Everything you need to know about foreign transaction fees and how to avoid them.
If you use your credit card overseas, a foreign transaction fee or currency conversion fee may be tacked on your credit card bill — adding to the cost of paying with plastic when you’re in another country or shopping online internationally. This page explains when these fees are charged, the potential cost and how you can avoid or minimize them.
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When is a foreign transaction fee applied?
Credit card providers may apply a foreign transaction fee for any of the following transactions:
- Overseas transactions
- Transactions made online in a foreign currency
- Transactions made with a retailer outside of the US
Foreign transaction fees are most common for payments when you’re using your card overseas. It’s important to note that any payment that’s processed overseas can attract this fee, even if it’s made in US dollars. If you do swipe your card overseas, always pay in the local currency to avoid being hit with the currency conversion fee.
How much are foreign transaction fees?
In general, foreign transaction fees are 3% to 5% of your total transaction amount in US dollars. However, foreign transaction fees vary depending on your card and your card provider.
How do foreign transaction fees work
Let’s say you’re paying $1,000 for an overseas accommodation and use a card that charges a 3% foreign transaction fee, the additional cost would be $30. Similarly, if you were shopping online and spent $100 with a retailer overseas, you could expect to pay $3 extra. Even though this percentage can seem like a small amount, with large expenses like travel-related costs, these extra fees can add up to a substantial amount over time.How can I avoid foreign transaction fees?
Here are some options that allow you to avoid or minimize foreign transaction fees:
- No foreign transaction fee credit cards. These are credit cards tailored for international use and allow you to spend without any foreign transactions fees. Some of them, like the Barclaycard Arrival Plus World Elite Mastercard, come with complimentary travel perks.
- No foreign transaction fee debit cards. Stay on the lookout for a debit card with low or no foreign transaction fees — some even waive international ATM withdrawal fees. The upside of using a debit card is that there is no interest since you’ll be spending your own money.
- Prepaid travel money cards. Travel money cards offer the convenience of a credit card without the costs of international transaction fees or ATM withdrawal fees.
- Foreign cash. Using cash eliminates bank transaction and ATM fees, but you may still have to pay a fee for the currency exchange. You could also use a money transfer service to send money to your destination and pick it up when you arrive. Be careful with large amounts of money — if you lose it, it’s not replaceable.
- Traveler’s checks. These can help you avoid international transaction fees, but they are slowly being phased out because of other fees and limited acceptance.
Avoiding international transaction fees can result in some savings over time, but may not be the right option for every traveler. You should always consider a range of payment options before traveling overseas or shopping online to make the most out of your money.
Comparison of travel money products

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.
Other costs to consider when using your card internationally
On top of the foreign transaction fee, the following costs could also apply:
- Currency conversion. When spending overseas, you may be given the option to use local currency or USD. You could lose money as a result of the currency conversion before even being charged the currency conversion fee — always pay in the local currency if that’s an option.
- Foreign ATM fees. This is a common fee when using your card to withdraw cash from an ATM internationally. Unless your bank is a member of the Global ATM Alliance that allows you to use other ATMs for free, this fee could be around $5 per transaction.
- Cash advance fees. Another common credit card fee is the cash advance fee, which is typically around 3% to 5% of each transaction. Cash advance fees are not limited to ATM withdrawals — there are other transactions treated as cash advances as well.
- Interest charges. If you don’t repay your balance in full and on time, interest charges will apply. With cash advances, interest charges apply immediately, so try to steer clear if you can.
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