Skip to content

Foreign transaction fees: Everything you need to know

A foreign transaction fee is a fee that a bank charges when you use your card outside of your home country. Foreign transaction fees typically range from 0% to 3% of the amount of the charge and are also charged when you make a purchase from an online merchant that is located outside your country

If you’re planning to travel abroad, you’ll want to make sure you know if you’re going to get charged a foreign transaction feee. Here’s what you need to know about these fees.

When do you get charged a foreign transaction fee?

Any time you make a purchase outside the country where your car was issued, you’ll be charged a foreign transaction fee if your card charges one. This includes purchases made online with merchants based abroad. (I found this out the hard way when I used a rewards card to license some software for a project from a company in Germany.)

Do I pay a foreign transaction fee if I pay in U.S. dollars?

A foreign transaction fee is a fee for making a transaction outside your home country, not for making a transaction in another currency. Some places abroad, especially restaurants and shops that cater to tourists, will offer you the option to pay your bill in U.S. dollars. Paying in U.S. dollars won’t help you avoid a foreign transaction fee and will likely be even more expensive than paying in local currency

This practice, known as dynamic currency conversion, isn’t a scam but it is always a bad deal. Dynamic currency conversion almost always offers a (much) worse exchange rate than your bank will give you if you process the charge in local currency. When using your credit card abroad, simply process the transaction in local currency and let your bank do the conversion.

Should I use my rewards card that charges a foreign transaction fee abroad?

Most cards that charge a foreign transaction fee charge 3%. (American Express is an outlier; its foreign transaction fee on many cards is 2.7%.) In most cases, you will be better off by using a card that charges no foreign transaction fee when making purchases abroad. A 3% foreign transaction fee would eat up the 3% rewards you might earn in a credit card bonus category. And there are no annual fee credit cards that offer 1.5% rewards on every purchase with no foreign transaction fee.

How to find you card’s foreign transaction fee

Your card’s foreign transaction fee is listed in your card’s pricing and terms page. This information was shown to you when you applied for your card and was provided by mail or electronically when your card was approved.

If you don’t have access to a copy of your card’s pricing and terms sheet, you can request a copy from your card’s customer service. Or you can simply ask your card’s customer service department what the foreign transaction fee on your card is.

How do I avoid a foreign transaction fee?

The easiest way to avoid a foreign transaction fee is to use a card that has a 0% foreign transaction fee. Most cards geared toward travelers have no foreign transaction fees. Chances are that you have a card in your wallet that charges no foreign transaction fee.

Cards with no foreign transaction fee and no annual fee

We don’t publish a list of best cards with no foreign transaction fee because there are so many, but here are a few cards we like that don’t charge foreign transaction fees and have no annual fee.

Capital One Quicksilver – 1.5% cash back rewards

As a general rule, Capital One’s credit cards don’t have a foreign transaction fee. If you want a basic card with decent rewards to use abroad, the Capital One Quicksilver Cash Rewards Credit Card is a solid choice. While you’re stateside, the card’s 1.5% rewards pale in comparison when you can get 2% cash back everywhere, but it has one of the highest rates of cash back on general purchases you can get on a card with no foreign transaction fee.

Capital One Quicksilver Cash Rewards Credit Card welcome bonus:

Earn a one-time $200 cash bonus once you spend $500 on purchases within 3 months from account opening.

Click here to learn more and apply.

The link above is a referral link. Someone on our team may earn points if you apply and are approved to the link above. We always show you the best offer, and this is the best offer we know about on this card.

Capital One Quicksilver Cash Rewards Credit Card card art

Quicksilver Cash Rewards Credit Card at a glance:
Annual fee: $0
Rewards: 5% hotels and rental cars booked through Capital One. 1.5% other purchases.
Benefits: Purchase protection. Extended warranty. Price protection. MasterRental. Trip cancellation/interruption. Baggage delay. Lost/damaged luggage.

Amazon Prime Visa

If you’re an Amazon Prime member, the Amazon Prime Visa is probably a card that you have anyway. Not only is it one of the best cards for Amazon.com purchases, but it has a 0% foreign transaction fee. That makes it a great no-annual-fee card to use abroad.

card_name welcome bonus:

bonus_miles_full

Click here to learn more and apply.

Our take on the welcome bonus: The $100 Amazon gift card offer is the standard welcome bonus offer on this card. We’re unlikely to see an increased welcome offer on this card.

The link above is our affiliate link. We always show you the best offer, and this is the best offer we know about on this card.

Amazon Prime Visa from Chase card art

Amazon Prime Visa at a glance:
Annual fee: $0 (requires paid Amazon Prime membership)
Rewards: 5% Amazon.com, Whole Foods, Amazon Fresh. 3% Chase Travel. 2% gas, restaurants, local transit and commuting. 1% other purchases.
Benefits: Extended warranty. Purchase protection. Amazon 0% financing offers.

Frequently asked questions

Why am I being charged a foreign transaction feee?

Your credit card’s schedule of fees states which fee you’ll be charged when you make a purchase abroad. If you make a purchase abroad, regardless of currency, you will be charged this fee.

Is it better to exchange money or use a credit card abroad?

Using a credit card with no foreign transaction fee abroad is safer and cheaper than exchanging cash. Banks and cash exchange kiosks will charge a fee for exchanging cash. If you must use cash abroad, withdrawing local currency from a debit card ATM with a bank that doesn’t charge a foreign transaction fee is probably your best bet.

About the author

  • Aaron Hurd

    Aaron Hurd is a credit card, travel rewards, and loyalty program expert. Over the past 15 years, he has authored over a thousand expert contributions published by leading outlets including WSJ, TIME, Newsweek, Forbes, NerdWallet, The Points Guy, Bankrate, CNET, and many others. He has also served in consulting roles for many of these same outlets, designing content strategy, hiring teams of teams of editors and contributors, developing thought-leadership pieces, and ghost-editing for senior editors. Aaron is well-known in the miles and points community and regularly presents about travel rewards at conferences like the Chicago Seminars and Minnebar. Aaron has enjoyed the game of optimizing credit card rewards since getting his first credit card shortly after he turned 18. He started learning about credit cards and travel rewards from the (now defunct) FatWallet Finance forums and FlyerTalk. He holds more than 40 open credit cards and has first-hand experience with almost every major credit card product.

    View all posts