Foreign Transaction Fee On Credit Cards - How Does it work (2024)

FAQs

Foreign Transaction Fee On Credit Cards - How Does it work? ›

What Is a Foreign Transaction Fee? A foreign transaction fee is a fee charged by a credit card issuer or bank for every transaction made in a country outside of the U.S. Fees vary depending on the credit card or bank's terms and conditions, but usually fall between 1% and 5% of the purchase amount.

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.

The best way to avoid foreign transaction fees is to acquire a no-foreign-transaction-fees credit card, if you qualify for one. Next in line are checking accounts or debit cards with no foreign transaction fee. It is also possible to avoid the fee by paying in the local currency for purchases.

These fees apply whenever you make a purchase with your card from a non-U.S. retailer, so if you buy an item online from a company based in another country, you could be charged the fee.

If you've made an international purchase, credit card issuers may not refund any foreign transaction fees because it costs them money to process the transaction. That means depending on your credit card's policy, you could be stuck with having to pay the fees, so be sure to check with your credit card issuer.

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.

It's possible to get a foreign transaction fee waived, but it isn't easy. Call your credit card issuer's customer service department and request that they waive the fee. It works best if you've had the credit card for many years, but even then, there's no guarantee the issuer will waive the fee.

When you use a credit card in a foreign country, the issuer automatically converts the local currency to dollars based on up-to-date exchange rates. For this conversion service, the issuer may charge a nominal fee, a percentage typically between 1-3% of the total purchase.

Before you depart, check your credit and debit card agreements to see if they include such fees. If they do, then apply for a credit card with no foreign transaction fee, as well as for a debit card that does not charge extra for ATM withdrawals in other countries.

Which major credit cards don t charge foreign transaction fees? ›

You'll need to check your card agreement to determine whether your card charges a foreign transaction fee. Find the agreement provided with your card, if you have it filed somewhere. Alternatively, you can find your card online and check the “Pricing and Terms” or “Rates and Fees” for the card.

You can avoid all transaction fees by paying for your purchases in cash while you're abroad. Banks and currency exchange stores will exchange U.S. dollars for most major currencies, and you can do this before you leave.

While a foreign transaction fee is charged by your credit card issuer, a currency conversion fee can be charged by the credit card payment processor or the individual merchant.

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.

Depending on the credit card you have, and the lender, you may be charged a fee for using your card overseas. If you're given the choice to pay in the local currency, it's typically cheaper to do so.

Depending on the credit card you use when traveling abroad, you could pay fees that total 6% or more of purchases. Using a credit card with no foreign transaction fees and choosing to make purchases in local currency will nearly always save you money.

Many, but not all, credit card issuers charge fees for purchases made overseas with a foreign merchant. These fees typically range from 1% to 3% of each purchase and can result in you paying significantly more than the listed price of anything that you purchase overseas. 1 This can really add up throughout a trip.

It's possible to get a foreign transaction fee waived, but it isn't easy. Call your credit card issuer's customer service department and request that they waive the fee. It works best if you've had the credit card for many years, but even then, there's no guarantee the issuer will waive the fee.