Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Many international travelers encounter foreign transaction fees while making purchases or withdrawing cash from an ATM in a foreign country. The easiest way to avoid a foreign transaction fee is to use a debit or credit card that waives foreign transaction fees while traveling abroad. Luckily, there are plenty of credit and debit card options that offer this perk for those crossing borders.
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. Always check a card’s terms before assuming anything—especially when it comes to fees.
Payment processing networks like Visa, Discover, Mastercard and American Express may also charge international fees. Card issuers can opt to exclude this fee from card terms but if not, the network’s fee will be tacked on to any fee charged by the issuer.
Foreign transaction fees typically show up as separate charges on your billing statement.
How Much Are Foreign Transaction Fees?
Foreign transaction fee amounts can vary: Some cards do not charge a fee. Others may charge fees ranging from one to three percent. Any card charging more than about 3% should be viewed with skepticism, as fees this high are rare.
Featured Partner Offer
Wells Fargo Autograph℠ Card
On Wells Fargo's Website
On Wells Fargo's Website
Up to 3X Reward Rate
Earn unlimited 3X points on the things that really add up – like restaurants, travel, gas stations, transit, popular streamingRead More
Welcome Bonus
30,000 bonus points
Annual Fee
$0
Regular APR
20.24%, 25.24%, or 29.99% Variable APR
Card Details
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Limited time offer: Earn 30,000 bonus points when you spend $1,500 in purchases in the first 3 months – that’s a $300 cash redemption value.
- Earn unlimited 3X points on the things that really add up – like restaurants, travel, gas stations, transit, popular streaming services, and phone plans. Plus, earn 1X points on other purchases.
- $0 annual fee.
- 0% intro APR for 12 months from account opening on purchases. 20.24%, 25.24%, or 29.99% variable APR thereafter.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Redeem your rewards points for travel, gift cards, or statement credits. Or shop at millions of online stores and redeem your rewards when you check out with PayPal.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
Limited Time Offer: Earn 30,000 bonus points when you spend $1,500 in purchases in the first 3 months - that's a $300 cash redemption value. You must select "Apply Now" to take advantage of this specific offer.
Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.
How To Calculate Foreign Transaction Fees
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. For example, if you’re making a purchase in another country that is the equivalent of $100 and you pay for it with a card that has a 3% foreign transaction fee, your total cost will be $103. Note that foreign transaction fees are charged in addition to any currency conversion fees charged and are not the same thing.
Types of Transactions Subject to Foreign Transaction Fees
Any purchase made at a store, restaurant or other vendor outside the U.S. may be subject to a foreign transaction fee if your credit card has one. Many establishments frequented by tourists will offer the option of paying in your home currency. Be wary of this option, as the currency conversion rates are almost always worse than the rates you would get if you simply processed the charge in local currency and you will still be charged a foreign transaction fee on top of that.
A good rule of thumb is to have the card charged in the local currency to avoid conversion fees and to choose a card that doesn’t charge foreign transaction fees for all purchases made abroad.
Cash withdrawals from international ATMs are also subject to fees. In addition to ATM transaction fees, conversion fees may also be tacked on by the ATM’s operator. These currency conversion fees are most likely to be encountered if a cardholder withdraws U.S. dollars from an international ATM.
Online purchases on an international shopping website may also incur foreign transaction fees, especially if the payment processor is an international bank or institution. This includes buying airline tickets from an international airline, even if the transaction is made in U.S. dollars.
Popular Credit Cards With No Foreign Transaction Fees
Check out our list of the best travel credit cards for more options.
Featured Partner Offer
Alaska Airlines Visa® credit card
On Bank of America's Website
3.2
Forbes Advisor created additional star ratings so that you can see the best card for specific needs. This card shines for this use, but overall the star ratings may differ when compared to other cards.
On Bank of America's Website
Up to 3X Reward Rate
Earn unlimited 3 miles for every $1 spent on eligible Alaska Airlines purchases, unlimited 2 miles for every $1 spentRead More
Welcome Bonus
60,000 bonus miles
Annual Fee
$95
Regular APR
20.24% - 28.24% Variable APR on purchases and balance transfers
Credit Score
Good, Excellent(700 - 749)
Editorial Review
For West Coast frequent fliers, the Alaska Airlines card is worth a serious look. You'll snag the prized annual Companion Fare when you spend $6,000 in the prior anniversary year, plus a free checked bag, Visa Signature benefits and other perks, which easily offset the annual fee.
Pros & Cons
- Redeem miles for flights with over 20 airline global partners
- Free checked bag on Alaska Airlines
- Annual Companion fare (earned with $6,000 or more in spending the prior anniversary year) can save you hundreds of dollars
- No foreign transaction fees
- Limited flight options on the East Coast and in the Midwest
- Companion ticket is limited to Alaska Airlines flights
Card Details
- LIMITED TIME ONLINE OFFER – 60,000 Bonus Miles!
