How to avoid card fees and charges traveling overseas | finder.com
How to avoid travel money fees and charges traveling overseas

How to avoid travel money fees and charges traveling overseas

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

Save money on your vacation by sidestepping the fees.

To understand the hidden costs that come hand in hand with travel money, you have to read the fine print, understand your options and make the right choices. You can start saving for your next trip by being careful about what spend on and how you pay.

This guide breaks down and gives some tips on how to avoid the hidden costs and charges you’ll run into when taking travel money on vacation.

The major travel money costs and how you can avoid them

Fees for overseas purchases

  • Currency conversion fees

Currency conversion fees happen when you pay for something in a currency that is different from the default currency on your card. So, if you use your credit or debit card abroad and pay in the local currency, you’ll likely be charged a fee (around 3%). Imagine getting charged $60 on top of your $2,000 hotel stay — this fee can bleed hundreds of dollars on your vacation.

  • How to avoid them:

You can miss this fee completely by using a credit or debit card — like the Capital One 360 debit card — that waives the currency conversion fee.

Another way to avoid this fee is to use a prepaid travel card and preload the foreign currency you’re planning to spend (see what happens when your prepaid card doesn’t support the local currency).

  • Exchange rates

Exchange rates can either work for you or against you depending on currency fluctuations. Also, where you exchange your money is important too. Exchange rates at the airport exchange desks and foreign money changers will typically have less favorable rates because of an added margin for their own profit — this is either reflected in a lower exchange rate or a money exchange fee.

  • How to avoid them:

Avoid exchanging your money at airports or with random foreign money changers. You’re better of withdrawing cash from an international ATM to get a more competitive rate.

If you’re concerned about currency fluctuations, consider a travel card that’ll lock in the exchange rate when you load funds on the card. On the other hand, credit and debit cards will give you access to the daily interbank exchange rate, which is usually the most favorable rate.

Back to top

Fees for withdrawing cash overseas

  • ATM withdrawal fees

If you’re not careful, you could find yourself paying this fee twice for each overseas ATM withdrawal you make — once to your card provider and once to the ATM operator.

  • How to avoid them:

You can spare yourself this fee by getting your paws on a travel-friendly card with no overseas ATM withdrawal fees. Capital One and Discover are two of your options when looking for a debit card with no international ATM fees.

It’s also worth noting that Barclaycard and Bank of America are members of the Global ATM Alliance, which waives the fee when withdrawing from a member’s ATM. You could also minimize the fee by withdrawing a large amount of cash and limiting your ATM visits.

  • Cash advance fees

This steep fee, plus interest, is charged by credit card companies each time you make an ATM withdrawal with your credit card.

  • How to avoid them:

It’s simple, avoid this by not making cash withdrawals on your credit card. Instead, make sure to pack a prepaid travel card or debit card that you can use for overseas withdrawals.

Back to top

Fees using prepaid travel money cards

  • Account inactivity fees

If you’re not using your card, the provider might charge a monthly fee for maintaining your account following a period of inactivity, usually 12 months.

  • How to avoid them:

If you want to keep your account active, make a small transfer or purchase before 12 months on inactivity. The last thing you want is for your remaining funds to be slowly devoured by the monthly inactivity fee. Read our guide on how to claim your remaining travel card funds.

  • Account closure fees

When you close your travel money card, you may find that you’re charged an account closure fee.

  • How to avoid them:

There’s really no way to avoid this cost, unless you exhaust all of your funds on the card. Then you won’t have to worry about the fee for closing your card to get your remaining balance back.

Promoted
Travelex Money Card

Why we like: Travelex Money Card

Load GBP, EUR, CAD, AUD, JPY or MXN onto this prepaid travel money card and use it at millions of locations worldwide.

  • Not linked to your bank account for safety.
  • Convert currency with a 5.50% Foreign Exchange Fee
  • Contactless payments
  • Reload, withdraw, or replace your card for free.
    Back to top

    Fees for using travel credit cards

    • Annual fees

    Cards designed for overseas use can also come at a price, so make sure that the annual fee doesn’t outweigh any potential benefits.

    • How to avoid them:

    To get by this, just look for a credit card with zero annual fees or a promotional period that allows you to use the card at no charge.

    • Interest fees

    When you use your credit card, not only will you have to repay the purchase amount, you may also have to pay interest. Be sure to make on time payments or you could roll yourself into a ball of a debt.

    • How to avoid them:

    You could get a travel-friendly 0% interest credit card or you could take advantage of the interest-free days when you pay your balance on time.

    • Merchant fees

    Sometimes you might find that the overseas merchant adds a surcharge to your transaction just because you’re using a foreign credit card.

    Also, if you agree to pay in dollars while overseas, you’re agreeing to the currency conversion rate which incorporates a fee to the merchant, a poor exchange rate and the currency conversion fee which your card company may also charge.

    • How to avoid them:

    Always stay alert at the counter and be vigilant about checking your bill before paying. Ask when in doubt about any item, and always say “no” when offered to pay in your home currency.

    Updated December 10th, 2018
    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
    $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
    $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
    $250
    See Rates & Fees
    50,000 bonus Membership Rewards® Points when you spend $2,000 in the first 3 months Rates & Fees
    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
    $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.
    None
    $0
    14.99%, 18.99% or 24.99% variable
    Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees.
    None
    $495
    16.99% variable
    Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
    None
    $995
    16.99% variable
    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.
    None
    $0
    13.99% variable
    A low, variable APR on purchases, balance transfers and cash advances.
    None
    $0
    16.99% to 24.99% variable
    Earn a signup with a $250 value (25,000 online bonus points) after spending $1,000 within the first 90 days from account opening

    Compare up to 4 providers

    Back to top

    Kyle Morgan

    Kyle Morgan is a producer for finder.com who has worked for the USA Today network and Relix magazine, among other publications. He can be found writing about everything from the latest car loan stats to tips on saving money when traveling overseas. He lives in Asbury Park, where he loves exploring new places and sipping on hoppy beer. Oh, and he doesn't discriminate against buffalo wings — grilled or fried are just fine.

    Was this content helpful to you? No  Yes

    Ask an Expert

    You are about to post a question on finder.com:

    • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
    • finder.com is a financial comparison and information service, not a bank or product provider
    • We cannot provide you with personal advice or recommendations
    • Your answer might already be waiting – check previous questions below to see if yours has already been asked

    Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

    By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

    Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
    Go to site