Foreign transaction fees—what are they and how do they work? (2024)

FAQs

Foreign transaction fees—what are they and how do they work? ›

These fees are typically 1%–3% of the value of the transaction and are paid by U.S. travelers in dollars. Online purchases that take place with overseas vendors may also be subject to such a fee. Several banks or credit card issuers now offer certain customers waivers on these fees, or fee-free cards.

A foreign transaction fee is charged by your bank or card issuer when you make a purchase in a foreign currency or through a non-domestic bank. It's usually a percentage of the transaction amount, and is sometimes called an administrative fee.

A foreign transaction (FX) fee is a surcharge on your credit card bill that appears when you make a purchase that either passes through a foreign bank or is in a currency other than the U.S. dollar (USD). This fee is charged by many credit card issuers, typically ranging from 1% to 3% of the transaction.

"Also known as a foreign transaction fee, a markup fee is charged by credit card issuers on transactions made in foreign currencies or with foreign merchant. This fee typically ranges from 1.5% to 3.5% of the transaction amount. A Goods and Services Tax (GST) of 18% is applied to the markup fees.

Best Credit Cards With No Foreign Transaction Fee of August 2024. United Gateway℠ Card: Best feature: United Airlines rewards. Discover it® Cash Back: Best feature: Cash back on everyday purchases. IHG One Rewards Traveler Credit Card: Best feature only: Bonus points at IHG hotels.

Can I use my American Visa credit or debit card abroad? You can use your U.S. Visa card abroad to make purchases or withdraw cash. To withdraw cash from an ATM, you'll need to know your four digit PIN number.

Not all credit cards charge a foreign transaction fee, but many do. To find out if your card does, check the “fees” section of the terms and conditions for your card.

Foreign transaction fees generally range from 1 percent to 3 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.

Discover® Bank

Discover doesn't charge foreign ATM network or foreign transaction fees. But Discover card acceptance can be limited outside of the U.S., Canada, Mexico and some Caribbean nations. With an HSBC Premier Checking account, customers pay no foreign transaction fees. HSBC also has a worldwide network of ATMs.

How can I avoid fees using my card abroad? ›

Pay in the local currency

You could potentially avoid any currency conversion fees (when transactions are processed in GBP), and in some cases, get a better exchange rate. Check with your lender about whether there are fees for using your credit card abroad.

Foreign transaction fees are charges that credit card issuers, banks and other financial institutions impose when you use an electronic payment card to make a purchase in a foreign country or to buy goods and services in another currency. You can incur these fees whether you're using a debit card or a credit card.

Use a travel credit card instead

Instead of looking for ATM machines and withdrawing cash to pay for your purchases, consider using a travel credit card that waives foreign transaction fees. That way, you can skip ATM fees and not need to worry about carrying a lot of cash around with you.

What Is a Foreign Transaction Fee? A foreign transaction fee is a charge assessed by a financial institution to a consumer who uses an electronic payment card to make a purchase in a foreign currency.

Foreign transaction fees generally range from 1 percent to 3 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.

How To Calculate Foreign Transaction Fees. A foreign transaction fee is typically calculated by adding the predetermined fee percentage charged by your credit card issuer to a purchase made with a foreign merchant to the cost of the original purchase.

Choose the Local Currency Option

Always choose the local currency to avoid dynamic currency conversion (DCC) fees, which can be higher than standard forex charges.

Banks rarely refund foreign transaction fees once they have been assessed on legitimate transactions. However, many banks offer credit and debit cards that do not charge foreign transaction fees.