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Foreign Transaction Fees: How To Avoid Them & Save


A foreign transaction fee, or international transaction fee, is a 2-4% surcharge that roughly 90% of credit cards tack onto transactions processed outside of the United States.  In other words, they’re in play both when you’re traveling abroad and when you’re conducting business with internationally based merchants.

This presents a potentially expensive problem for consumers with international exposure, so to speak, especially since credit cards are by far the cheapest means of currency conversion.  The answer, of course, is to make sure you have a no foreign transaction fee credit card in your wallet.  Such cards are becoming increasingly common, and two major issuers – Capital One and Discover – have even removed foreign fees from all of their cards.

In order to provide a more complete picture of the foreign transaction fee landscape, CardHub compared offers from the 10 largest banks and 10 largest credit unions – noting how many no foreign fee cards each has, identifying the best offers of the bunch and more. You can check out our findings in the table below.  For more information about what foreign transaction fees are and how they work, see the Foreign Transaction Fee Factoids section that follows.

 

Issuer Foreign Transaction Fee Number of Cards With No Foreign Fee Best No Foreign Fee Offer International Collect Calls
TOP 11 Issuers
American Express Up to  2.70% 4
American Express-Gold Card
American Express Gold
1-715-343-7977
Bank of America Up to 3.00% 2
BankAmericard Travel Rewards Credit Card
BankAmericard Travel Rewards
1-757-677-4701
Capital One No foreign fees 6
Capital One® VentureOne® Rewards Credit Card
VentureOne Rewards
1-804-934-2001
Chase Up to 3.00% 1
Chase SapphirePreferred® Card
Sapphire Preferred
1-302-594-8200
Citi Bank Up to 3.00% 2
Citi ThankYou® Premier Card
ThankYou Premier
1-605-335-2222
Discover No foreign fees 3
Miles Credit Card
Discover it Miles
1-801-902-3100
HSBC No foreign fees 4
HSBC Platinum MasterCard® with Rewards credit card
Platinum MasterCard with Rewards
1-716-841-7212
PNC 3.00% 0 N/A 1-412-803-7787
USAA 1.00% 0 N/A 1-800-531-8722
U.S. Bank Up to 2.00% 1
U.S. Bank FlexPerks® Travel Rewards American Express® Card
FlexPerks Travel Rewards
1-701-461-0627
Wells Fargo Up to 3.00% 2
Wells Fargo Propel 365 American Express® Card
Propel 365
1-925-825-7600
AVERAGE: 1.50% 2.27 N/A N/A
Top 10 Credit Unions
State Employees Credit Union 1.00% 0 N/A 1-888-732-8562
Boeing Employees Credit Union No foreign fees 1
BECU Visa
BECU Visa
1-909-941-1398
Pentagon Federal Credit Union No foreign fees 7
PenFed Platinum Rewards Visa Signature® Credit Card
PenFed Premium Travel Rewards
1-402-399-3600
SchoolsFirst Federal Credit Union 2.00% 0 N/A 1-714-258-4000
Alliant Credit Union 1.00% 0 N/A 1-773-462-2000
Golden 1 Credit Union 1.00% 0 N/A N/A
Star One Credit Union No foreign fees 3
Star One Visa Signature Rewards Card
Star One Visa Signature Rewards
1-408-543-5202
Security Service Credit Union Up to 1.10% 1
Security Service Power Travel Rewards
Security Service Power Travel Rewards
N/A
San Diego County Credit Union 2.00% 0 N/A 1-858-453-2112
Navy Federal Credit Union Up to 1.00% 2
Navy Federal Credit Union-GO REWARDS
NFCU GO REWARDS
1-703-255-8837
AVERAGE: 0.71% 1.4 N/A N/A

Foreign Transaction Fee Factoids & Forewarning

 
Like much about credit cards, foreign transaction fees can be confusing. With that in mind, we’ve compiled a quick list of tips and background info to help clarify the situation and enable you to avoid making mistakes.

  • A credit card foreign transaction fee is generally the combination of charges assessed by the card network (e.g. MasterCard, VISA) and a fee that your credit card issuer (e.g. Bank of America, Citi) charges on top of that.
  • Foreign transaction fees are at the sole discretion of the issuing bank, while the countries in which a card will be accepted depends on the credit card network (i.e. Visa, MasterCard, Discover, Amex).
  • Remember, you don’t actually need to leave American soil to be charged a foreign transaction fee. Any time you make a purchase online that is processed through an overseas merchant, you will be charged this fee. If the prices on a website are quoted in a foreign currency, that’s a good indication you are transacting with an international merchant.
  • You should also keep an eye out for dynamic currency conversion. This happens when an overseas merchant offers to convert your credit card transaction from the local currency into U.S. dollars. While it may sound tempting to see your transaction in a currency that you are familiar with, you should always refuse this offer. Many merchants will charge exorbitantly high exchange rates, as high as 7%, to do the conversion and pocket the difference as a fee.
  • Always call your credit card company before using your credit card to make purchases abroad so they do not become suspicious and suspend your account due to fraud concerns.

