A Guide To Foreign Transaction Fees Bankrate
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Hinterhaus Productions/DigitalVision/Getty Images Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. Hinterhaus Productions/DigitalVision/Getty Images Written by Personal Finance Writer Jacqueline is a contributor for Bankrate and has worked with more than a dozen financial brands, including LendingTree, Credit Karma, Fundera, Chime, MagnifyMoney, Student Loan March 31, 2022 Edited by Senior Editor Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Reviewed by Editor Mariah Ackary is a personal finance editor who joined the Bankrate team in 2019, excited by the opportunity to help people make good financial decisions. Send your questions to March 31, 2022 Share
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PREV NEXT Flights, hotels, food and tours can add up really fast when you're traveling, especially if you're planning an international getaway. One travel expense that is often overlooked is foreign transaction fees. Some credit cards charge but if yours does, you'll run into them whenever you make purchases using your credit card outside of the U.S. These fees can run anywhere from 1 percent to 4 percent of each credit card transaction you make and can pile up quickly if you're not mindful of your international spending. Let's take a closer look at what foreign transaction fees are, how to avoid them and which credit cards can make it easier to make purchases overseas without overspending. What are foreign transaction fees
A foreign transaction fee (FTF) is a surcharge credit card holders pay for transactions processed outside of the U.S. These can be purchases you make while traveling abroad or online from a merchant based overseas. Foreign transaction fees are composed of two charges. One comes from the card issuer-for example, Chase, Bank of America or Citi. The other is from the network: Visa, Mastercard, Discover or American Express. How much do foreign transaction fees cost
Every credit card will have varying terms that dictate how much a foreign transaction fee will cost the cardholder, so it's important to review your credit card's terms and conditions to know exactly how much you'll be paying. You can usually find this information in the "Pricing and Terms" or "Rates and Fees" section. You should see the exact percentages charged for these fees under the "Fees" section. Foreign transaction fees generally range from 1 percent to 4 percent and tend to average around 3 percent of each transaction. Paying around $3 per $100 you spend may not sound that expensive, but these fees can add up if you're making a lot of purchases with your credit card on a foreign getaway. Credit card foreign transaction fee chart
Here's a breakdown of foreign transaction fees for major issuers: Issuer Issuer fee Network fee Total foreign transaction fee American Express 2.7% – 2.7% Bank of America 2% 1% 3% Capital One – – – Chase 2% 1% 3% Citi 2% 1% 3% Discover – – – Wells Fargo 3% 1% 4% You should still use a credit card when you travel
While it's important to keep foreign transaction fees in mind, don't be scared off from using a credit card while traveling internationally. There are a lot of benefits you can gain from using one. You can avoid paying foreign fees if you pick up the right credit card before you travel. Make sure to compare credit cards to see which option might offer the most perks for your needs, including no foreign transaction fees. The and rewards cards let you earn cash-back, airline miles, hotel points or flexible rewards for each dollar you spend. Besides having the potential to earn rewards, using a credit card overseas is a great way to score zero fraud liability coverage. If your credit card is lost or stolen abroad, you won't be on the hook for a single cent of fraudulent purchases. How to avoid foreign transaction fees
No matter what your travel budget is, try to avoid foreign transaction fees for a simple reason: They increase the cost of your purchase without adding any value. Fortunately, you can eliminate or reduce the fees you'll pay with a little planning. Here are a few suggestions to get you started: Exchange your money before leaving
If you decide to go the cash route, exchanging your U.S. dollars for another currency before leaving the U.S. can be more convenient and less costly than doing it abroad and may cost less than foreign transaction fees. When exchanging your money overseas, you could run into challenges, especially if you don't know the country very well. You could experience long wait times, difficulty finding a nearby currency exchange or face exorbitant fees when changing currencies. Open a bank account with no foreign transaction fees
Opening a bank account that doesn't have foreign transaction fees can be useful when you're using your debit card or getting cash from ATMs overseas. When you withdraw cash abroad, you could be charged both international transaction fees and out-of-network ATM fees. Another option would be to use a for international ATM usage, such as Schwab Bank's High Yield Investor Checking Account. The only caveat is that you have to connect your account to a Schwab One brokerage account. As a bonus, Schwab also doesn't charge foreign transaction fees. Get a credit card that doesn t charge foreign transaction fees
Applying for a card that doesn't charge foreign transaction fees before your trip or overseas purchase is an ideal option for avoiding additional fees while traveling. It's worth noting, however, that just because an issuer notes a foreign transaction fee it doesn't mean your specific credit card will charge you one. There are plenty of credit cards that don't have foreign transaction fees, even if their issuers have them. Here are some of the best credit cards with no foreign transaction fees. Best credit cards with no foreign transaction fees
Chase Sapphire Reserve Best for extra travel perks
