There’s very little we don’t like about TPG other than unnecessary fees — including foreign transaction fees.
You may have noticed that when you use some credit cards abroad (or on a website not hosted in the US), an additional fee is charged with each purchase.
Today, let’s find out what those fees are and how you can avoid them in the future.
What are foreign transaction fees?
Foreign transaction fees are charged on certain cards when you make a purchase through a foreign bank to process the transaction. When you make a transaction while traveling or through a foreign website, banks may have to convert the purchase into US dollars. On some credit cards, the issuer then passes the conversion cost on to the consumer.
Standard foreign transaction fees tend to be around 3%. However, Capital One and Discover are unique in that there are no foreign transaction fees on all credit cards. And you can find No foreign transaction fees on individuals And business card from all issuers.
| Card issuer | Standard foreign transaction fees |
|---|---|
| American Express foreign transaction fees. | 2.7%. |
| Bank of America foreign transaction fees. | 3%. |
| Barclays foreign transaction fees. | 2.99%. |
| Capital One foreign transaction fee. | Do not have. |
| Chase foreign transaction fees. | 3%. |
| Citi’s foreign transaction fees. | 3%. |
| Discover foreign transaction fees. | Do not have. |
| Bank of America foreign transaction fees. | 3% for different currencies; 2% for US dollar transactions. |
| Wells Fargo’s foreign transaction fees. | 3%. |
How much is the foreign transaction fee?
Generally, offshore transaction fees hover around 3% for most issuers. Visa and Mastercard charge banks 1% to process purchases made overseas, and many US issuers charge an additional 1-2% fee. Capital One and Discover do not charge foreign transaction fees on any of their credit cards.
Which card has no foreign transaction fee?
Most top travel credit cards No foreign transaction fees. In fact, it’s rare for cards offering travel rewards and perks to charge any foreign transaction fees. While most issuers charge a foreign transaction fee of around 3% for at least some of their products, Capital One and Discover do not charge a foreign transaction fee on any credit cards. their.
Card issuers are required to provide potential and existing customers with access to credit card-related rates and fees, including foreign transaction fees. Check the terms and conditions of your credit card to see if your card (or the card you’re considering applying for) charges a foreign transaction fee.
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When looking at rates and fees, you can usually find foreign transaction fees clearly listed in the fees section.
Foreign transaction fees vs ATM fees
Another fee you may hear about when traveling is foreign ATM fees. Although the two fees may apply when traveling outside of the United States, they are not synonymous.
ONE Foreign ATM fees Fees are charged when you withdraw cash from an ATM abroad. Some of these banks are free, especially if you use an ATM that is in a particular banking network.
Additionally, you may incur additional fees when using an ATM abroad, including a flat fee from your bank for using an ATM that is not affiliated with the bank (usually $5). , currency conversion fees (usually reduced in line with foreign transaction fees at 3%) and additional fees charged by the owner of the particular ATM you use.
This is one reason we recommend paying by credit card whenever possible. But in some places, cash is still king, and you’ll need to have a game plan to avoid these fees—or factor them into your budget.
Related: Ways to save money when withdrawing from ATMs abroad
How to avoid foreign transaction fees
Use a card with no foreign transaction fees
The easiest way to avoid foreign transaction fees is to use a fee-free card. TPG has regularly updated guidance on Top credit cards with no foreign transaction fees can help you find the best pass to use for your travels.
Unfortunately, cashback card such as Unlimited pursuit of freedom and Blue Cash Preferred® Card from American Express (see rates and fees) tends to charge foreign transaction fees. But keep in mind that some issuers, including Capital One and Discover, charge no foreign transaction fees on their credit cards at all.
Avoid ‘dynamic currency conversion’
When using a card terminal abroad, you may be prompted to pay in your local currency or US dollars. You should always choose the local currency.
Dynamic currency conversion is a sneaky way that banks encourage you to pay in your local currency (US dollars) while abroad. However, they often give you low conversion rates, so it’s best to pay in euros, pesos or whatever local currency.
Related: I fell in love with dynamic currency conversion — reader mistake story
Payment in cash
Of course, you will also avoid foreign transaction fees by paying in cash. But those purchases won’t bring you any rewards, and overseas cash withdrawals can incur nasty fees.
bottom line
The good news is that foreign transaction fees are less common across the country top credit cards than before. Hopefully the entire industry is moving away from charging these kinds of fees to customers. Until then, check your credit card’s terms and conditions to see if you’ll have to pay fees when you travel, and plan to use the card accordingly.
To avoid foreign transaction fees, choose a top travel rewards card or a card from Capital One or Discover. And make sure to always pay in your local currency instead of US dollars so you can avoid low conversion rates.
Additional reporting by Ryan Wilcox and Stella Shon.
For Blue Cash Preferred card rates and fees, click This.
