How to Avoid Foreign Currency Exchange Fees | finder.com
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How to avoid foreign currency exchange fees when traveling

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Are you going overseas? Avoid foreign transaction fees with the right travel money, so you can save more on your holiday.

Using a credit card while traveling overseas may be convenient, but it can get quite costly when you factor in rates and fees. Learning how to get the most ideal rates and how to avoid unnecessary fees can go a long way towards saving you cash that could be better spent on your travels.

Our choice of card with no foreign transaction fees: Hilton Honors American Express Card

  • Earn 75,000 Hilton Honors Bonus Points with the Hilton Honors American Express Card after you use your new card to make $1,000 in eligible purchases within the first 3 months of card membership.
  • Earn 7x Hilton Honors Bonus Points for each dollar of eligible purchases charged directly with a hotel or resort within the Hilton Honors portfolio of brands.
  • Earn 5x Hilton Honors Bonus Points for each dollar of eligible purchases at U.S. restaurants, U.S. supermarkets, and U.S. gas stations.
  • Earn 3x Hilton Honors Bonus Points for all other eligible purchases on your card.
  • No Foreign Transaction Fees. Enjoy international travel without additional fees on purchases made abroad.
  • Enjoy complimentary Hilton Honors Silver status with your card. Plus, spend $20,000 on eligible purchases on your card in a calendar year and you can earn an upgrade to Hilton Honors Gold status through the end of the next calendar year.
  • No Annual Fee.
  • Terms Apply.
  • See Rates & Fees
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No foreign transaction fee credit card guide

Name Product Currency Conversion Fee Annual Fee APR (Annual Percentage Rate) for Purchases
None
$0 annual fee for the first year ($95 thereafter)
17.99% to 24.99% variable
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months.
None
$450
17.99% to 24.99% variable
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months.
None
$0 annual fee for the first year ($95 thereafter)
17.74% to 26.74% variable
30,000 bonus miles after you use your new card to make $1,000 on purchases within the first 3 months. Rates & Fees
None
$250
See Rates & Fees
50,000 bonus Membership Rewards® Points when you spend $2,000 in the first 3 months Rates & Fees
None
$0
17.74% to 26.74% variable
Earn 75,000 Hilton Honors™ Bonus Points after you spend $1,000 in purchases on the card within your first 3 months of card membership. Rates & Fees
None
$550
None (Charge Card)
Get 5x Membership Rewards® points on flights booked directly with airlines or with American Express Travel and 5x points on eligible hotels booked on amextravel.com. Rates & Fees
None
$0 annual fee for the first year ($89 thereafter)
17.99%, 21.99% or 24.99% variable
Enjoy 70,000 bonus miles after spending $5,000 on purchases in the first 90 days.
None
$95
17.74% to 26.74% variable
Earn 125,000 Hilton Honors™ Bonus Points after you spend $2,000 or more in purchases with your new card within the first 3 months of card membership. Rates & Fees
None
$0 annual fee for the first year ($95 thereafter)
17.74% to 26.74% variable
Enjoy a $0 annual fee on the first year and earn up to 2 Starpoints® for every dollar of eligible purchases. Rates & Fees
None
$195
16.99% variable
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.

Compare up to 4 providers

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What rates and fees should I be watching out for?

When spending abroad with your card, you will encounter one or both of these—the foreign currency exchange rate and the foreign currency conversion fee. You may notice first of all, that your card exchange rate is less favorable than the listed interbank rates. This may be to incorporate a small profit margin for your card company. Next, you’ll be charged a foreign transaction fee or currency conversion fee on each overseas transaction. This is typically 3% of the transaction amount, which can amount to hundreds of dollars if you consistently swipe your card for big ticket items.

These fees can be avoided though. It’s all about choosing the right travel money product. You can compare some of your options below.

How can you avoid foreign currency exchange fees?

No foreign transaction fee credit cards

If you’re a frequent traveller to faraway lands, it is advisable to seek out credit cards designed for traveling. These cards advertise low or no fees on foreign transactions, are connected to extensive worldwide ATM networks, and in some cases will even waive any extra fees for currency conversion. You may pay a slightly higher annual fee for this type of credit card, but the money you’ll save on overseas spending might balance that out.

Using debit cards

Most U.S. debit cards will charge foreign currency exchange fees when used overseas. To save costs on your next holiday, look for a debit card with low or no foreign transaction fees. Unlike a credit card, debit card transactions don’t incur interest and you can withdraw funds without being charged a cash advance fee. If your card belongs to an international ATM alliance, you can also save on ATM withdrawal costs.

Frequent flyer credit cards

Rewards are typically more expensive when it comes to annual fees and interest rates, but you can find some with no foreign transaction fees. If you’re usually able to repay your balance each month, a rewards credit card with no foreign transaction fees could be a great way to get rewarded for your holiday expenses.

Compare rewards credit cards here

Using cash

Carrying the local currency in cash is another way you can avoid foreign transaction fees on day-to-day holiday expenses. It’s not exactly safe to carry all of your travel budget in cash though, so look for a card that has low ATM withdrawal fees if you’re considering paying in cash.

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What are the other costs and features to consider?

Even if your travel money card or strategy helps you avoid currency conversion fees, there are still other costs and factors to consider. When you’re comparing your travel money options, keep the following in mind as well:

  • ATM fees. If you’re not careful, you could end up paying fees for using an overseas ATM twice. Unless your bank has a global ATM alliance that allows you to make international withdrawals for free, you could be charged by your bank and the issuing bank for withdrawals and even account balance enquiries when traveling.
  • Annual fee. The price for paying low or no foreign transaction fees on your credit card is often a high annual fee. Before committing to any one card, make sure that the savings and rewards you’ll reap outweigh the annual fees for the card. You can compare cards with no annual fee or foreign transaction fee here.
  • Supported currencies and global acceptance. Make sure the card you’re using will work in your holiday destination. Make sure that your credit card is accepted worldwide, as you can expect with a Visa, Mastercard or American Express. If you’re using a travel money card, make sure it supports the local currency you’ll be using or doesn’t charge a currency conversion fee.
  • Merchant fees. You might find in some places that the merchant adds a surcharge to your transaction for using a foreign issued credit card. It would be prudent to check your bill before paying to avoid that fee wherever possible, and to have alternative travel money options on hand in those events.
  • Exchange rates. Check to see how often exchange rates are updated and if there are additional fees for currency conversion. A good way to avoid negative exchange rate movements is to lock in the rates with a travel money card.
  • Additional travel perks. Complimentary travel insurance, a 24/7 global emergency customer service line and frequent flyer rewards programs are all extras that could offer some added value to your card.

How often you travel, the length of your stay, and the way that you spend money abroad all factor into your decision about the type of credit, debit or travel card to use abroad. Be sure to consider your typical expenses and everyday spending needs when choosing a card that will offer you the most value.

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Adrienne Fuller

Adrienne Fuller leads the publishing team at finder.com. She has one goal: to deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. When she's not helping folks save money, she's hiking with her two Catahoulas around her home in San Diego.

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US Credit Card Offers

Important Information*
Deserve® Classic Card
Deserve® Classic Card

APR

24.49
variable

Annual fee

0 For the first year
More info
Luxury Card Mastercard® Gold Card™
Luxury Card Mastercard® Gold Card™

APR

16.74
variable

Annual fee

995 For the first year
More info
First Access Visa Card®
First Access Visa Card®

APR

29.99
variable

Annual fee

75 For the first year
More info
Indigo® Platinum Mastercard® Credit Card
Indigo® Platinum Mastercard® Credit Card

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23.9
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