Although using a credit card in a foreign country can streamline your wallet, shopping with a credit card in a foreign currency has a downside: Many American credit card companies charge foreign transaction fees — often up to 3% of the purchase amount — when you use their cards to make purchases while traveling abroad or when shopping online in a foreign currency.
Introduction to foreign transaction fees
Foreign transaction fees are often charged to credit card users when making purchases abroad or when shopping online with international merchants. These fees typically range from 1% to 3% of the transaction amount. However, not all credit cards impose these fees — you can avoid them with the best no foreign transaction fee credit cards. Additionally, some issuers may waive them depending on their partnerships with local banks.
While foreign transaction fees often cover the cost of processing international purchases, including currency conversion, it's important to distinguish them from currency conversion fees, which are charged by the card network (e.g., Visa, Mastercard) for converting foreign currency into your home currency.
How foreign transaction fees are calculated
Foreign transaction fees are calculated in two main ways: percentage of the transaction and combined fees.
Percentage of the transaction
The amount charged to a cardholder is a percentage of the amount initially paid, usually around 1% to 3%. Consumers will see the additional charge on their statement.
Combined fees
The foreign transaction fee can be a combination of two parties adding fees to your foreign transaction: the credit card network and the issuing bank. The credit card network charges a conversion fee, usually 1%, and your credit card issuer adds an additional 1-2% fee.
Cardholders won't see the parts that add up to the 3%. They will see an additional 3% fee on their credit card statement.
Beware of using your credit card for cash advances in a foreign currency, which can incur even more fees.
No-foreign-transaction-fee credit cards
Some credit cards do not charge foreign transaction fees while offering valuable rewards for travel. Here are some options for credit cards with no foreign transaction fees:
Discover it® Cash Back
$0
0% intro APR for 15 months on purchases and balance transfers
18.24% - 27.24% Variable APR
Earn Unlimited Cashback Match®
Good to Excellent
Pros
Cons
The Discover it® Cash Back is one of the best credit cards that offers 5% back on popular rotating categories each quarter up to a spending limit when activated. Your rewards are matched by Discover after the first 12 months, and the card has no annual fee.
Discover it® Cash Back- Intro Offer: Unlimited Cashback Match for all new cardmembers–only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% Cashback Bonus® at Grocery Stores and Wholesale Clubs, April 1 through June 30, 2025, on up to $1,500 in purchases, when you activate. Plus, earn unlimited 1% cash back on all other purchases.
- Redeem your rewards for cash at any time.
- Apply and you could get a decision in as little as 60 seconds. No annual fee.
- Start shopping and earning rewards in minutes with your digital card, before your physical card arrives in the mail, if eligible.
- Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. Activate by mobile app for free.
- Get a 0% intro APR for 15 months on purchases. Then 18.24% to 27.24% Standard Variable Purchase APR applies, based on credit worthiness.
- Terms and conditions apply.
Chase Sapphire Preferred® Card
$95
N/A
19.99% - 28.24% Variable
Earn 60,000 bonus points
Good to Excellent
Pros
Cons
If you're new to travel rewards credit cards or just don't want to pay hundreds in annual fees, the Chase Sapphire Preferred® Card is a smart choice. It earns bonus points on a wide variety of travel and dining purchases and offers strong travel and purchase coverage, including primary car rental insurance.
Chase Sapphire Preferred- Earn 60,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
- Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.
- Earn up to $50 in statement credits each account anniversary year for hotel stays through Chase Travel℠
- 10% anniversary points boost - each account anniversary you'll earn bonus points equal to 10% of your total purchases made the previous year.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Complimentary DashPass which unlocks $0 delivery fees & lower service fees for a min. of one year when you activate by 12/31/27. Plus, a $10 promo each month on non-restaurant orders.
