If you plan on hitting your credit card up for a cash advance while traveling this summer or if you intend to use your credit card overseas  . . . . then watch out!

For the past few years bank credit card issuers in the U.S. have been quietly jacking up cash advance fees. The fee increases have been slipped into cardholder agreements at the same time other changes have been made, such as modifying the APR or the way interest is calculated. For example, three years ago the majority of the nation's largest issuers would charge a $10.00 fee for a $1,000 cash advance. Today most of the top issuers will charge a fee between $30-$50 for the same cash advance. This is, of course, in addition to any interest charges. For small cash advances the fees have also gone up. Three years ago most issuers charged a $2 minimum cash advance fee plus interest. Today the minimum cash advance fees have zoomed up to as high as $20.00. Most charge a minimum cash advance fee of $5.00.

In addition to the increased fees, most bank credit card issuers charge a different interest rate for cash advances than the interest rate charged for purchases. Under current laws, this information does not need to be disclosed on a credit card solicitation or application. To verify what your credit issuer charges for cash advances it is necessary to read the actual cardholder agreement. If you are contemplating applying for a new credit card, then it is best to call the issuer before you apply to determine what APRs they charge for cash advances. In all cases the APR for cash advances is significantly higher than the interest rate for purchases.

Bank credit card issuers may also charge higher cash advance fees for quasi-cash advances such as purchases of travelers checks, casino chips, etc. There is generally a higher minimum and/or a higher percentage charged for these transactions than for taking a cash advance at a bank.

Speaking of casinos: this is probably the worst place in the world to take a credit card cash advance. Most casinos will charge a 5% handling fee on top of the fees charged by the card issuer.

Cash advances on bank credit cards have always been a bad deal. You get hit with a triple whammy. First you have to pay a fee, second you are assessed interest charges immediately, and thirdly the interest rate is usually higher on cash advances versus purchases. Now the triple whammy has even more impact. If you need cash while traveling use your ATM card instead. The extra fees you may have to pay at an ATM are a pittance in comparison to the cost of a credit card cash advance.

      In another disturbing trend for traveling credit cardholders is the increase in foreign transaction fees. Using credit cards overseas has always been a great deal, usually better than exchanging actual cash. For a very long time VISA and MasterCard's transaction network systems have imposed a 1% fee over the wholesale exchange rate. Even with the 1% fee, the exchange between transactions in foreign currencies to U.S. dollars beats most rates found on the street or in local banks of foreign countries. But over the past twelve months some credit card issuers have quietly increased the foreign transaction fee from 1% to 3%. The extra two percentage points is not charged by the VISA or MasterCard systems, rather it amounts to a surcharge imposed by the bank issuer. To make matters worse the extra fee is transparent, buried in the transaction exchange. Your cardholder statement will not break out the fee separately.

By the way, last summer American Express doubled its foreign transaction exchange fees from 1% to 2%.

If you plan to travel overseas this summer then make sure you call your current card issuer(s) and ask them what they charge for foreign transactions. Also review the latest version of your cardholder agreement for details on using your card overseas.  For now, most of the U.S. issuers charging these higher fees are very large issuers. You might consider using cards that charge only the 1% network fee charged to all VISA and MasterCard cardholders. You should also consider using a debit card such as VISA Check Card or MasterCard's MasterMoney Card overseas. Travelers Cheques are another option.

One bit of final advice: if you do plan to go overseas and use credit cards, then make sure you call your card issuer(s) in advance and let them know. Sometimes, especially with cards issued by smaller banks, the card will be put on hold after one or two foreign transactions until the card issuer determines that it is you using the card. If someone is not at your home to verify that you are overseas, then you could be put in a real bind.

Also avoid taking cash advances from currency exchange firms overseas. Like casinos, cash exchange firms will impose a handling fee of 5% to 7.5% on top of what your card issuer will charge for converting the transaction into dollars and any other fees imposed by the card issuer for cash advances.

Why have credit card issuers raised cash advance fees, increased foreign transactions fees, and shut down cards used overseas after a few transactions?

The answer is: Fraud. Thieves love to get cash from stolen credit cards and casinos attract a large number of fraudulent cash advances. Card fraud is also a serious and growing problem overseas, whereby it has become highly sophisticated.

Bottom line is: Cash advances and foreign purchases are risky transactions. Credit card issuers are merely passing along this added cost to the cardholder.

BEATING  GAS  PRICES

With the price of gasoline hitting new peaks this summer you might want to consider using a rewards VISA or MasterCard that offers automatic rebates towards free gas. Also priceline.com has setup a program whereby you can bid and prepay future gasoline purchases. Here is a rundown of the top 10 gasoline reward bank credit cards.

1. Union 76 MasterCard issued by Associates National Bank. Offers unlimited 1% rebate on Union 76 purchases. 1% rebate on all other purchases up to a max rebate of $100 per year. 1-800-255-3270.

