No Foreign Transaction Fee Debit Cards

It's a good idea to get an international debit card before traveling abroad, in addition to the best international credit card for your needs. You won't be able to use plastic for every purchase. So you're going to need some cash. And while you could convert hard currency at a bank or airport kiosk, both options are far more expensive than using a Visa or Mastercard debit card to withdraw cash as needed.

You just need to find one with no foreign transaction fee and a low international ATM fee. In general, an ATM fee below 1% is a pretty good deal.

The best way to avoid foreign transaction fees is to use a debit or credit card that waives foreign fees when you're traveling abroad or making online purchases from international retailers. About 25% of credit card offers don't have foreign transaction fees, so there's no reason to pay the extra charge.

How to avoid foreign transaction fees

• Get a credit card with no foreign transaction fee
• Understand that foreign fees can be an issue even when you're not traveling
• Have a no foreign fee debit card handy
• Avoid converting currency at airport kiosks
• Refuse offers for dynamic currency conversion

1. Get a credit card with no foreign transaction fee.

Foreign transaction fees are charged by credit card companies and the surcharge could add as much as 4% to purchases made outside the U.S. These fees also apply to online purchases processed through international merchants. 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. Plus, some issuers don't charge these fees on any of their credit cards. Using credit cards with no foreign fees rather than cash is also 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 may not be able to use credit cards for all your purchases 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, though. 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. Refuse 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, except for not using the card abroad. Consider applying for a travel credit card with good ongoing rewards and no foreign transaction fees, instead. There are plenty of options to choose from.

Banks that have no foreign transaction fees on at least some debit card purchases, ATM withdrawals and credit card transactions include Capital One and HSBC. There are also plenty of banks that offer no foreign transaction fees on certain types of financial products but not others. Below, you can see what each major bank offers.

Banks With No Foreign Transaction Fees

• American Express: certain credit cards
• Bank of America: certain credit cards
• Barclays: certain credit cards
• Capital One: all credit cards, certain debit cards, certain ATM transactions
• Charles Schwab Bank: certain debit cards, certain ATM transactions
• Chase: certain credit cards
• Citibank: certain credit cards, certain ATM transactions
• SBC: all credit cards, certain debit cards, certain ATM transactions
• PNC: certain credit cards, certain ATM transactions
• Santander Bank: certain credit cards, certain debit cards
• U.S. Bank: certain credit cards
• Wells Fargo: certain credit cards, certain ATM transactions

You can learn more about the best credit cards with no foreign transaction fees and debit cards with no foreign transaction fees on WalletHub.

To decide whether you should get a credit card or debit card for international travel, it's important to consider aspects like fraud protection and costs associated with purchases and cash withdrawals.

All major-issuer credit cards and debit cards come with $0 liability guarantees, meaning you won't be held liable for any unauthorized charges. However, credit cards do make fraud easier to deal with.

Having said that, our suggestion is to use international credit cards for purchases and international debit cards for cash withdrawals while traveling abroad. The answer to this question is, therefore, both.

One of the major banks that do not charge a foreign exchange fee on their credit cards and debit cards is Capital One. A foreign exchange fee is typically a 1% fee that is charged when making a purchase while in a foreign country or when doing business with a foreign merchant while in the U.S. You can also incur the fee when you are transferring funds from a U.S. bank to one that's overseas. It may be difficult to see how much the foreign exchange fee is for some banks, as that fee is wrapped into the foreign transaction fee.

The best way to avoid paying a foreign exchange fee is to get a card that doesn't charge a foreign transaction fee. Below, you'll see a list of banks that don't charge foreign fees on any of their credit cards, followed by WalletHub's editors' picks for the best no foreign transaction fee credit cards.

Banks That Don't Charge Foreign Exchange Fees

• Capital One
• HSBC  (credit cards and some debit cards)
• USAA (only on credit cards)

Best No Foreign Transaction Fee Credit Cards

Using a credit card with no foreign transaction fees can also help with currency conversion costs, saving travelers up to about 9% compared to exchanging hard currency.

Having a credit card and a debit card with no foreign transaction fee is just one way to avoid extra costs while shopping abroad. To see some other ways, check out WalletHub's tips for avoiding foreign transaction fees.