How to Avoid Credit Card Foreign Transaction Fees

Whenever I journey overseas, I carry at the least one bank card that doesn’t cost international transaction charges (FTFs) — the surcharges issuers typically impose to cowl the extra price of processing worldwide purchases.

I haven’t saved a exact tally of how a lot I’ve saved by utilizing bank cards that waive international transaction charges, but it surely’s undoubtedly a three-digit quantity.

Using bank cards with out international transaction charges helped me get monetary savings on worldwide journey for a few years. But touring overseas isn’t the one scenario the place FTF-free playing cards show helpful. Find out the place else you’ll be able to anticipate to come across international transaction charges and how one can cut back or get rid of them totally.

What Is a Foreign Transaction Fee?

A international transaction payment (or worldwide transaction payment) is a payment tacked onto a credit score or debit card transaction processed outdoors the United States.

On bank cards, the everyday international transaction payment is as much as 2% or 3% of the entire transaction quantity, relying on the issuer and the forex during which the transaction is denominated.

On debit card transactions, the usual payment is 1%. That doesn’t embrace doubtlessly hefty withdrawal charges charged by international ATMs, although.

If you select to denominate a international credit score or debit card transaction in U.S. {dollars}, slightly than native forex, it leads to dynamic forex conversion charges. Those could be even increased than common international transaction charges — north of 5% of the transaction worth in some instances.

Your credit score or debit card’s charges and costs disclosure ought to clearly spell out the international transaction surcharge, if any. It won’t break down the forex conversion payment, nevertheless. Ask your financial institution when you’re undecided whether or not it prices that kind of payment. Here’s an instance disclosure:

Source: Bank of America

Tips to Reduce, Avoid, or Waive Foreign Transaction Fees

Follow these tricks to discover credit score and debit playing cards with out international transaction charges and to cut back, keep away from, or waive FTFs and forex change charges if you do have to make use of a card that prices them.

1. Look for Cards Marketed to Frequent Travelers — Even If You’re Not One

The greatest approach to keep away from international transaction charges totally is to make use of bank cards that don’t cost them.

Many bank cards becoming this description are journey rewards playing cards. These are playing cards marketed to frequent vacationers, just like the Chase Sapphire Preferred® Card and the Capital One Venture® Rewards card.

But you don’t must be a frequent traveler to qualify for a journey rewards bank card. Many reward spending on different kinds of purchases, like Sapphire Reserve’s 3x eating rewards. Others earn good returns on normal spending. For instance, the Venture card earns 2x miles on most purchases.

Plus, journey rewards playing cards are usually extra beneficiant than normal cash-back bank cards. They promise free or discounted airport lounge entry, assertion credit in opposition to journey and different purchases, alternatives to earn bonus rewards on companion purchases, and extra. If you’ll be able to earn rewards or use advantages value greater than the annual payment, a journey rewards card might be a very good addition to your pockets.

2. Always Denominate Transactions in Local Currency

This ought to be the default possibility wherever you go. Often, you received’t even have the choice to denominate abroad transactions in something however the native forex.

If you’re given the selection to denominate a transaction in U.S. {dollars}, don’t take it. Doing so will expose you to dynamic forex conversion charges, which might high 5%.

That’s considerably greater than the everyday international transaction payment, which you’ll additionally pay in case your card prices one. The temptation to see upfront what you’re paying in a well-recognized forex merely isn’t value the additional price.

Instead, wait a number of enterprise days, then test your on-line bank card assertion (if you are able to do so securely whereas overseas). Your assertion ought to present the transaction worth in U.S. {dollars}.

3. Switch Banks or Open a Secondary Account That Doesn’t Charge Foreign Transaction Fees

If you’re in any other case pleased together with your financial institution however don’t wish to be on the hook for international transaction charges, is switching establishments actually referred to as for?

Maybe not a wholesale swap the place you withdraw each final penny and shut your accounts. But opening a secondary account with a monetary establishment that doesn’t cost international transaction charges could be definitely worth the effort.

Among greater banks, Capital One and Charles Schwab stand out for waiving international transaction charges on debit card transactions.

Credit unions are inclined to cost decrease charges normally, though many have membership necessities that shut out many would-be candidates.

For instance, Pentagon Federal Credit Union (PenFed) waives international transaction charges totally, however it’s good to have some connection to the navy or military-adjacent civilian service to hitch.

4. Withdraw Cash at an International ATM in Your Bank’s Network

Cash stays king in lots of elements of the world. And not simply low- and middle-income nations both. Japan has been surprisingly gradual to adapt digital cost strategies, for instance. Cash remains to be fairly in style there.