2. Amoco VISA issued by Associates National Bank. Offers 3% rebate on Amoco purchases and 2% on other purchases. Once annual limit of $70 in rebates is reached, rebates for Amoco purchases drops to 1%. 1-800-254-9695.

3. BP Oil issued by Bank One. Offers 3% rebate on BP purchases and 1% on other purchases. 1-800-BP-VISA1

4. Citgo VISA issued by Associates National Bank. Offers 1% rebate on all purchases subject to a max rebate of $40 per month.  1-800-GO-CITGO.

5. Conoco VISA issued by US Bank. Offers 3% rebate on Conoco purchases and 1% on other purchases. 1-800-764-9500.

6. Exxon MasterCard issued by GE Capital. Offers unlimited 3% rebate on Exxon purchases and 1% on other purchases. 1-800-YES-EXXN.

7.  Gulf MasterCard issued by Fleet Bank. Offers 4% rebate on Gulf purchases and 1% on other purchases with a $350 annual limit. 1-800-FOR-GULF.

8. Shell MasterCard issued by Chase Manhattan. Offers 5% on all Shell purchases and 1% on other purchases. 1-800-FREE-GAS.

9. Sunoco MasterCard issued by Bank of America.  Offers unlimited 4% rebate on Sunoco purchases and 0.5% for the first $12,000 of other annual purchases and 1.0% for annual purchases above $12,000. 1-800-786-6300.

10. Phillips 66 Mastercard issued by Associates National Bank.  Offers 2% on all Phillips 66 purchases, and 1% on all other purchases.  1-888-PHILLUP

Source: CardWeb.com, Inc. (www.cardweb.com)

WHIZ  KID

A seventeen year old CardWeb.com employee has garnered two first place national awards in separate Web site design contests. Totally Andris McKinley took home more than $10,000 in prize money, a high-end laptop computer, and international recognition. Mr. McKinley most recently took grand prize honors in the 'Project CyberTipline' Web site competition sponsored by the National Center for Missing & Exploited Children . He was named first place national award winner at the National Career Development Conference of DECA in Louisville, KY, attended by approximately 15,000 students. The online CyberTipline promotional pieces designed by Mr. McKinley will be distributed to more than 60,000 high schools this fall and will be used worldwide by the sponsor. A national press conference, unveiling his work, is planned this summer. Over 1,000 entries were submitted and judged by experts from AOL, Excite and Yahoo. In April, Andris took first place in the National Endowment for Financial Education's 'Financial Literacy Awards' program. The NEFE competition was based on the theme "The Credit Puzzle—How to Use It, and Not Abuse It." Mr. McKinley's Web site was selected, from among nearly 1,000 entries as the best in the nation. The award was presented at the annual meeting of the Jump$tart Coalition for Personal Financial Literacy in Washington, DC. Mr. McKinley has maintained his own personal Web site on skateboarding for the past five years (www.sirdna.com) and which currently produces consistent ad revenues. He has been employed as a Web site designer by CardWeb.com since 1998.

• 'The Credit Puzzle-How To Use It, and Not Abuse It'

• Click Here To View CyberTipline Winning Banner

TEEN  POWER

A survey released this month confirmed that teenagers frequently access the Internet, spend a significant amount of time online, and hold sizeable purchasing power. However the PricewaterhouseCoopers survey also found that teens rarely go online to shop. While parental permission and the ability to pay for products online are major barriers to online shopping, 78% of teens' purchases are paid for using a parent's credit card. This is bad news for the flock of new payment card companies seeking to develop teen payment systems.  The survey results also showed that most teens regularly go online to send or receive e-mail and nearly half indicate that e-mail is the primary reason they go online. While just over one-fourth of online teens cite shopping as a reason for regularly going online, only 2% indicate that shopping is their primary reason for going online. Other primary reasons teens cited for going online: research information 19%; play games 10%; use chat rooms 10%; and download music/video 6%.

IRISH  WAR

American credit card issuers are coming under heavy fire in Ireland this month. The Bank of Ireland attacked the MBNA and Prudential credit cards.  BOI says Prudential's Egg VISA and MBNA's VISA are misleading consumers with low teaser rates and high penalty fees. For example, the Egg VISA currently offers a six-month 4.7% APR for balance transfers and charges 20 pounds for going over the credit limit or making a late payment. BOI also attacked the co-branded Tesco VISA card issued by The Royal Bank of Scotland. The Tesco VISA offers a 4.9% intro APR for purchases and balance transfers thru January 2001. RBS also charges 12 pounds for a late payment or going over-limit on the Tesco VISA. BOI says it does not impose any such fees for late payments or exceeding the credit limit. BOI also says its best credit card rate of 12.9% tops the 15.9% go-to rate charged by Tesco and 17.9% go-to rate charged by MBNA. Household's GoldFish MasterCard also offers a 4.9% intro rate followed by an 18.9% APR.