List Of Credit Card Foreign Currency Transaction Fees

Published 3/8/08 (Modified 6/24/11)
By MoneyBlueBook

Not too long ago I went on vacation in East Asia. While I was there I had the fortune to be accompanied by local friends who could spot me so I didn't need to convert my American dollars into local currency. However there were at least two occasions when I glanced upon several beautiful small wooden art pieces that I wanted to buy. While I had a few local currency bills on me, it wasn't enough to buy the slightly expensive art pieces. So I had to resort to what I ordinarily would do back home in the United States - pull out my trusty cash back credit card. Fortunately, I had the foresight prior to traveling to another country, to research and familiarize myself with credit card foreign currency exchange fees.

Watch Out For Hidden International Credit Card Foreign Currency Exchange Charges

While foreign currency exchange fees are now generally listed and disclosed by credit card companies, card issuers rarely publicize these hidden charges, preferring to leave them in the fine print. While some complain that the majority of these interchange fees are not used to process the actual currency exchange, but rather used to fund credit card reward programs and other direct advertising campaigns, the real concern is the lack of education when it comes to incurring these fees. Frequently, consumers who use their credit cards overseas come home to the unwelcome surprise of costly fees on their billing statement.

The foreign currency transaction fee for credit card purchases is comprised of two parts - the fee percentage charged by the card payment network (such as Visa, Master Card, Discover, American Express) and the fee percentage added by the card issuer (such as Citibank, Chase, Bank of America). Visa and MasterCard impose a standard 1% fee on all foreign currency charges to cover the expense of converting your foreign currency purchases back into U.S. dollars. The fee is imposed on the card issuer, but the expense is usually passed onto the consumer. Banks and card issuers that issue Visa and Mastercard also tack on their own additional transaction fee to the total - usually another 2%.

American Express does not have an extra card issuer fee, but it does impose its own foreign currency conversion charge of 2%. Previously, Discover Card was the only major card payment network that levied no foreign purchase transaction fees, however they have now updated their policy and tacked on the nearly ubiquitous charges. But then I challenge you to find a place overseas that actually accepts Discover Card. I think those living abroad probably have never heard of Discover before, likely thinking it's some off shoot of Visa or Master Card.

Credit Card Issuers That Have No Foreign Currency Transaction Fees

Capital One credit card is one of two major issuers that charges no foreign currency transaction fee for credit card purchases made abroad. While Visa and Mastercard still levy fees on Capital One - the card issuer has made the conscientious decision to waive the fees as a cost of attracting customers. Thus it looks like your best foreign purchase bet would be to apply for a Capital One Visa Or Mastercard to avoid the expensive and cumulative currency exchange transaction fees. I personally have the Capital One No Hassle Miles Card, which I use to earn 1.25 miles on each dollar spent, good for any airline with no seating restrictions, mileage cap, or expiration date on miles earned.

List of Credit Card Foreign Transaction Fees Sorted From Lowest to Highest

Today, most of these foreign transaction fees are laid out in more readable form on your monthly credit card statement. Sometimes they are denoted by a simple asterisk indicating the fee percentage that was levied, while some card issuers will list the actual dollar amount of the transaction fee portion. The transaction fees I've provided below include the total combined charges imposed by both the card issuer and the card payment network. Pay attention to some of the hidden special offers out there, especially the ones from more obscure credit unions and brokerage/banks.

Credit Card Issuer/Offer
Fee For Foreign Currency Transactions
Capital One 0%
Affinity Federal Credit Union 1%
NASA Federal Credit Union 1%
SunTrust Bank 1%
Discover Card 2% - Not Generally Accepted Overseas
U.S. Bank 2%
American Express 2.7% - Not Generally Accepted Overseas
Bank of America 3%
BB&T Bank 3%
Chase/Washington Mutual 3%
Citibank (Citi Card) 3%
HSBC 3%
TD Bank 3%
Wells Fargo 3%

Reminder Before Using Your Credit Card To Make Foreign Purchases

Modern credit card programs today implement sophisticated transaction software to detect fraudulent and unauthorized credit card activity. If your card has always been used in the New York tri-state region for example, but suddenly credit charges start streaming in from some place like Thailand or Indonesia, your card issuer may raise an eyebrow and start declining those international charges as part of their anti-fraud measures. A quick e-mail or phone call to your credit card company before you travel should prevent such an inconvenience from happening.

Credit Card Users Who Have Made Credit Purchases Abroad May Be Entitled To A Cash Settlement

If you made a foreign transaction using your Visa, Mastercard, or Diner's Club credit card at least once between February 1, 1996 and November 8, 2006, you may be entitled to claim money from a legal settlement. In response to an anti-trust class action lawsuit brought against Visa, Mastercard, and Diner's Club for alleged fraud and conspiracy to fix and conceal foreign currency transaction fees on credit card purchases to the detriment of card issuers and consumers, a legal settlement has been worked out. Under the settlement terms of In re Currency Conversion Fee Antitrust Litigation (MDL 1409), those who fall under the plaintiff class have three ways to participate and claim their settlement money.