 

Editorial Disclaimer: Editorial content is not provided or commissioned by financial institutions. Opinions expressed here are the author’s alone and have not been approved or otherwise endorsed by any financial institution, including those that are CardHub advertising partners. Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. Please let us know if you have any questions or suggestions.

Ad Disclosure: Offers originating from paying advertisers are noted as “Sponsored” on the offer's details page. Advertising may impact how and where offers appear on this site (including, for example, the order in which they appear). At CardHub we try to list as many offers as possible but we don't make any representation of listing all available offers.

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DISCUSSION
Sep 28, 2015
Photo of Stephanie D.
Sep 28, 2015
I got a Capital One card to use while travelling overseas because it doesn't charge a foreign transaction fee. However, here is something no one tells you: it does charge an interest on balance on your previous month's bill. For example, for my other VISA card, if Aug balance is $1,000, I pay the $1,000 and I'm done. For my Capital One travel card, if Aug balance is $1,000, I pay the $1,000 and think I'm done.... then come September and another statement from Capital One shows up saying I owe them interest accrued on that $1,000 balance from previous month. So here's another bill I must pay due in more
Jul 1, 2015
Photo of Aleksey S.
Jul 1, 2015
Date! It is of great importance to place a date when you are writing an article, especially if the article is about something that may change with time. Is the information in this article still relevant or not? I cannot say now because there is no date.
May 26, 2015
Photo of Derick R.
May 26, 2015
What exchange rate and foreign transaction fee does my VISA card charge? (I live in France)
May 28, 2015
Photo of Card H.
May 28, 2015
VISA’s current exchange rate is 1 Euro per 1.092991 United States Dollar -- one of the best such rates on the consumer market. VISA doesn’t charge a foreign transaction fee, but more than 90% of credit cards do have an international fee of roughly 3% - levied by the card’s issuer. We therefore recommend double checking with your issuer that your card does not have a foreign transaction fee.

You should also look into getting a no foreign transaction fee VISA or MasterCard debit card in order to withdraw cash at the lowest possible cost when traveling abroad.
Mar 16, 2015
Photo of Tulkin K.
Mar 16, 2015
can i buy goods from USA using my visa golden card obtained in korea?
Mar 18, 2015
Photo of Card H.
Mar 18, 2015
Visa cards can be used all around the world, including in USA, no matter where they were issued.
Aug 15, 2014
Photo of Dale S.
Aug 15, 2014
I have a visa card with LL bean can anybody tell me if there is a fee charged in Germany
Sep 9, 2014
Photo of Card H.
Sep 9, 2014
The L.L.Bean credit card charges a 3% foreign transaction fee and is accepted anywhere Visa cards are accepted.
Apr 3, 2013
Photo of Gail L.
Apr 3, 2013
capital one charges a 2.5 % fee!
Apr 9, 2015
Photo of Peter W.
Apr 9, 2015
@Card Hub: Capital One Costco.ca Master Card charges 2.5% for all foreign currency transaction after converting to Canadian dollars.
Apr 3, 2013
Photo of Card H.
Apr 3, 2013
Capital One does not have any active credit cards that charge a foreign transaction fee. Is it possible that your fee came from another source?
Feb 23, 2013
Photo of Sue F.
Feb 23, 2013
We just opened a Bank of America "Travel Rewards" card and it does not charge fees.
Nov 28, 2012
Photo of Jackie H.
Nov 28, 2012
This may be out of date because VISA does charge a fee.
Nov 30, 2012
Photo of Card H.
Nov 30, 2012
VISA does not charge any foreign transaction fees, given that they are determined independently by credit card issuers. In other words, a Capital One VISA card does not charge foreign transaction fees, whereas a Wells Fargo VISA card may charge foreign fees. Hope this clarifies the distinction.
Nov 8, 2012
Photo of Sabah A.
Nov 8, 2012
nice
May 8, 2013
Photo of Gail K.
May 8, 2013
Oops...typo below...it should say 1% fee.
May 8, 2013
Photo of Gail K.
May 8, 2013
FYI...just got back from S. Korea and found out Bank of America's VISA card charged me 10% foreign transaction fee. I called them before I left and they did not mention about the extra fee.
Oct 9, 2012
Photo of Patrick E.
Oct 9, 2012
Thanks very much! Good information. I am tired of paying this fee and have switched to Cap One.
Oct 9, 2012
Photo of Roberto R.
Oct 9, 2012
Useful information! Thank you