But those purchases won't earn you any rewards, and withdrawing cash abroad may be subject to pesky fees.
Of course, you'll also avoid foreign transaction fees by paying with cash. Related: I fell for dynamic currency conversion - reader mistake story Pay with cash However, they'll usually give you a poor conversion rate, so it's best to pay in euros, pesos or whichever is the local currency.
You should always choose local currency.ĭynamic currency conversion is a sneaky way that banks encourage you to pay in your home currency (U.S. When using a card terminal abroad, you may be prompted to pay in the local currency or in U.S. But keep in mind that some issuers, including Capital One and Discover, don't charge foreign transaction fees at all across their credit cards. Unfortunately, cash-back cards such as the Chase Freedom Unlimited and the Blue Cash Preferred® Card from American Express (see rates and fees) tend to charge foreign transaction fees. Related: Ways to save on overseas ATM withdrawals But in some places, cash is still king and you'll need to have a game plan for avoiding these types of fees - or factoring them into your budget. This is one reason we recommend paying with a credit card wherever possible. Some banks waive this fee, especially if you use an ATM that falls within a specific network of banks.Īdditionally, you might be on the hook for additional fees when you use an ATM abroad, including a flat fee from your bank for using an ATM not affiliated with the bank (which is typically $5), a foreign currency conversion fee (which typically falls in line with foreign transaction fees at 3%) and additional fees charged by the owner of the specific ATM you use. While the two fees can apply when traveling outside the U.S., they are not synonymous.Ī foreign ATM fee is charged when you withdraw cash from an ATM in a foreign country. ATM feesĪnother type of fee you may hear about when you travel is a foreign ATM fee. Check the terms and conditions of your credit card to see whether or not your card (or the card you're considering applying for) charges foreign transaction fees.ĬHASE Foreign transaction fees vs. While most issuers charge foreign transaction fees of around 3% on at least some of their products, Capital One and Discover do not charge foreign transaction fees on any of their credit cards.Ĭard issuers are required to give potential and existing customers access to rates and fees associated with a credit card, including foreign transaction fees. In fact, it's rare for a card that offers travel rewards and perks to charge any foreign transaction fees. Most of the top travel credit cards don't charge foreign transaction fees. Which cards have no foreign transaction fees? Capital One and Discover do not charge foreign transaction fees on any of their credit cards. Visa and Mastercard charge a 1% fee to banks for processing purchases made abroad, and many U.S. Generally, foreign transaction fees hover around 3% for most issuers. And you can find no foreign transaction fees on personal and business cards from all issuers.Īmerican Express foreign transaction fee.ģ% for different currencies 2% for US$ transactions. However, Capital One and Discover are unique in having zero foreign transaction fees on all credit cards. The standard foreign transaction fee tends to be around 3%. On some credit cards, issuers will then pass the conversion cost onto consumers.
When you make a transaction while traveling or through a foreign website, banks may have to convert the purchase into U.S. What Is a foreign transaction fee?įoreign transaction fees are charged on certain cards when you make a purchase that goes through an overseas bank to process the transaction. Today, let's walk through what those fees are and how you can avoid them in the future. You may have noticed that when you use some credit cards abroad ( or on a website not hosted in the U.S.), an additional fee gets tacked on to each purchase. There's very little that we dislike more here at TPG than unnecessary fees - including foreign transaction fees.
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