A Visa foreign transaction fee of 0% to 3% could apply to purchases processed outside the U.S., depending on which Visa credit card or debit card you have. The Visa foreign transaction fee is usually 0% on travel rewards credit cards, which are built for spending all around the world. And some credit card companies, such as Capital One, don’t charge foreign fees on any of their cards, Visa or Mastercard. But many other Visa cards come with foreign transaction fees of 1%, 2% or even 3%.
If your Visa card does have a foreign transaction fee, you’ll have to pay it any time you make a purchase from a merchant that’s based in a country other than the U.S. So that means it applies to online purchases, too.
While it’s difficult to list every Visa’s foreign transaction fee – the are a ton of Visa cards – we can go over a few popular examples.
As you can see, there are a lot of opportunities to get a Visa card with no foreign transaction fee. That’s definitely a good idea before traveling (or shopping) abroad, since Visa is accepted just about anywhere that takes credit cards worldwide.
Yes, foreign transaction fees do apply to online purchases whenever the merchant is based outside the U.S. That goes both for debit cards and credit cards with foreign transaction fees. For example, if you buy something online from a merchant in the U.K. and pay with a card that has a foreign transaction fee, that fee will apply. Foreign transaction fees on credit cards can add as much as 3% onto each international purchase you make. But there’s an easy solution: Just use a credit card with no foreign transaction fee whenever you buy something from a foreign seller.… read full answer
So when in doubt, a no foreign fee card is the way to go. And there are plenty with really good rewards. Plus, credit cards get you great currency conversion rates.
Here’s when foreign transaction fees apply online (and how to avoid them):
The Basics: Foreign transaction fees apply online when a transaction is processed outside the United States. If you see prices listed in non-U.S. currency, there’s a good chance you’ll be charged a foreign transaction fee on your purchase.
Fees on U.S. Websites: If you buy something on Amazon.com from a seller in China, Amazon processes the payment, but a foreign transaction fee may still apply because the merchant is located outside the U.S. Remember, your card issuer is the one charging the fee, not the merchant. Similarly, if you book international travel through a U.S. website, you could still be tagged with a foreign transaction fee if the purchase is processed by a foreign airline, hotel, etc.
Avoid Declined Transactions: Your credit card company could mistake international purchases for fraud and decline them, especially if they don’t match your usual spending habits. You can avoid the inconvenience by notifying your bank or credit union about any international travel or shopping plans you have.
Another thing to watch for is dynamic currency conversion, which is when international merchants’ offers to process your transaction in U.S. dollars instead of their local currency. It’s supposed to be for your convenience, but most often than not, it’s a trick that lets a merchant apply an unfavorable exchange rate to pad its profits a bit, at your expense. So it’s best to decline the overture as it could be as much as 7% higher than the actual going rate. Credit cards automatically offer great currency conversion rates, and you can always use your phone (or a basic calculator) to convert prices to dollars at the current exchange rate, if that would make international shopping more comfortable for you.
The best credit card with no annual fee and no foreign transaction fee is the Capital One SavorOne Cash Rewards Credit Card because it offers the most rewards among the 250+ credit cards with no annual fee and no foreign fee available right now. Capital One SavorOne gives 1 - 3% cash back on purchases. It also offers an initial bonus of $200 for spending $500 in the first 3 months after account opening.… read full answer
Best Credit Cards with No Annual Fee and No Foreign Transaction Fee
The best credit card with no annual or foreign fees really depends on your credit standing and what type of rewards or other features you’re looking for. Fortunately, there’s a whole range of attractive possibilities.
The best way to avoid foreign transaction fees is to get a credit card that doesn’t charge them. 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.
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