It’s no secret that credit card companies charge fees when a purchase is run as a cash advance or when a purchase is charged in a foreign currency. Recently I’ve noticed a growing trend with credit card issuers not allowing their cardholders to set a limit cash advances or foreign currency purchases.
I have no problem with card issuers charging these fees. I understand that transactions that run as a cash advance are more likely to lead to late payments or defaults and that charges are incurred in purchasing foreign currency.
What I object to is the fact that consumers are unable to opt out of making any purchases that would incur these fees is absurd. At the moment it’s possible for a consumer to make a purchase on their credit card that results in them being charged a cash advance fee, without them being aware that this purchase would be processed this way.
If a consumer was allowed to set their cash advance limit to $0, the transaction would simply be denied. At the present time most card issuers are requiring cardholders to have at least a percentage of their total credit limit available for cash advances and it’s not possible to limit foreign currency transactions at all.
Either credit card issuers need to self regulate and do the right thing by their cardholders and allow them to set a cash advance limit and foreign currency limit or government regulators need to step in and force them to make these changes.
Do you agree? Should consumers have the right to set their own cash advance and foreign currency limits? If you don’t, explain why.
