would add that the deadline to submit a claim was May 30, 2008. If you did not submit your claim by that date, you are out of luck. I would also note that it’s quite likely that more claims were submitted than there is money available to pay them, so don’t start planning your next trip to Aruba based on this payment. Also, it could be months (or possibly even years) before these refunds are disbursed, depending on the status of any legal challenges that are filed. For this reason, you would be well advised to keep your address updated with the case administrators. You can do that via the link in my post above.


20 Ryan


Thanks for the added info. It may be a little late for some people to take advantage of this settlement, but I’m sure, as you mentioned, that plenty of people already did.

Thanks for stopping by.


21 Ryan

Sorry George,

I haven’t heard anything yet. I’ve read it may take a few years before the dust settles. My guess is this will keep lawyers in business for a long time! 😉


22 George

Now that the final closure date has passed, does anyone know if a timetable for payments has been established? I assume that people who chose option #1 will be processed first (since they have the least complicated paperwork), but you know what happens when you assume. Anyway, I chose option #2 and haven’t heard anything.


23 JP

I just had this “Fee” assessed to me and I didn’t even leave the country! I bought something on E-Bay and transferred the money to my PayPal account. I got charged a fee of 3% and my bank never dealt with anyone outside the country. I think my bank charged me the fee but they are just a pass through to Mastercard who is recieving the fee. It bothers me that Mastercard’s central database processed the information together through three different financial institutions to evaluate the situation to see if they could finagle the “fee” out of the circumstances and yet charge it to me in a fassion such that I can’t process the complaint via means other than “fee” dispute with my bank. I’m not confused about the orwellian twitch I have crawling up my neck but I am about how they are still doing this?


24 Ryan

JP: I don’t know how the credit card companies get away with charging so many fees. I’m not familiar with the situation you wrote about, but it seems like something I would call about to try and have removed. However, there is a time limit I would spend. If the fee wasn’t very much and it took a long time to hav the fee removed, I might consider giving up as it wouldn’t be worth my time.


25 Carol Kelly

I chose Option 2 and mailed it in April 2008. Has anyone received any $?

Carol Kelly


26 Stewie

11 appeals are challenging the final judgment!!! What a joke. I doubt we’ll ever see a penny at this rate. It explains a lot about our legal system. Shame.


Leave a Comment

Previous post:

Next post: