credit cards

Beware of currency conversion fees

Credit card underneath a $100 bill and a penny, finance chart
Highlights
  • Currency conversion fees were not addressed by Credit CARD Act.
  • The fee on most cards is 3 percent of every transaction.
  • Purchases, ATM withdrawals and cash advances are affected.

If you do a lot of international traveling, you've probably been stung by an unpleasant surprise lurking at the bottom of your bank statement or credit card bill: a currency conversion fee. While the CARD Act has done plenty to reduce sometimes exorbitant credit card fees, it left currency conversion fees untouched, ensuring travelers will have at least one unpleasant vacation memory.

Currency conversion fees are a result of the way the credit card industry works. Every time you use your card outside the U.S., American Express, MasterCard, Visa or whichever network is handling the transaction charges your bank a percentage of the transaction (usually 1 percent) to convert your dollars to dinars, euros, yen -- the local currency. The bank that issues the credit card also charges a fee (usually 2 percent) for the transaction. You see the total charged on your next bill or statement in the form of a currency conversion fee.

This applies to not only credit card purchases but also ATM transactions and credit card cash advances. There are few ways to get around currency conversion fees, other than keeping them in mind when selecting your next credit card if you're a frequent oversees traveler, or being the type of VIP bank customer who gets perks for having large deposits at a bank. But knowing what the charges are ahead of time can help you plan your transactions in such a way that you minimize the fees you'll end up paying.

Consult this chart to see the fees charged by the largest U.S. credit card issuers.