While two of the options require that you gather your billing statements and receipts to verify the estimated value of your foreign credit card purchases, the simplest method for most is to file for the Easy Refund option, which is the route I personally took. As noted, this option is recommended if you traveled outside of the U.S. for less than one week or had foreign transactions of less than $2,500 using your eligible cards during the 1996 to 2006 period.

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151 Responses to “Foreign Transaction Fee | Credit Card Fees | Money Blue Book” 

  1. toni says:

    Some of the big banks like Well Fargo can now send money to most countries. It's not the same thing as a wire transfer. Wells fargo calls it Express Send.The rate seems reasonable. I am not sure how it compares to some of the other options.

  2. Rosalyn says:

    I just purchased my air travel tickets using my Bank of America debit card knowing the international fee that will hit me if I use the Bank of America credit card. They still charged me with 3% international fee. Arrghgh! Now, I'm currently told to by the bank officer that I should review my terms of agreement in use of my debit card pertaining to international fees. I did and didn't see it on their online banking fees at a glance update or on the in depth hard copy I have here on my hand. They really hide these fees...and these should be illegal. Or am I just throwing punches to the moon?

  3. Matt says:

    Has anyone tried transfering from your US bank to PayPal and then from PayPal to a foreign bank?

    Seems the fees from PayPal are pretty small compared to Western Union services.

    Not sure how it compares to bank to bank transfers.

  4. Ted Fleischaker says:

    Face it Rosalyn..ANY of the big guys (banks) are gonna hit you with those fees if you use their cards. There's no way around it except to read carefully, ask and then use cards like Capital One or others folks here have mentioned which do not charge fees or charge less. While I get my fees refunded by my local bank for ATMs and don't pay one on Capital One so am close to fee free, I oppose the government regulating this. Remember as a holder of bank stock I sure hope these guys are in this to make money. It's not up to the government to outlaw their fees ---it's up to us as consumers to shop for the best deals and reward places which give them with our business while letting the greedy Chases and B of A's know why we do not use their banks and cards. Oh and why didn't you buy your tickets in the US where you'd not have a fee?

  5. Tony says:

    Do third parties i.e. travel websites have any liability for failure to disclose that your credit card company may be charging a foreign transaction fee on your purchase?

  6. Drew says:

    Matt - the problem with your solution is that you would have to have a foreign bank account to receive the money. That would not be possible for someone on vacation.

    Someone further up this thread asked the question (not answered that I could see) about how banks set the conversion rate? When I went to Visa and Mastercard, it appears that they set the rate, then let the issuing bank add the applicable foreign transaction fee. If that's true, then Capital One is truly the best option, since their conversion rate would be the same as any other banks - but their lack of a transaction fee would make them the cheapest. Is that interpretation correct?

  7. doris says:

    @ Matt. I opened a bank account at citi bank here and one at citi bank Germany (which is now Targobank and doesn't belong to citi any longer but the link still exists. I can send through the ATM up to 5000$ per transaction for a 10$ fee and 2% exchange rate. Which is still too much as I can take out cash with a ATM card in Europe at market rate. (HSBC Premier). My Hsbc World Mastercard doesn't take any exchange fee either. Anybody know a bank which does it cheaper than citi, please post here. I don't think any bank should impose an exchange fee as they don't need to do it for cash out either!

  8. askmrlee says:

    @Drew <>

    That is correct. I have used Capital One and Fidelity Rewards Amex (issued by FIA Card Services) in Japan. The exchange rate for Capital One was almost the same as the mid-market rate on xe.com. The Fidelity Rewards Amex was about 1% less, as expected.

    @Tony - No liability on the part of the travel company, because the travel site really has no control over how your credit card company processes the payment. Besides, your credit card company has disclosed any fees for foreign transactions in the Terms and Conditions for the card. If you cannot find these papers, it certainly can be requested by mail by calling or emailing them via their online banking site.

    If you are uncertain if your online transaction will be foreign or not, find out who the payment processor is before you complete the transaction. The company you are dealing with may be domestic, but the processor could be foreign even if done in US Dollars.

  9. askmrlee says:

    @Matt. I've used Paypal for international bank transfers. it has been over a year since I did this, but as far as I can remember there were no separate fees, it was just bundled in the exchange rate, which was not the best, but still OK.

  10. Les says:

    Great thread! I am now doing a great deal of traveling. I agree about using Capital One as much as possible abroad. They are very 'careful' about their security, but I've only had one problem. I was trying to use my Cap. One credit card to pay for a trip with a Moroccan travel agency, and since it took longer than expected for them to process the charge, my authorization had expired (after one week). I called again, re-authorized, and it went right through. I just got back from that trip and used the card throughout France and Morocco (including some small stores and restaurants) and never had a proble.

