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A foreign transaction fee is a charge imposed by credit card issuers on transactions that are conducted in a foreign currency or involve a foreign financial institution. When you use your credit card to make a purchase in a currency other than your card's native currency or when you make a transaction with a merchant located in a foreign country, a foreign transaction fee may be applied to the transaction.
The purpose of this fee is to compensate the credit card issuer for the costs associated with currency conversion and the use of foreign banking networks. The fee is typically a percentage of the transaction amount, often ranging from 1% to 3% of the purchase. Some credit cards, particularly those designed for travel or international use, may have lower or no foreign transaction fees.
Before using your credit card abroad, it's advisable to check your card's terms and conditions or contact your card issuer to understand the specific foreign transaction fees that may apply to your transactions. It may be worth applying for a credit card with no foreign transaction fee before going on your trip or even booking flights, hotels, day trips, etc.
People also ask
Does my credit card have foreign transaction fees?
Your credit card will likely have a foreign transaction fee of around 3% if it is from Chase, PNC, Bank of America, Barclays or U.S. Bank, which charge foreign fees on most (but not all) of their cards. Your credit card will not have a foreign transaction fee if it is from Capital One, Discover, USAA, PenFed or HSBC.
Credit Card Issuers That Do Not Charge Foreign Transaction Fees
read full answer by Chip Lupo, Credit Card WriterHow do you calculate a foreign transaction fee?
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...
read full answer by Chip Lupo, Credit Card WriterWhat is the Mastercard foreign transaction fee?
The Mastercard foreign transaction fee is usually 0% or 3%, depending on which card you have and the bank or credit union that issued it. Generally, foreign transaction fees apply every time you make a purchase at a physical location in a foreign country or an online transaction through an internationally-based merchant. So, if you’re travelling a lot, make sure to get a Mastercard that doesn’t charge this fee.
Keep in mind that the Mastercard foreign transaction fee comes in two...
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