Currency conversion
American Express
  • ATM withdrawal: N/A
  • Credit card purchase: 2.7% of each transaction after conversion to U.S. dollars
  • Debit card purchase: N/A
  • Credit card cash advance: 2.7% of each transaction after conversion to U.S. dollars
  • Fees charged even if transaction is in U.S. dollars?: Yes
Bank of America
  • ATM withdrawal: $5, plus 1% international transaction fee (If you are a U.S. Trust, Bank of America Private Wealth Management Client, Premier Banking Client, Client Managed or a Bank of America associate, fee is waived.)
  • Credit card purchase: 3% charge on point-of-sale purchases after conversion to U.S. dollars
  • Debit card purchase: 3% charge after conversion to U.S. dollars
  • Credit card cash advance: 3% charge after conversion to U.S. dollars
  • Fees charged even if transaction is in U.S. dollars?: Yes
BB & T
  • ATM withdrawal: 3% plus $5 for each withdrawal
  • Credit card purchase: 3%
  • Debit card purchase: 3%
  • Credit card cash advance: 3%
  • Fees charged even if transaction is in U.S. dollars?: Yes
Capital One
  • ATM withdrawal: None for online accounts, $1.50 for some accounts opened in bank branches
  • Credit card purchase: None
  • Debit card purchase: None
  • Credit card cash advance: None
  • Fees charged even if transaction is in U.S. dollars?: No
Chase
  • ATM withdrawal: $3 withdrawal fee; 3% conversion fee
  • Credit card purchase: 3% charge after conversion to U.S. dollars
  • Debit card purchase: 3% charge after conversion to U.S. dollars
  • Credit card cash advance: 3%
  • Fees charged even if transaction is in U.S. dollars?: No
Citibank
  • ATM withdrawal: 3% charge after conversion to U.S. dollars, plus $1.50 per transaction (excluding Citigold and Private Bank customers)
  • Credit card purchase: 3% charge after conversion to U.S. dollars
  • Debit card purchase: 3% charge after conversion to U.S. dollars
  • Credit card cash advance: 3% charge after conversion to U.S. dollars
  • Fees charged even if transaction is in U.S. dollars?: Yes
Discover
  • ATM withdrawal: N/A
  • Credit card purchase: 2% charge on point-of-sale purchases after conversion to U.S. dollars
  • Debit card purchase: N/A
  • Credit card cash advance: 2% charge after conversion to U.S. dollars
  • Fees charged even if transaction is in U.S. dollars?: No
Fifth Third Bank
  • ATM withdrawal: 3% charge after conversion to U.S. dollars.
  • Credit card purchase: 3% charge after conversion to U.S. dollars
  • Debit card purchase: 3% charge after conversion to U.S. dollars
  • Credit card cash advance: 3% charge after conversion to U.S. dollars
  • Fees charged even if transaction is in U.S. dollars?: Yes
HSBC
  • ATM withdrawal: 3% charge, except for the HSBC Premier Debit MasterCard and World MasterCard, which are 0%
  • Credit card purchase: 3% charge, except for the HSBC Premier Debit MasterCard and World MasterCard, which are 0%
  • Debit card purchase: 3% charge, except for the HSBC Premier Debit MasterCard, which is 0%
  • Credit card cash advance: 3% charge, except for the HSBC Premier Debit MasterCard and World MasterCard, which are 0%
  • Fees charged even if transaction is in U.S. dollars?: No
PNC
  • ATM withdrawal: $3.50 (This fee is waived for PNC free-checking customers with an average minimum balance of $2,000 for the statement period.)
  • Credit card purchase: 3%
  • Debit card purchase: 2.5% on purchases and cash advances
  • Credit card cash advance: 4% with a minimum of $10 plU.S. normal cash-advance fees
  • Fees charged even if transaction is in U.S. dollars?: Yes
RBS Citizens
  • ATM withdrawal: 3%
  • Credit card purchase: 3%
  • Debit card purchase: 3%
  • Credit card cash advance: 3%
  • Fees charged even if transaction is in U.S. dollars?: Yes
Regions
  • ATM withdrawal: 3%
  • Credit card purchase: 3%
  • Debit card purchase: 3%
  • Credit card cash advance: 3%
  • Fees charged even if transaction is in U.S. dollars?: Yes
Suntrust
  • ATM withdrawal: 3% plus $5 for each withdrawal for some accounts
  • Credit card purchase: 3% of the purchase amount for Preferred and Platinum cards; 1% for Signature card
  • Debit card purchase: 3%
  • Credit card cash advance: the greater of $10 or 4%
  • Fees charged even if transaction is in U.S. dollars?: No
TD Bank
  • ATM withdrawal: None
  • Credit card purchase: 3%
  • Debit card purchase: None
  • Credit card cash advance: 3%
  • Fees charged even if transaction is in U.S. dollars?: No
USAA Credit Union
  • ATM withdrawal: 1%
  • Credit card purchase: 1%
  • Debit card purchase: 1%
  • Credit card cash advance: 3%
  • Fees charged even if transaction is in U.S. dollars?: Yes
U.S. Bancorp
  • ATM withdrawal: $2 per withdrawal
  • Credit card purchase: 2% charge on point-of-sale purchases after conversion to U.S. dollars
  • Debit card purchase: 2% charge on point-of-sale purchases after conversion to U.S. dollars
  • Credit card cash advance: 3% charge after conversion to U.S. dollars (If no currency conversion takes place, fee is reduced to 2%. Cash advance fee is 4%.)
  • Fees charged even if transaction is in U.S. dollars?: Yes
Wells Fargo
  • ATM withdrawal: $5 per withdrawal
  • Credit card purchase: 3% of the transaction amount for credit card purchases
  • Debit card purchase: 3% of the transaction amount for debit card purchases
  • Credit card cash advance: The larger of 4% or $10 of the cash advance amount if taken via an ATM; the larger of 4% or $20 of the cash advance amount if the customer goes into a financial institution
  • Fees charged even if transaction is in U.S. dollars?: No
First National Bank of Omaha
  • ATM withdrawal: 2%
  • Credit card purchase: 3%
  • Debit card purchase: 2%
  • Credit card cash advance: 3%
  • Fees charged even if transaction is in U.S. dollars?: Yes
Navy FCU
  • ATM withdrawal: No additional fees
  • Credit card purchase: 1%
  • Debit card purchase: 1%
  • Credit card cash advance: No additional fees
  • Fees charged even if transaction is in U.S. dollars?: Yes, but debit transactions conducted overseas in dollars have a reduced fee of 0.8%

 

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