Accustomed to card-happy locations just like the European Union, my spouse and I have been a little bit alarmed by what we discovered on our first journey to Thailand: few unbiased retailers appeared to simply accept plastic. Fortunately, our resort accepted Visa and Mastercard.

Finding an ATM wasn’t troublesome, as you’ll anticipate in a cash-rich nation. But getting that money proved pricey. Because we hadn’t notified our major financial institution we’d be touring, our ATM card didn’t work. That compelled us to make use of considered one of our bank cards’ money advance traces. With money advance and forex change charges, the price got here to properly over 5% of the withdrawal.

Had we deliberate forward, we most likely may have prevented that expense. Most banks and credit score unions belong to worldwide ATM networks. If not totally fee-free, ATMs in these networks are nonetheless less expensive for U.S.-based vacationers to make use of.

For instance, Bank of America belongs to the Global ATM Alliance, an unlimited community of low-fee ATMs in Europe, Oceania, and elements of Asia. Currency conversion charges should still apply at Global ATM Alliance machines, however hefty worldwide out-of-network transaction charges ($5 for Bank of America prospects) don’t.

5. Withdraw Cash in Person at a Partner Bank

If you’re not involved a few doable language barrier, skip the ATM and withdraw funds immediately from a department teller.

This eliminates any unavoidable ATM charges from the equation. It has the added benefit of a face-to-face transaction the place you’ll be able to ask questions on any charges and surcharges, assuming you and the teller converse the identical language. (Even in nations the place English isn’t the primary language, tellers at main banks in large cities typically have working English data.)

Before leaving house, test your financial institution’s web site for a listing of companion establishments in your vacation spot nation and go to one promptly if you arrive. Some companion establishments might need branches in your arrival airport — a welcome comfort after an extended journey.

6. Avoid Airport Currency Exchange Kiosks & Independent Currency Exchange Shops

Avoid airport forex change kiosks just like the plague, except you wish to pay 5% to eight% of your transaction in forex change charges. Use in-network ATMs or companion financial institution branches, if out there.

Likewise, after leaving the airport, keep away from unbiased outlets that change forex. Their markups are additionally tremendous excessive, and so long as you’re in a decent-sized metropolis, you’ll most likely discover a lower-cost ATM or financial institution department close by.

Finally, when you plan to enterprise to extra distant elements of your vacation spot nation and don’t anticipate to have the ability to use plastic, load up on money earlier than leaving town.

7. Use Your Travel Card When Shopping With International Merchants

Closer to house, use your journey bank card or different FTF-free card everytime you store with retailers that course of transactions outdoors the United States.

That’s any service provider based mostly outdoors the U.S., together with sellers on U.S.-based retail web sites like Amazon or Etsy, and any service provider that ships its merchandise from a non-U.S. success location.

Do this even when your bank card rewards program doesn’t favor on-line purchases. The solely exception is if you’ll forfeit rewards value greater than the international transaction payment. For instance, when you stand to earn rewards value 4% of the transaction worth, you’ll nonetheless internet 1% after a 3% international transaction payment.

8. Ask for a Foreign Transaction Fee Waiver for Purchases Processed Overseas

As a final resort, ask your card issuer to refund international transaction charges charged on purchases processed abroad.

Issuers assess FTFs on purchases made within the U.S. however processed overseas. It’s not frequent data, so most issuers are prepared to chop cardholders some slack, at the least the primary time round. Especially with the potential for a detrimental evaluate hanging within the air.

This tactic is much less more likely to work for in-person transactions carried out abroad. There, ignorance isn’t a protection as a result of retailers know vacationers anticipate FTFs.

Foreign Transaction Fee FAQs

The idea of a international transaction payment is straightforward, however the particulars can get messy. Learn extra about how they work and how one can beat them.

How Can You Find Credit Cards Without Foreign Transaction Fees?

Finding bank cards with out international transaction charges is simpler than it was once on account of rising shopper consciousness of the problem and fierce competitors between journey rewards bank card issuers.

Credit card issuers know international transaction charges are unpopular, so they have a tendency to promote playing cards with out them. Some, like Capital One, don’t cost international transaction charges on any of their playing cards, eliminating any surprises from the equation.

Not certain the place to begin? Check our listing of the most effective bank cards with out international transaction charges.

When Are Foreign Transaction Fees Charged?

If you’ve ever made a purchase order with a world vendor that processed the transaction outdoors the U.S., there’s a very good likelihood you paid a international transaction payment.

