Foreign Transaction Fees: How To Avoid Them & Save
A foreign transaction fee, or international transaction fee, is a 2-4% surcharge that roughly 90% of credit cards tack onto transactions processed outside of the United States. In other words, they’re in play both when you’re traveling abroad and when you’re conducting business with internationally based merchants.
This presents a potentially expensive problem for consumers with international exposure, so to speak, especially since credit cards are by far the cheapest means of currency conversion. The answer, of course, is to make sure you have a no foreign transaction fee credit card in your wallet. Such cards are becoming increasingly common, and two major issuers – Capital One and Discover – have even removed foreign fees from all of their cards.
In order to provide a more complete picture of the foreign transaction fee landscape, WalletHub compared offers from the 10 largest banks and 10 largest credit unions – noting how many no foreign fee cards each has, identifying the best offers of the bunch and more. You can check out our findings in the table below. For more information about what foreign transaction fees are and how they work, see the Foreign Transaction Fee Factoids section that follows.
Some of the cards listed on this page originate from our partners, but that did not impact our conclusions. Offers are accurate as of Oct 15, 2016 and many are likely to have changed since.
|Issuer||Foreign Transaction Fee||Number of Cards With No Foreign Fee||Best No Foreign Fee Offer||International Collect Calls|
|TOP 11 Issuers|
|Up to 2.70%||4||
American Express Gold
|Up to 3.00%||2||
Bank of America® Travel Rewards credit card
|No foreign fees||6||
Capital One® VentureOne® Rewards Credit Card
|Up to 3.00%||1||
Chase Sapphire Preferred® Card
|Up to 3.00%||2||
Citi® / AAdvantage® Executive World Elite™ Mastercard®
|No foreign fees||8||
Discover it® Miles
|No foreign fees||2||
HSBC Premier World Mastercard® credit card
|Up to 2.00%||1||
U.S. Bank FlexPerks® Travel Rewards Visa Signature® Card
|Up to 3.00%||2||
Wells Fargo Propel 365 American Express® Card
|Top 10 Credit Unions|
|No foreign fees||1||
|No foreign fees||7||
PenFed Premium Travel Rewards
|No foreign fees||3||
Star One Visa Signature Rewards
|Up to 1.10%||1||
Security Service Power Travel Rewards
|Up to 1.00%||2||
NFCU GO REWARDS
Foreign Transaction Fee Factoids & Forewarning
Like much about credit cards, foreign transaction fees can be confusing. With that in mind, we’ve compiled a quick list of tips and background info to help clarify the situation and enable you to avoid making mistakes.
- A credit card foreign transaction fee is generally the combination of charges assessed by the card network (e.g. MasterCard, VISA) and a fee that your credit card issuer (e.g. Bank of America, Citi) charges on top of that.
- Foreign transaction fees are at the sole discretion of the issuing bank, while the countries in which a card will be accepted depends on the credit card network (i.e. Visa, MasterCard, Discover, Amex).
- Remember, you don’t actually need to leave American soil to be charged a foreign transaction fee. Any time you make a purchase online that is processed through an overseas merchant, you will be charged this fee. If the prices on a website are quoted in a foreign currency, that’s a good indication you are transacting with an international merchant.
- You should also keep an eye out for dynamic currency conversion. This happens when an overseas merchant offers to convert your credit card transaction from the local currency into U.S. dollars. While it may sound tempting to see your transaction in a currency that you are familiar with, you should always refuse this offer. Many merchants will charge exorbitantly high exchange rates, as high as 7%, to do the conversion and pocket the difference as a fee.
- Always call your credit card company before using your credit card to make purchases abroad so they do not become suspicious and suspend your account due to fraud concerns.
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