American credit cards—Visa and MasterCard in particular—are increasingly accepted all over the world. Although these credit cards can be a convenient way to pay while traveling aboard, be prepared to pay foreign currency transaction fees of up to a four percent for every dollar you spend overseas.
AVOID FOREIGN CURRENCY EXCHANGE FEES
Although credit cards may provide a better currency exchange rate than a money-changing shop in a tourist neighborhood, your U.S. credit card may also change a foreign currency transaction fee. These foreign transaction fees, often as much as four percent, can add up quickly.
All American Visa and MasterCard credit cards assess cardholders a one percent foreign currency exchange fee for any transaction outside the U.S. But your issuing bank may charge a fee on top of that one percent.
For example, Bank of America, Chase, and Citi all charge three percent for foreign currency transactions (for a total fee of four percent). At the time of writing this article, a meal that costs 100 Euro will cost you about $132 plus a $5.28 foreign currency transaction fee.
BEST CREDIT CARDS FOR FOREIGN TRAVEL
Some credit cards are better for using abroad than others. Check out these best credit cards for international travel. These cards don’t charge a foreign currency transaction fee, and many come with other perks appealing to frequent world travellers.
In general, American Express cards are slightly better than average with a two percent fee. Unfortunately, they may not be as widely accepted overseas as Visa or MasterCard. Discover credit cards do not charge a fee but are virtually unheard of outside of the United States.
A good strategy? Carry an Amex card and us it wherever you can, and use cash or a Visa or MasterCard debit card when you can’t, or pick one of these cards that do not charge the extra foreign currency transaction fee.
Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.
Earn and save more with our free course:
What would you do with more money in your bank account? Join over 15,537 other young professionals receiving our best money hacks to get out of debt by 30, increase your income (starting this year) and invest for financial freedom.
100% free! I will NOT spam you and I will NOT share your email.