Such transactions embrace apparent ones like shopping for one thing in particular person out of the country. But there are many much less apparent examples, like reserving a room on a resort web site hosted in Mexico or shopping for a hard-to-find guide from an Amazon retailer based mostly within the United Kingdom.

Some further examples of when international transaction charges are (and aren’t) charged:

Action Will You Pay an FTF?
Booking a world flight on a U.S.-based reserving website (like Priceline) No
Booking a world resort on a U.S.-based reserving website No
Booking a world flight immediately with a non-U.S. airline Probably
Booking a world resort immediately with the property Probably
Buying a hand-crafted merchandise from a non-U.S. Etsy vendor Yes, if the transaction is processed outdoors the U.S.
Buying one thing in a retailer outdoors the U.S. Yes
Buying one thing from a non-U.S. vendor on Amazon No, except you purchase by a international Amazon subsidiary
Withdrawing money from an ATM overseas Yes

How Are Foreign Transaction Fees Calculated?

Banks calculate international transaction charges based mostly on the entire quantity of the acquisition. This quantity consists of gross sales tax or value-added tax (VAT), if relevant. 

To calculate the international transaction payment for a specific transaction, convert the FTF share right into a decimal. Then, multiply that decimal by the complete transaction quantity. If you wish to discover out the grand whole, together with the FTF, add the end result to the transaction quantity.

This is less complicated when the transaction is denominated in U.S. {dollars}, assuming a international forex transaction payment doesn’t apply. 

Let’s say you’re utilizing a card with a 3% FTF to purchase a $100 piece of wall artwork from an Etsy vendor based mostly in Portugal. The transaction is processed in Europe, so the FTF applies. This is your calculation:

  • Step 1: 100 x 0.03 = 3
  • Step 2: 3 + 100 = 103

Your whole transaction price with the FTF is $103.

For transactions denominated in international forex, the transaction’s greenback worth fluctuates based mostly on the change fee. You can use the identical calculation to calculate the FTF in international forex, however you received’t know the precise quantity debited out of your checking account or added to your bank card steadiness immediately.

Can You Get a Foreign Transaction Fee Waived?

The greatest approach to keep away from international transaction charges is to make use of a card that doesn’t cost them within the first place.

If that ship has sailed and also you wish to get an FTF waived after a transaction goes by, contact your financial institution or card issuer’s customer support division and ask. Your request could be denied the primary (or third) time you ask, however be persistent and escalate to a supervisor till you get to “yes.” 

Ultimately, your financial institution desires to maintain you as a buyer. They’d slightly eat the occasional international transaction payment than have you ever shut your account and take your small business elsewhere. 

Do Bank of America Credit Cards Have Foreign Transaction Fees?

Some do and a few don’t. 

The in style Bank of America Customized Cash Rewards Card does cost a international transaction payment. But BofA’s premium rewards playing cards and journey playing cards don’t.

Bank of America bank cards with out international transaction charges embrace:

Do Discover Credit Cards Have Foreign Transaction Fees?

No, Discover bank cards don’t cost international transaction charges.

The catch is that Discover bank cards aren’t as extensively accepted by retailers within the U.S. or overseas. Yes, retailers in dozens of nations do take Discover, however Visa or Mastercard are accepted extra typically. If you propose to make use of your Discover card when touring internationally, be sure you have a non-Discover backup.

What Other Banks Don’t Charge Foreign Transaction Fees?

Most large banks supply bank cards with out international transaction charges. It’s more and more frequent to see debit playing cards with out international transaction charges too. But all the time learn the advantageous print — the cardboard’s charges and costs disclosure — and don’t hesitate to ask your financial institution or bank card issuer’s customer support when you’re undecided.

Top Cards With No Foreign Transaction Fees

We’ve roundup up the most effective playing cards with out international transaction charges. Use this listing to kick off your seek for your subsequent FTF-free spending card.

Any Capital One Credit Card

Capital One Venture Rewards Credit Card

Capital One bank cards don’t cost international transaction charges, interval.

Capital One cardholders, like all bank card customers, could also be obligated to pay for dynamic forex conversion once they select to indicate international transactions of their house forex.

For frequent vacationers, the Capital One universe’s clear winner is the Capital One® Venture® Rewards Credit Card, which earns an infinite 2 miles per $1 spent on all eligible purchases — an efficient 2% fee of return when redeemed for journey. Learn extra concerning the Venture Rewards card right here.