    Regarding getting money from an ATM, my Wells Fargo ATM card charges me $4.00 per transaction. Instead I use an ATM card which was issued by my Credit Union, and they charge only $1.00 for each transaction not made from one of their ATMs, regardless where the withdrawal was made (or for how much). Their conversion rates are the same as everyone else's. I call then before a trip to tell them where I'll be, and I've never had a problem. If you belong to a credit union I recommend checking with them about ATM withdrawals abroad.

  11. Parag says:

    This is a great thread - thank you for starting it. I too am an American Expat and a Capital One user though would comment it is the least bad option rather than ideal. Besides the over zealous blocks (which I guess is better than not doing anything?), about a couple years back, they changed their dispute system to something much more time consuming and bureaucratic - which is much harder to deal with (printing, filling out forms, faxing in to a US number, etc.) than what Amex or Discover do - which is fight for you against those that would try to commit fraud, overcharge, etc from a simple phone call. Customer service at Capital One is pretty mediocre too in their call centers. Anyone have a link to the Schwab Credit Card? How easy or hard is it to sign up overseas?

  12. Ennazus says:

    I just called Capital One and was told they charge 2.5%. I am Canadian...perhaps the no foreign currency conversion fee option is only for US citizens???

  13. Expat in Africa says:

    @Parag

    Charles Schwab discontinued new applications for the card in March 2010. They will start another credit, but do not know when. (from a customer service phone call 7/10/10)

  14. Ceci says:

    American Express' foreign transaction fee is 2.7% since 01/11/09 (this post is from 2008, then it was indeedd 2%). I'm an Amex holder and I use it abroad, so I get to see this info in my bill.

    I agree that Amex is not as accepted as Visa or Mastercard abroad, but there are some exceptions. Till mid-2008 at least, it was the only foreign credit card accepted by the Indian Railways.

    Great blog, thanks for the info.

  15. askmrlee says:

    Amex issued Corporate cards' foreign transaction fee is 2.5%.

  16. Bonnie says:

    My college-age daughter is going to Barcelona for a 4 month internship soon and I need some money management advice. What is the best option? She doesn't have a credit card yet (or job). She will have housing and living expenses. Will need to get cash and buy things. Should she have a debit and a credit card? Our bank fees are high. EverBank, CapOne and Schwab have been suggested but previous posts indicate CapOne may not take her as a student and Schwab is not taking new accounts. Any advice? Is opening a personal account in Spain hard/expensive?

    This is a really useful blog.

  17. Doris says:

    My daughter is in Europe at school as well. It is quite difficult to open an account if you are not a resident (everywhere in the world). But as your daughter doesn't have a credit card now she should not need one anyhow. She will be totally fine with cash which she needs in most cases anyhow as supermarkets and shops in Europe don't always accept CCs. A normal debit card of a checking account here is sufficient to get cash out of ATMs and it doesn't cost exchange fees (at least not for HSBC, Smith Barney or Citi ask your bank). That's what I use always in Europe to get cash.

  18. Lee says:

    My daughter is also traveling to many countries in South America next year on a low budget. Is it worth applying for a Capital One credit card to avoid the foreign adjustment fee or should she just take one debit/credit card that charges a 2% fee? Are there per use charges every time you use an ATM machine? Any advice about South America travels and financial consequences? She'll be many different countries.
    Also, is there another blog about cell phones in foreign countries? Rather than extending service there on her current Verizon phone, we got advice recently to have her buy a cell phone when she gets there to avoid roaming charges for local calls.

  19. Doris says:

    Lee,

    With a debit card used at ATMs you shouldn't have the 2% exchange fee just the normal ATM fee (which can be as high as 6$). Make sure the card is connected to Visa as I found that at many south american ATMs they don't accept master card.
    If you would have a T-mobil or Att phone you would just need to buy a new simcard (which gives you a phone no. and prepaid minutes. But you can buy an unlocked phone over there or here. As she travels through more countries this can get a quite costly endeavor - the new simcard cost without giving you phone time and she would need one for each country. I would recommend to take her phone, not use it often and try to stay with text messages. And else wise rely on the internet and Skype to talk to home. Thats what all kids do!

  20. askmrlee says:

    @doris. This is NOT correct. ATM transaction fees and foreign transaction fees depend on the bank. You must ask this question to your bank because there is no universal answer. Visa and MasterCard pass through foreign transaction fees to their member banks which in turn often pass this to the customer. But many banks do NOT do this and offer fee free cards. You need to read all account disclosures.

    If you want to be safe, get a brokerage account at Schwab or Fidelity with a checking account and get their debit cards. Neither imposes ATM fees. The Schwab First Visa debit card has no foreign transaction fee. The Fidelity visa debit card has a 1% fee.

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