- Get 60,000 bonus miles plus Alaska’s Famous Companion Fare™ ($99 fare plus taxes and fees from $23) with this offer. To qualify, make $3,000 or more in purchases within the first 90 days of opening your account.
- Get Alaska’s Famous Companion Fare™ ($99 fare plus taxes and fees from $23) each account anniversary after you spend $6,000 or more on purchases within the prior anniversary year. Valid on all Alaska Airlines flights booked on alaskaair.com.
- Earn unlimited 3 miles for every $1 spent on eligible Alaska Airlines purchases. Earn unlimited 2 miles for every $1 spent on eligible gas, EV charging station, cable, streaming services and local transit (including ride share) purchases. And earn unlimited 1 mile per $1 spent on all other purchases. And, your miles don’t expire on active accounts.
- Earn a 10% rewards bonus on all miles earned from card purchases if you have an eligible Bank of America® account.
- Free checked bag and enjoy priority boarding for you and up to 6 guests on the same reservation, when you pay for your flight with your card — Also available for co-applicants and authorized users when they book a reservation too!
- With oneworld® Alliance member airlines and Alaska’s Global Partners, Alaska has expanded their global reach to over 1,000 destinations worldwide bringing more airline partners and more ways to earn and redeem miles.
- Plus, no foreign transaction fees and a low $95 annual fee.
- This online only offer may not be available elsewhere if you leave this page. You can take advantage of this offer when you apply now.
Get 60,000 bonus miles plus Alaska's Famous Companion Fare™ ($99 fare plus taxes and fees from $23) with this offer. To qualify, make $3,000 or more in purchases within the first 90 days of opening your account.
Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.
How To Avoid Foreign Transaction Fees
Several options exist to help you avoid foreign transaction fees when you travel abroad. Many banks offer credit cards without foreign transaction fees and a number of institutions offer checking accounts that do not charge foreign transaction fees for debit card cash withdrawals abroad.
New debit or credit card applications can sometimes take up to a week to be approved and waiting for a new card to be delivered in the mail can take up to two weeks, so you should consider these options well before your next big trip.
Apply for a Credit Card With No Foreign Transaction Fees
Plenty of credit cards offer cardholders the ability to swipe without incurring a foreign transaction fee. These cards present the easiest and safest strategy when making purchases abroad.
Credit cards without foreign transaction fees are useful both abroad and at home while shopping online from an international website. Many cards even offer rewards that can be used for future travel or help defray the cost of everyday purchases.
Perhaps the biggest advantage to using a credit card with no foreign transaction fees during your travels is that, even if credit card information is copied or stolen, it’s relatively easy to report fraud and quickly get back stolen funds from a credit card issuer.
One of the most popular travel rewards cards is the Chase Sapphire Preferred® Card. The Sapphire Preferred doesn’t charge foreign transaction fees and earns 5 points per dollar on travel purchased through Chase Ultimate Rewards®, 3 points per dollar on dining, select streaming services, and online grocery purchases (excluding Walmart, Target and wholesale clubs), 2 points per dollar on all other travel purchases and 1 point per dollar on all other purchases. It has an annual fee of $95. The rewards earned on this card can be redeemed for flights, dining, hotels and more.
Get a Checking Account or Debit Card with No Foreign Transaction Fees
Pairing a debit card without international fees with a similar credit card makes a great combo for a frequent traveler. Even on its own, a debit card that doesn’t charge foreign transaction fees is useful for making everyday purchases and withdrawing money from ATMs. Travelers should always avoid using a credit card to withdraw cash from an ATM due to high cash advance fees.
A popular option for travelers is the High Yield Investor Checking account from Charles Schwab. Schwab debit cardholders have zero foreign transaction fees and receive ATM fee rebates at the end of each month.
Although using a debit card can be convenient, debit cards offer less protection against fraud compared to credit cards. If debit card information is stolen, it can take much longer to receive stolen funds from the issuing bank and some account holders may see their luck run out entirely. For those traveling on a budget or who have limited available capital, this can pose significant dangers while abroad. Always report fraud right away and follow any steps the bank may require to receive funds back as quickly as possible.
Don’t Use International ATMs Without Checking Fees First
Regardless of what type of credit or debit card is in hand, travelers should verify fees before using an international ATM. Fees to consider include the international ATM’s fee, currency conversion fees and the home bank’s fees. These fees can be avoided by choosing a bank account that doesn’t charge fees and reimburses out-of-network ATM fees and by always withdrawing local currency from ATMs. Account holders can also ask their home bank if there are partner branches or in-network ATMs in the destination country or countries.
Travelers who don’t have an account that reimburses fees may want to consider making fewer trips to the ATM and pulling out more cash each time to minimize fees. Of course, carrying around more cash also poses risk.
Exchange Cash Before Leaving The U.S.
One way to avoid ATM or transaction fees is to pay for a trip in cash. Travelers can exchange U.S. dollars for most major currencies at a bank, credit union or currency exchange store before a big trip. This may be a good idea if it’s easy to budget how much will be spent on dining or souvenir purchases. Banks and credit unions typically have the lowest exchange rates or fees compared to exchanging money at an airport upon arrival. We recommend exchanging currencies as far away from an airport as is feasible—rates are generally worse the closer you get to a major transportation hub.
