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What is a foreign transaction fee?

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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.

Compare no foreign transaction fee credit cards

Updated December 15th, 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
$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.
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
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 25,000 online bonus points after spending $1,000 within the first 90 days from account opening.

Compare up to 4 providers

When is a foreign transaction fee applied?

couple_travel_shopping_ShutterstockCredit 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

Updated December 15th, 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
$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.
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
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 25,000 online bonus points after spending $1,000 within the first 90 days from account opening.

Compare up to 4 providers

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    Other costs to consider when using your card internationally

    couple_outdoor_with_iPad_ShuttesrstockOn 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.

    Pictures: Shutterstock

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    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.

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