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

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.

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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No foreign transaction fee credit card guide

Rates last updated June 20th, 2018
Name Product Product Description Foreign Currency Conversion Fee (MC) Foreign Currency Conversion Fee (VISA) Foreign Currency Conversion Fee (AMEX) Overseas ATM Withdrawal Fee
Luxury Card Mastercard® Titanium Card™
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
0% of transaction value
Luxury Card Mastercard® Black Card™
Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
0% of transaction value
Uber Visa Card
Get 4% points back on dining, 3% on travel, 2% on Uber rides and online shopping and 1% on other purchases, and redeem points for Uber credits, gift cards or cash back.
0% of transaction value
Bank of America® Travel Rewards Credit Card
20,000 online bonus points offer. Ditch the restrictions of typical airline rewards cards. Any airline, any hotel, anytime. No blackout dates.
0% of transaction value
HSBC Cash Rewards Mastercard® credit card
Earn unlimited 1.5% cash rewards on all purchases.
Venture® from Capital One®
Earn 50000 bonus miles once after spending $3,000 on purchases within the first 3 months from account opening.
0% of transaction value
Chase Sapphire Preferred® credit card
Earn 50000 points when you spend $4,000 on purchases within the first 3 months of your account opening, and an additional 30,000 points when you spend a total of $30,000 on purchases within the first year of your account opening.
0% of transaction value
Bank of America® Premium Rewards® Credit Card
Earn unlimited 2 points for every $1 spent on travel and dining purchases and 1.5 points for every $1 spent on all other purchases.
Chase Sapphire Reserve®
Earn 50000 BONUS POINTS after spending $4,000 on purchases in the first 3 months from account opening* — that's $750 toward travel when you redeem through Chase Ultimate Rewards®.
0% of transaction value
The Platinum Card® from American Express
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.
0% of transaction value
Luxury Card Mastercard® Gold Card™
Earn points every time you spend. Luxury Card enhances your purchasing power by providing you with one (1) point for every one dollar ($1) you spend. Every purchase gets you closer to the rewards you want.
0% of transaction value
United MileagePlus® Club card
Enjoy United Club membership, Premier Access® travel services, free checked bags, plus earn miles on every purchase.
0% of transaction value
Alaska Airlines Visa Signature® Card
Buy one ticket, get one for just the taxes and fees ($0 fare plus taxes and fees from just $22) after you make $1,000 or more in purchases within the first 90 days of your account opening. There are no blackout dates.
0% of transaction value
Platinum Delta SkyMiles® Credit Card
Earn 5,000 Medallion® Qualification Miles (MQMs) and 35,000 bonus miles after you spend $1,000 in purchases on your new card in your first 3 months.
0% of transaction value

Compare up to 4 providers

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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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