- Member FDIC
Capital One Venture Rewards Credit CardNo-foreign-transaction-fee debit cards
If you're planning to use your debit card while traveling abroad, it's important to choose a card that doesn't charge foreign transaction fees. Below are some debit cards with no foreign transaction fees:
Capital One 360 Checking
Schwab Bank High Yield Investor Checking® Account
no monthly service fee
0.05%
$0
Pros
Cons
Charles Schwab Bank is one of the best banks for international travelers, because it doesn't charge foreign transaction fees. It also refunds all fees charged by ATMs worldwide. But if you want to earn high interest rates, you're better off looking elsewhere.
Schwab Bank High Yield Investor Checking® Account- 24/7 live online chat
- When you open a checking account, you automatically open a Charles Schwab brokerage account, too
- No ATM network, but unlimited ATM fee reimbursements
- Interest compounded daily, paid monthly
- FDIC insured
Impact of foreign transaction fees
It's easy to overlook foreign transaction fees on one-off purchases, like the additional 45 cents on a $15 power converter you bought. However, these additional charges can add up over time and throw your travel budget off course, especially when traveling for an extended period. The same goes for anybody who regularly purchases from international businesses.
Experts recommend budgeting for an additional 5% of your expected expenses to incorporate foreign transaction fees into your travel costs.
How to avoid foreign transaction fees
There are a few easy ways to avoid foreign transaction fees:
Using no foreign transaction fee cards
Several credit cards don't charge foreign transaction fees, including many of the best travel credit cards, although many of these cards require a good credit score or higher to qualify.
However, some credit cards without foreign transaction fees aren't widely accepted. For example, The Platinum Card® from American Express doesn't charge a foreign transaction fee for international purchases. But Amex cards have high interchange fees, so not as many businesses accept it compared to other cards. So even if your Amex Platinum card doesn't charge extra for those international purchases, you'll find limited uses for it when you're traveling.
Currency conversion choices
If you don't have a card that doesn't charge a foreign transaction fee and don't plan on applying for one, your best bet is to use cash in the local currency. It's always best to exchange currency before you leave for your trip for two reasons: Your bank won't charge ATM fees, and you may receive better exchange rates. Acquiring cash before departure also allows you to avoid ATM fees and dynamic currency exchanges, which can come with their own associated fees.
Even if you plan on using your credit card to get around a foreign country, keeping some cash on you for cash-only businesses is a good idea.
Choosing the right payment methods abroad
The right travel payment method often depends on where you're going. While credit cards are widely accepted internationally, cash is still king in some areas. You'll want to research and plan accordingly before leaving the country.
There are additional payment methods other than cash and credit cards. Certain debit cards can be used internationally and offer similar conveniences to credit cards. However debit cards don't offer the same protections as credit cards because it's much harder to reclaim any money if stolen.
Traveler's checks and prepaid Visa cards are two other options. Both are worth a fixed amount of money and have security features to save your money if they're lost or stolen.
FAQs
Are foreign transaction fees applied only to purchases made while traveling?
No, foreign transaction fees apply to any transaction made in a foreign currency or processed by a foreign bank, including online purchases from international merchants, not just those made while traveling.
How can I find out if my credit card charges foreign transaction fees?
You can find out if your credit card charges foreign transaction fees by reviewing the card's terms and conditions, checking the fees section of your credit card agreement, or contacting your card issuer directly for information.
Do debit cards also have foreign transaction fees?
Yes, many debit cards charge foreign transaction fees for international transactions and ATM withdrawals. You can ask your bank for its specific fee structure. The fee structure is similar to that of credit cards, and it's advisable to check with your bank for the specific fees applicable to your debit card.
Does SoFi have foreign transaction fees?
No, SoFi does not charge foreign transaction fees for purchases or ATM withdrawals made abroad with your debit card. However, Mastercard applies a 0.2% foreign exchange fee for currency conversion, which is included directly in your transaction. SoFi does not reimburse this fee.
Does the Capital One debt card have foreign transaction fees?
No, Capital One does not charge foreign transaction fees on its U.S.-issued credit or debit cards.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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