If you’re planning to travel overseas a lot, it would be best to get a card with a 0% foreign transaction fee. After all, vacations are expensive enough without adding an extra 3% to the price of everything. It’s also good to remember that you don’t have to travel to be charged a foreign fee. If you buy something online from a vendor in another country and get it shipped to you, foreign transaction fees apply there, too.
To calculate a foreign transaction fee, simply multiply the percentage your credit card charges for the fee by the total of your international purchase. Foreign transaction fees are typically around 3% of each transaction, and that amount is added to your purchase. While 3% may not seem like a huge price to pay, these fees can add up over many transactions, whether you’re shopping on foreign soil or through a website based outside of the U.S.… read full answer
When you’re charged a foreign transaction fee, you’re essentially paying a combination of surcharges assessed by both the credit card network and the issuer. The credit card issuer, however, ultimately decides whether to levy the fee. If a credit card does not charge a foreign transaction fee, it’s because the issuer is absorbing the credit card network’s percentage of the fee rather than passing the cost on to their customers.
If a credit card charges a foreign transaction fee, it will be listed under the fees section in the card’s terms and conditions.
The Barclays credit card exchange rate is the exchange rate quoted by Visa or Mastercard plus a foreign transaction fee between 0% and 3%. The network’s exchange rate will vary based on the date of the purchase, and the card network that’s used will depend on which Barclays credit card you have. The foreign transaction fee will also vary by card.… read full answer
Visa and Mastercard publish their exchange rates daily, while Discover and American Express don’t publish them at all. Some reports say that Mastercard tends to offer marginally better exchange rates than the others, but with so much volatility in the rates, this isn’t always the case. All in all, the differences in these exchange rates are negligible, and shouldn’t determine which Barclays card you carry.
Ideally, though, you should always use a credit card with no foreign transaction fee when purchasing from international merchants. As long as you get a card with no foreign transaction fee and avoid dynamic currency conversion, the exchange rates you’ll pay on international spending with a credit card will be much lower than those you’d get converting cash with banks, credit unions, or airport currency exchange services.
The best way to avoid foreign transaction fees is to use a debit or credit card that waives such fees while traveling abroad. About 25% of the available credit card offers on the market don’t charge foreign transaction fees, and those cards are available to people of all credit levels, so there’s really no reason to pay the extra charge when you travel abroad.… read full answer
1. Get a credit card with no foreign transaction fee.
Foreign transaction fees are charged by credit card companies, not merchants, and the surcharge could add as much as 4% to purchases made outside the U.S. These fees also apply to online purchases processed abroad, even if you’re sitting in front of your computer at home when you complete the transaction. If a card charges a foreign transaction fee, it will be listed in the card’s terms and conditions.
The 10 largest credit card companies all offer at least some cards without foreign transaction fees, and some issuers don’t charge these fees on any of their credit cards. Using credit cards with no foreign fees rather than cash also is a convenient, inexpensive way to avoid having to convert physical currency while traveling abroad.
2. Understand that foreign fees can be an issue even when you’re not traveling.
You don’t have to be in another country to get hit with a foreign transaction fee. If you do business online or by phone through a merchant based outside of the U.S., make sure you pay for your purchase with a no foreign fee credit card to sidestep the surcharge. If you use a card with a foreign fee, you’ll be charged this fee on top of your transaction, the same as you would if you had made the purchase at a physical location abroad.
3. Have a no foreign fee debit card handy.
You probably won’t be able to use credit cards for all your international purchases if you travel abroad, so having a debit card will allow you to get cash in the local currency when you need it. Many debit cards also charge foreign transaction fees, so make sure to bring a Visa or Mastercard debit card with no foreign fee when you head out of the country.
4. Avoid converting currency at airport kiosks.
Converting your cash at an airport kiosk outside of the U.S. may be convenient, but that convenience will cost you. Currency conversions at airport-based exchange stations come with extraordinarily high fees and less-than-favorable exchange rates.
Instead, use a no foreign transaction fee credit card for most of your purchases, and a no foreign fee debit card to withdraw physical currency. These options are very convenient, and each allows you to take advantage of low Visa and Mastercard currency conversion rates automatically.
5. Do not accept offers for dynamic currency conversion.
Dynamic currency conversion (DCC) is a practice in which foreign merchants may offer to charge your purchase in U.S. dollars instead of the local currency. You should never accept these offers because if the merchant converts your payment for you, they may set their own high exchange rate to increase their profits.
With that, you know the basics of how to avoid unnecessary costs when spending money internationally. If you already have a credit card that charges foreign transaction fees, there’s not much you can do to avoid them, save for not using the card abroad. Consider applying for a travel credit card with good ongoing rewards and no foreign transaction fees to use instead. There are plenty to choose from.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by WalletHub. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.