Capital One Quicksilver Cash Rewards Credit Card

The different Capital One standout is the Capital One Quicksilver Cash Rewards Credit Card, a preferred cash-back bank card that earns an infinite 1.5% again on all eligible purchases and doesn’t cost an annual payment. Learn extra concerning the Quicksilver card right here.

See our evaluations of the Capital One Venture Rewards Credit Card and the Capital One Quicksilver Cash Rewards Credit Card for extra particulars.

Chase Sapphire Cards

Chase’s two Sapphire-branded bank cards are among the many greatest journey rewards bank cards available on the market immediately.

Chase Sapphire Reserve® Card

Chase Sapphire Reserve Credit Card

The Chase Sapphire Reserve® Card boasts a $300 annual journey credit score, complimentary entry to greater than 1,000 airport lounges worldwide, doubtlessly helpful perks and advantages at a whole bunch of resorts worldwide, and a beneficiant rewards program that earns 3 factors per $1 spent on eligible eating purchases.

Most journey purchases earn 3 factors per $1 spent as properly. Air journey and resort and automobile rental bought by Chase Travel earn 5 whole factors and 10 whole factors per $1 spent, respectively. Sapphire Reserve has different advantages value mentioning, each non permanent and everlasting.

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred® Card is kind of beneficiant in its personal proper. It gives a $50 annual Ultimate Rewards resort credit score, plus:

Sapphire Preferred Card

  • An spectacular sign-up bonus
  • 5 factors per $1 spent on eligible journey purchases made by the Chase Ultimate Rewards portal (after the resort credit score)
  • 3 factors per $1 spent on eligible eating purchases (together with dine-in and takeout), choose streaming purchases, and on-line grocery purchases
  • 2 factors per $1 spent on different eligible journey purchases (after the resort credit score)
  • A ten% annual bonus factors increase on eligible base level earnings

See our evaluations of the Chase Sapphire Reserve Card and Chase Sapphire Preferred Card for extra data.

The Platinum Card® From American Express

Platinum Card American Express

The Platinum Card® From American Express boasts a $200 annual airline payment credit score, as much as $200 in annual credit with Uber, complimentary entry to greater than 1,000 airport lounges worldwide, complimentary elite standing with the Hilton Honors and Marriott Bonvoy loyalty packages (Gold and Gold Elite, respectively), and doubtlessly helpful perks and advantages at a whole bunch of resorts worldwide.

For extra data, see our Platinum Card® From American Express evaluate. Learn extra concerning the Platinum Card right here.

Deserve® EDU Student Credit Card

Deserve Edu Card

The surprisingly beneficiant Deserve® EDU Mastercard for Students boasts a formidable lineup of perks and advantages:

  • A free 12 months of Amazon Prime Student with a qualifying spend of at the least $500 within the first three billing cycles
  • A $100 credit score in the course of the first month of your new Feather furnishings subscription
  • A $10 assertion credit score if you pay for 3 consecutive months of Lemonade insurance coverage protection
  • Cellphone safety as much as $600 per declare
  • 1% money again on all eligible purchases

With no international transaction charges, this in style pupil bank card is good for college kids finding out overseas for a semester — or longer.

See our Deserve® EDU Student Credit Card evaluate for extra data.

Any Discover Credit Card

Like Capital One, Discover by no means prices international transaction charges. That makes it helpful for making purchases with worldwide retailers that course of transactions outdoors the United States.

Discover just isn’t the most effective card to tackle a visit overseas, although. Although it’s now accepted in additional than 180 nations worldwide, its service provider acceptance fee nonetheless trails Visa’s and Mastercard’s. A random service provider in Paris or Tokyo is extra more likely to settle for Visa than Discover.

Plus, Discover’s fraud detection system is extra delicate to worldwide purchases, which is why Discover advises cardholders to inform the issuer of their journey plans earlier than leaving.

Final Word

Exclusively utilizing journey bank cards that don’t cost international transaction charges is only one of some ways to save cash whereas touring overseas.

One frugal journey tip that has served me properly is basing my journey plans round international change charges.

If I’m not in a position to time my worldwide journey to align with when the U.S. greenback is powerful in comparison with most different currencies, then I take into account altering my itinerary to include locations the place the greenback is relatively robust. Countries experiencing bouts of financial weak spot or (nonviolent) political instability sometimes have weaker currencies than their extra affluent, steady neighbors.

Of course, the most effective technique to maximise abroad journey financial savings is “all of the above.” For the financially adventurous amongst us, discovering good methods to cut back the entire price of journey with out sacrificing consolation or security is an enormous perk of the journey, and a worthwhile one at that.