Rewards rate: 3X points on eligible travel and restaurant purchases (after earning your $300 travel credit); 10X total points on Lyft purchases (through March 2025); 1X points on all other purchases Welcome offer: 60,000 points after spending $4,000 on purchases within the first three months Annual fee: $550 APR: 19.24 percent to 26.24 percent variable The is one of the most popular travel credit cards around. With bonus points upon opening the card, a fee credit for and an annual $300 travel credit, this card offers a lot for travelers. One of the biggest appeals is the portal, where cardholders can redeem points at a higher value for travel-related spending with travel partners. The annual fee is higher than many travel cards but it could be worth it if you travel frequently. Capital One Quicksilver Cash Rewards Credit Card Best for simple cash back
Rewards rate: Unlimited 1.5 percent cash back on all purchases Welcome offer: $200 cash bonus after spending $500 on purchases within the first three months Annual fee: $0 APR: 16.49 percent to 26.49 percent variable The is a great option for both travel and cash back. With it, you can earn 1.5 percent unlimited cash back, even on international purchases. Plus, there are no foreign transaction fees or annual fees. This makes the card inexpensive to own and use. This card also uses the Visa payment network, which means that it's accepted in more than 200 countries and territories. Discover it Cash Back Best for customer service
Rewards rate: 5 percent cash back after activation on rotating categories each quarter (up to $1,500 in purchases, then 1 percent), 1 percent for all other purchases Welcome offer: Automatic Cashback Match for the first year Annual fee: $0 APR: 14.24 percent to 25.24 percent variable With no annual fee, 5 percent cash back on certain spending and no foreign transaction fees, the could save you some money on international travel. Discover Bank is also known for providing excellent customer service, which can help if you run into issues overseas. Discover has expanded its reach significantly in recent years, but it's still not quite as widely accepted as Visa and Mastercard. Do some research ahead of time to make sure you'll be able to . If your credit card is not accepted where you're traveling, the lack of foreign transaction fees won't help you much, and you'll need a back-up card. Capital One Venture Rewards Credit Card Best for flexible travel rewards
Rewards rate: 5X miles on hotels and rental cars booked through Capital One Travel; 2X miles on all other purchases Welcome offer: Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel Annual fee: $95 APR: 17.49 percent to 25.49 percent (variable) The is not necessarily a premium travel card, but the 2X rewards on all purchases are still a deal for international travelers. Paired with a low annual fee and no foreign transaction fees, it has the makings of a solid entry-level card for travelers. The flexibility comes in when you earn and redeem points. You can earn unlimited 2X points on all your spending. Then, you can redeem points by booking travel through the Capital One rewards portal, receiving a statement credit for recent eligible travel purchases (within the last 90 days) or transferring miles to partner airline and hotel programs. American Express Gold Card Best for international dining
Rewards rate: Earn 4X Membership Rewards® Points on restaurants, including takeout and delivery and Uber Eats purchases and at U.S. supermarkets (on up to $25,000 in purchases per year, then 1X points), 3X points on flights booked directly with airlines or on amextravel.com and 2X points on rental cars through amextravel.com, plus 1X points on all other purchases Welcome offer: 60,000 points after spending $4,000 in purchases within the first six months Annual fee: $250 APR (for Pay Over Time): 18.99 percent to 25.99 percent variable The could be the ideal travel card for international foodies. If you like to dine out while you travel abroad, this card gives you a great opportunity to earn 4X points at restaurants worldwide, with no foreign transaction fees. (As of Feb. 22, you can earn 4X for takeout and delivery only in the U.S.) Amex Gold also lets you redeem points with a diverse list of travel partners. In some cases, your points could be or more. Chase Sapphire Preferred is a close runner-up for traveling foodies. This card lets earn 3X Ultimate , with no foreign transaction fees. You can also earn 5X points on travel booked through Chase Ultimate Rewards and transfer points 1:1 with the same diverse list of travel partners as the Chase Sapphire Reserve-but for a more modest $95 annual fee. Be aware that while Amex cards are accepted in more than 100 countries, you may need a back-up card in some places. If you're traveling in Europe and Asia, for example, you'll likely encounter some merchants that don't accept Amex. Both Chase Sapphire Preferred and Chase Sapphire Reserved, on the other hand, are Visa cards. Visa and Mastercard are the most widely accepted credit cards in the world. The bottom line
Foreign transaction fees don't have to be a part of international credit card spending. If you don't plan to travel outside the country, this is not an issue. But if you do, you can save money by using a credit card that's accepted where you're traveling, doesn't charge foreign transaction fees and offers benefits for frequent travelers. Written by Jacqueline DeMarco Personal Finance Writer Jacqueline is a contributor for Bankrate and has worked with more than a dozen financial brands, including , , , , , , , SoFi and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school. You can learn more about her work and connect with her on or at . Sometimes . Edited by Senior Editor Reviewed by Editor up next Part of Credit Cards All frequent flyers should consider both—but if you travel internationally,... Mar. 14, 2022 Credit Cards Here’s everything you need to know about earning the most points possible d... Mar. 21, 2022 Credit Cards Traveling abroad for the first time? Here are some tips to take along for t... Apr. 7, 2022 Credit Cards The best credit cards for international trips let you avoid added fees on i... Sep. 5, 2022 Learn more Eligibility and benefit level varies by card. Terms, conditions and limitat... Nov. 8, 2022