Keep in mind the risk involved with carrying a large amount of cash while traveling. There’s a greater chance of losing the money or having it stolen. Be extremely careful when choosing this option and be sure to have a backup option, such as a backup credit card, so that you don’t find yourself with no way to buy food or transportation tickets. When cards are stolen, fraud protection benefits may limit a cardholder’s responsibility to $0, but when cash is stolen, there’s often no recourse.
Bottom Line
Foreign transaction fees can be avoided safely with the right credit or debit card in your wallet. Apply for a credit card or checking account that offers zero transaction fees and/or ATM rebates well before your trip to make sure there’s sufficient time to receive a credit card or account approval and obtain a new credit or debit card by mail.
If applying for a no-fee card is not an option, consider exchanging enough cash for the trip at a bank or credit union before leaving the U.S. Paying for things in local currency means no transaction fees tacked onto bills. This strategy can be risky, though, so be sure to consider how to best protect yourself and your cash while traveling abroad.
As long as there’s a plan in place well ahead of time, any traveler can avoid foreign transaction fees.
Find The Best No Foreign Transaction Fee Credit Cards Of December 2023
Learn More
Frequently Asked Questions (FAQs)
How can I get a foreign transaction fee waived?
There is no guarantee you will see a foreign transaction fee waived. You can attempt to get it waived by contacting your credit card’s customer service department and requesting they waive the fee, but this won’t guarantee the issuer will waive the fee.
Which banks do not charge foreign transaction fees?
Most major card issuers offer at least one card without foreign transaction fees. Capital One doesn’t charge foreign transaction fees for any of its U.S.-issued credit card products. Most other banks offer at least a handful of credit card products that don’t charge foreign transaction fees.
How do I find out if my credit card charges foreign transaction fees?
Some credit cards include no foreign transaction fees as a part of the cardmember perks and benefits packages. Other credit cards waive foreign transaction fees during the first year as part of a welcome offer.
It is important to know your card’s features. If you do not know, you can look it up online, review your card agreement or contact your respective bank’s customer service department.
When are foreign transaction fees charged?
A credit card foreign transaction fee is charged when you use your credit card while abroad or when you make a purchase online in a foreign currency.
Helping You Make Smart Financial Decisions When You Travel
Get Forbes Advisor’s ratings of the best travel credit cards and helpful information on how to utilize travel rewards and benefits to get the best deals for your next adventure.
Thanks & Welcome to the Forbes Advisor Community!
By providing my email I agree to receive Forbes Advisor promotions, offers and additional Forbes Marketplace services. Please see our Privacy Policy for more information and details on how to opt out.
As an expert in personal finance and international travel, I bring a wealth of knowledge and hands-on experience to shed light on the intricate world of foreign transaction fees. Having navigated the intricacies of credit cards, banking systems, and international travel extensively, I can confidently guide you through the nuances of this critical aspect of financial management.
Now, let's delve into the concepts covered in the article:
Foreign Transaction Fee:
A foreign transaction fee is a charge imposed by credit card issuers or banks for transactions made outside the United States. These fees typically range from 1% to 5% of the purchase amount. Payment processing networks like Visa, Discover, Mastercard, and American Express may also impose international fees, either in addition to or independent of the issuer's fees.
Fee Amounts:
Foreign transaction fee amounts vary, with some cards not charging any fees at all. The article suggests that fees higher than 3% should be viewed skeptically, as such high fees are uncommon.
Calculating Foreign Transaction Fees:
Foreign transaction fees are calculated by adding the predetermined fee percentage charged by the credit card issuer to the purchase made with a foreign merchant. This is an additional cost to the original purchase amount and is separate from any currency conversion fees.
Types of Transactions Subject to Fees:
Any purchase made outside the U.S., including at stores, restaurants, or online from international vendors, may be subject to a foreign transaction fee. Cash withdrawals from international ATMs are also subject to fees, including potential currency conversion fees.
Popular Credit Cards with No Foreign Transaction Fees:
The article mentions specific credit cards, such as the Wells Fargo Autograph℠ Card and the Alaska Airlines Visa® credit card, as examples that do not charge foreign transaction fees. It highlights their features, welcome bonuses, and annual fees.
How to Avoid Foreign Transaction Fees:
The article provides several strategies to avoid foreign transaction fees, such as applying for credit cards without foreign transaction fees, getting a checking account or debit card with no foreign transaction fees, and being cautious about international ATM usage.
Frequently Asked Questions (FAQs):
The FAQs section addresses common queries, including how to get a foreign transaction fee waived, which banks do not charge foreign transaction fees, and when these fees are typically charged.
In summary, understanding foreign transaction fees is crucial for international travelers. By selecting the right credit cards or banking accounts, one can navigate these fees effectively and save on unnecessary costs while enjoying the convenience of electronic transactions abroad.
