Credit card foreign currency transaction fees can take a big bite out of your vacation budget. They aren't fun to pay and they are avoidable. Save your travel funds by knowing the ins and outs of your credit card and switching to a card that will give you the best deal.

When you take your credit card on an international trip—or simply use it to buy something from an online merchant based overseas—you could pay a foreign transaction fee of 3 percent or more. If you take a vacation and spend $5,000 abroad with a card that has a 3 percent fee, you’ll pay $150 in foreign transaction fees.

What is a foreign transaction fee?

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 transaction fee, also known as a FX fee. Foreign transaction fees are different than the exchange rate.

These foreign transaction fees, often as much as 3 or 4 percent of the purchase in U.S. dollars, can add up quickly.

The thing to watch out for is that every card is different. Even two credit cards from the same bank may charge different foreign transaction fees.

Even two Chase credit cards, for example. The Chase Sapphire Preferred® Card has no foreign currency transaction fees and is an excellent choice for international travel. But a different card that you use all the time in the United States might not want to take it on your next international vacation because it charges you for foreign transactions.

With that fee, as of September 2019, a €100 restaurant tab in Barcelona will cost you about $111.50 plus a foreign currency transaction fee of at least $3.45.

How to avoid paying a foreign transaction fee

To avoid paying forieng transaction fees, you have a couple of options: Use cash or bring a credit card that does not charge foreign transaction fees.

Although you can typically get a good exchange rate by using your debit card at foreign ATMs, it’s never safe to carry a lot of cash while you travel. And you definitely want to avoid using touristy money-changing shops whenever possible.

Fortunately, there are many good travel rewards cards don’t charge a foreign transaction fee, making them the best choices for international travel. Many come with other perks that will be appealing for your international trip—such as global concierge lines or rewards programs that can help you reach your next trip faster.

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About the author

Total Articles: 353
David Weliver is the founder of Money Under 30. He's a cited authority on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.

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Masand Legal Solutions says:

Great Information Very nice article!

Clu says:

I use Capital one and American express while travel in China on the same day. I am surprised to find out Capital One, although claiming no foreign transaction fee, uses a much worse exchange rate than AMX. It is %5-10% worse. Now I understand why it offers no foreign transaction fee. It is a trap!! The %1 rebate does not even worth it!!

Irena says:


Irena says:

Capital One cards don’t charge any fees. It’s the only credit card that doesn’t now. Fort checking, Charles Schwab gass no fees. I travel all the time and this works for me.

Sick_of_US_deregulation says:

Chase just charged a “Foreign Transaction Fee” of $25 on a $850 transaction. 2.94%
Got items from a UK website.

Bet you I didn’t get the transaction at the current exchange rate either – There is always a 1-2% margin built into a currency buy/sell price.

Ready to move all my business to my credit union. Screw the big banks.

WTF says:

So what if I am on a website outside US borders and the transaction is in USD. I can understand if the transaction is in British Pounds or Euros, but why should I have to pay a foreign conversion fee if the transaction is made in USD regardless of the site location?

Brittney says:

This is because when the monies are transferred from your bank to the bank of the retailer it has to be converted before being deposited. Therefore the foreign exchange rate has to be covered.

ixus says:

I just purchased something from UK using Capital One, and I can say that their exchange rate is fair enough. The GBP USD rate on that day is between 1.375-1.385. I got charged with rate ~1.386. That’s better than I expected.

Mister Ed says:

Growing Greed Among Credit Card Companies:
In 2008, Bank of America and other banks started charging their credit card customers fees for making certain internet purchases. For example, a 3% foreign currency fee is charged if the transaction is processed through a foreign bank, even if the transaction involves only US dollars. This is just plain greedy. But that’s not all. On the customer’s statement, the retailer’s name is printed next to the fee, as if the retailer (or “merchant”) charged the fee, not the bank. This makes it look like the retailer is charging the customer twice – once for the correct amount, and again for the bank fee, which is not identified as such. Consequently, our customers have been phoning us to complain. All we can do is tell them that Bank of America is responsible for this scam, not us. According to one article I found on the internet, the Bank of America’s practices are illegal. (The Truth in Lending Act – Regulation E and Regulation Z – and the Truth in Savings Act require banks and financial institutions to disclose when such fees are passed on to debit card and credit cardholders.)

Gloria says:

I live in a foreign country on US Currency, British Virgin Islands. It is the only currency we have. For 8 years, I’ve charged food, gas, electric, phone, etc. on my Citibank card. They have now begun charging me 3%, even though the transactions are all in US Dollars to start with. They tried to tell me it was ALL visa and mastercard, but that is not true. So far, I have not found another credit card charging this 3%. Maybe because Citigroup is the only one (so far) who has gone up to Washington asking for a handout of taxpayer dollars! However, if I wanted to transfer a $20,000 credit card balance to them, the rate would be 0%. They are INTENTIONALLY going after the bad credit, and punishing people like me, who pay my bill in full each month. They should never have been allowed to make their business on finance charges on bad creditors. They were supposed to be happy with the 2.5% from vendors!! How did we get in such a mess? CONGRESS!

Elman says:

Capital One Canada charges a 2.5% foreign exchange conversion fee
I just applied online for one and I decided to read the disclosure agreement before I submitted my application and I saw 2.5% foreign exchange conversion fee for foreign transactions. Maybe US capital one is the only one that dont charge foreign exchange conversion fee

You definitely raise a good point about the conversion rate—I’m not surprised Capital One charges a higher one if they waive the fee. The tricky thing is you never know conversion will be used anytime you use your credit card—or debit card—overseas.

I’ll bet there are a lot of cards out there that charge a full 4% fee and have a crumby conversion rate. All the more reason to really pay attention to the credit card fees you pay.

Dylan Hrncir says:

I’ve seen praise for Capital One a few times, and as a military person living overseas, I obtained a card and gave it a shot. To my surprise I found that the exchange rate that I was paying is about 1% higher than the current exchange rate given by the WSJ.

When I dug really deep into the terms and agreements for Capital One, I found this: “For international transactions, MasterCard’s currency conversion procedure includes use of either a government mandated exchange rate, or a wholesale exchange rate selected by MasterCard for the processing cycle in which the transaction is processed, increased by an adjustment factor established from time to time by MasterCard. The currency conversion rate used by MasterCard on the processing date may differ from the rate that would have been used on the purchase date or cardholder statement posting date.”

I’m guessing that the “adjustment factor” is about one percent. It’s defiantly a worse rate that other cards that I have that carry a 1% transaction fee.