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There’s nothing worse than getting back from a great vacation abroad to find that your credit card bill is higher than you expected. The culprit? Foreign transaction fees. A foreign transaction fee is a charge you can incur on your credit card when you spend outside the U.S. Your credit card issuer determines this amount and it is usually a percentage of each purchase, typically it’s between 1%-3%. That means if you buy a $100 souvenir, you would pay $3 in fees.
The reason for these fees is that in order to process your purchase your credit card issuer has to use an overseas bank and, often, a currency conversion is involved. These things cost the credit card issuer money and they pass that along to you, the customer. The total fee that you pay is most often derived by adding two fees together: The charge from the issuing bank (think Wells Fargo, Bank of America etc.) and the processing fee from the payment networks (think Visa and Mastercard).
What to do about foreign transaction fees?
There’s no reason for foreign transaction fees to ruin your vacation. Before you resign yourself to carrying around more cash than your comfortable with, follow these steps:
- Check to see if your current credit card charges foreign transaction fees. Check out the chart below to give you a guide and then read your card’s terms and conditions to find the specific fee for your credit card. If you can’t locate it, you can call the customer service number that’s usually printed on the back of your card to find out.
- Apply for a no foreign transaction fee credit card. A good travel credit card won’t charge an annual fee. There are a lot of great travel rewards cards available to choose from. Many charge no annual fee and still give you great benefits like rewards points that you can use to help fund your next trip.
Foreign transaction fees chart
Credit card foreign transaction fees |
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| American Express |
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| Bank of America |
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| Barclaycard |
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| Capital One |
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| Chase |
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| Citi |
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| Discover |
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| Wells Fargo |
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