FAQs on Credit Cards With No Foreign Transaction Fee
What are foreign transaction fees?
A foreign transaction fee is a surcharge on purchases processed outside of the United States. You can be charged this fee whether you are traveling overseas and use your credit card, or you make purchases online from a website based outside the United States. They are assessed by both your payment network (i.e., Mastercard or Visa) and your bank or other financial institution. The total is usually about 3% of your transaction amount.
Say you have a great time in Europe with your family and rack up $10,000 in credit card charges for hotels, food, and souvenirs. If you use a credit card with foreign transaction fees, that’s an extra $300 you have to pay back to your credit card company using the 3% average. The good news is there are plenty of cards that don't charge a foreign transaction fee. We included the best ones in the list above.
When do I pay a foreign transaction fee?
When a foreign transaction fee applies to a purchase, you won't see it until you receive your credit card statement. That's because the fee is charged by the credit card company, not by the merchant. For example, if you pay $2,000 for a hotel stay in another country, your receipt from the hotel will just say $2,000 or the equivalent amount in the foreign currency. When your statement arrives, it will include the additional charge.
How do I avoid foreign transaction fees?
Here are five ways to dodge foreign transaction fees and international ATM fees.
- Get a credit card without a foreign transaction fee.
- Open a bank account that doesn't charge foreign fees.
- Exchange currency before traveling.
- Avoid using foreign ATMs.
- Find out if your bank has a foreign partner.
Do all major credit card companies charge foreign transaction fees?
The major credit cards charge foreign transaction fees ranging from 0% to 3% of each purchase processed internationally. Some credit card issuers don't charge foreign transaction fees on any of their cards, including Capital One, Discover, and USAA. Other credit card issuers charge a fee on some of their cards but not others.
How much does Mastercard credit cards charge in foreign transaction fees?
There isn't a fixed foreign transaction fee for Mastercard credit cards. It varies depending on the issuer and the credit card. Some issuers, such as Capital One and USAA, don't charge a foreign transaction fee on any of their Mastercard (or Visa) credit cards.
How much does Visa charge in foreign transaction fees?
Visa charges foreign transaction fees ranging from 0% to 3% on purchases processed outside the U.S. It all depends on which card and issuer you are using. Typically, Visa travel credit cards don't charge a foreign transaction fee. Some issuers, such as USAA and Capital One, don't charge a fee for any of their Visa (or Mastercard) cards.
How much does Discover charge in foreign transaction fees?
Discover doesn't charge foreign transaction fees on any of their current credit cards. Only cards issued before 2011 (now discontinued) had a foreign transaction fee.
How much are American Express foreign transaction fees?
American Express charges a foreign transaction fee that ranges from $0 to 2.7% of the purchase amount. There are several American Express credit cards that don't charge a foreign transaction fee. In fact, most of their travel credit cards don't charge a fee on international transactions.
How much does the Bank of America charge in foreign transaction fees?
The Bank of America charges a foreign transaction fee ranging from 0% to 3%, depending on the card.
Does Capital One charge a foreign transaction fee?
Capital One does not charge a fee for using your credit card for foreign currency transactions. That goes for all Capital One credit cards. They all come with a 0% foreign transaction fee.
What does Citibank charge in foreign transaction fees?
Citibank charges a foreign transaction fee that ranges from 0% to 3% on purchases processed internationally. In other words, some of the cards don't charge a fee, while others do. In general, stick to the travel reward cards and avoid using cashback and balance transfer credit cards, such as Citi Double Cash and Citi Simplicity, if you plan to go abroad.
Will you get charged with a foreign transaction fee if you book an international trip online?
You could. It all depends on if your payment gets routed through a bank that is not in the United States. This can happen when you book through a U.S. website if the transaction is processed outside the United States. Therefore, it's a good idea to always use a credit card with $0 foreign transaction fees when making international purchases.
Which issuers are most widely accepted internationally?
Something to consider when comparing credit cards that don't charge foreign transaction fees is whether they are accepted where you plan to travel. A $0 foreign transaction fee credit card is useless if you can't use it. Mastercard and Visa are the most widely accepted credit cards. Discover doesn't charge a foreign transaction fee on any other of their cards, but they are not as widely accepted.
Do foreign transaction fees change based on the exchange rates?
Yes, and no. Exchange rates and foreign transaction fees are independent of each other. If you have a card with a 2% foreign transaction fee, you will pay that commission regardless of what the exchange rate happens to be that day. However, the worse the exchange rate is, the more dollars you will have to pay for the purchase, which will increase the foreign transaction fee.
What is a dynamic currency conversion, and will it affect the cost of my foreign transaction fee?
Dynamic currency conversion is a nifty service some merchants offer where they convert the cost of the purchase into dollars before you pay. This allows clients to get a better sense of the cost of a purchase. You can then choose to make the purchase in dollars or the local currency. Credit cards typically offer a better exchange rate than merchants, so it is usually better to pay in the local currency. Merchants generally mark up the exchange rate by 1% to 3%. The dynamic currency conversion will not affect your foreign transaction rate because most credit card issuers don't change their foreign transaction fee based on dynamic currency conversion. The exception is the U.S. Bank, which does charge a lower foreign transaction fee (2% instead of 3%) when you pay in U.S. dollars. However, a bad exchange rate will increase the dollar amount of the purchase, which will increase the cost of the foreign transaction fee.