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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. Ted says:

    Do you mean ATM withdrawals from chequing or as loans against thecard itself (cash advances)? There are major differences.

  2. Richard says:

    I don't trust CapitalOne. There are way too many horror stories about their credit cards. They issue you a credit card but don't tell the 3 reporting agencies what your limit is. Therefore if you want to move to another bank's VISA or MC, because of CapitalOne's unfair billing practices, you will be denied by the new bank because you have too much credit line open.

    As for an ATM Card, we use Bank of America's. You can withdraw local cash in Europe, Asia or North America in Barclay's (mostly UK), BNP Paribas (mostly France), Deutsche Bank (mostly Germany), Santander Serfin (Mexico), ScotiaBank (Canada), Westpac (mostly Australia & New Zealand) and China Construction Bank (China) ATMs with NO TRANSACTION FEES and favorable wholesale exchange rates. We use them all the time and are very satisfied. You can find Barclay's and Paribas ATMs in other European countries too. Get a list from them. B of A is in many states in the US. Just open a checking/savings account and ask for a "VISA Debit Card". Then call their fraud dept. and tell them where and when you'll be out of the country, otherwise your card gets frozen after the first transaction. Beware too, the "toll free 800 number" usually will not work from Europe. Ask for their "local" number with regular area code and call "collect" from Europe if you lose your card or have a problem with it. Sometimes they have a "no toll" European phone number too.

    Other banks have global alliances also.

    Hope this helps. Rich...

  3. Ted says:

    Richard I shall politely but firmly disagree about Capital One not being honest about credit limits and dealings. They are way too over cautious on the security I will grant but even when I had to call to get the "hold" off my account from France (after telling them I would be in France) in April they paid for the call and it was straightened out within 15 minutes. They have never caused me one bit of trouble with any credit reporting agency nor any caused denials on further cards I have applied for elsewhere. Perhaps you are near your limit, or don't pay on time or some such which is not mentioned by you, but as a pay on time person here who stays within my limits I have never ever had an issue caused by them save for the craziness with their security which is more aggravation than an actual problem.

    As far as ATMs use a local bank and NOT one of the big guys...tell them you want some fee rebates. Our local bank refunds EVERY Penny of ALL of our ATM fees, charges and transaction fees when we return. We just hand them the receipts, they total it up and issue a credit. Thus it costs us ZERO to use ATMs in Europe, Canada and elsewhere and we are not restricted to this or that bank's machines---we can go anywhere. Get set up with a local bank in your area, let them know you want this and it can be arranged. All we had to do was ASK.

  4. askmrlee says:

    As for bank accounts, you may be best off with a brokerage type account. Fidelity offers a MySmartCash account with a PNC issued Visa debit card. It has a 1% foreign transaction fee and reimbursement of all ATM fees. Charles Schwab Bank offers a Visa debit card with reimbursement of all ATM fees and zero foreign transaction fees.

    HSBC Premier offers no foreign transaction fees (not sure about ATM fees) but requires a large balance of $50 to $100K+ in the US to get an account. However, mortgages may be included, so it could meet your needs.

    A local bank or credit union may no longer be a bargain for foreign transaction fees in the past as they have been passing through the Visa and MasterCard association foreign transaction fees. My local credit union continues to reimburse all ATM fees, but it now passes a 3% "Visa International association fee".

    The key is to check with the bank by looking for printed disclosures. Unfortunately it is often not enough just to ask someone, because they may or may not know.

  5. Ted says:

    Richard....

    Thanks for the comments. I do think some folks over-dramatize and perhaps your friend is on the list. We did a cruise starting in Ft Lauderdale, then stopping in Bermuda, then Scotland, Ireland, France then a week in the UK and then crossing back to NY and driving home...and only had the single problem with Capital One in France I mentioned before. I do keep my card listed as on vacation but only because I go so often. I live in both UK and US and also have satellite TV in the UK so need to have a way for the programming to get charged and thus always put a note on the calendar as they need a call every 60 days or else you can run into the great security wall. It's a pain BUT considering the savings worth it though aggravating.

    As far as banks, I use Old National (offices in Indiana Illinois Kentucky & Ohio) and they really do care about good customers. I note that I do all my business there --- mortgage, cards, debit, cheques, savings, business banking and they also run my business charge cards which we accept --- and I have never overdrawn nor had any account problems. Their managers do have a lot of latitude and yes they refund it all...last UK trip almost $90. I am sure a lot of banks would do the same were the customer a money-maker at the end of the day but to just open a small account and expect such service likely would get a laugh and not much help. Remember these days every bank looks at the total customer and not just one account. Just choose someone local or regional (where are you?) and avoid the Chase, B of A, etc like the plague. Also, don't forget the health of the bank is a lot to do with it as you can get some help from a healthy bank, but likely laughed at when you try this at one that's on the "troubled" list where they need every penny in fees they can manage!

  6. Ted says:

    YES! Many experiences John...all I do is when I hand over my card say right then "I'm from the States and we do not use chip-and-PIN" which is what the new system is. They always smile, enter it manually and I have never had one problem or rejection. If you don't say it then you might but my partner always forgets and his cards have never been rejected either. I'm not saying at some obscure village in France it won't ever happen, but we have been in UK, Ireland, France and elsewhere int he past 12-18 months several times and never had an issue. By the way they are already seeing that these chip-and-PIN cards in the UK at least can be cloned so they may be phased back out or replaced again...stay tuned as it seems the criminals are often faster than the banks and credit card firms, at least in England from stories in the Financial Times, The Times and on BBC News.

  7. Chris says:

    I just moved to Madrid for three years and trying to get my head around managing finances. I've had to get a Spanish ID and in the process of getting a Spanish bank account. My problem is trying to figure out an elegant solution for transfering US dollars from my account in the US to my bank in Spain and making the conversion to Euros. I would be moving thousands of euros each month to pay house rent, utilities, etc. I am paid by my company for all of this (in dollars) so am left to my own for the problems of converting everything. Would appreciate any advice if someone else has an idea. I've thought about hitting the ATM(cashpoint) each day but I that's just not a practical solution for the amount of money I will need to move.

  8. John Mack says:

    Ted, thanks for the reply. From what I was reading on the Internet it seemed like this was a commonplace problem.

  9. Twelti says:

    I also was charged this rip off fee using my CitiCard with a company in Montreal (I live in the US) for an event in DC. I completed the ransaciton in dc. I am going to cancel this card and get a Schwab Visa. Im fed up with this sort of practice.

  10. Patrick says:

    Upon a transfer to Southeast Asia, my CapitalOne card was being declined regularly. I routinely called them to advise them of my situation, but it didn't seem to work. This became very frustrating especially when I am standing at the counter of a hotel trying to check in, but must call CapitalOne again to straighten it out. One time I even called them immediately before making a large purchase to make sure there wouldn't be an issue. They assured me there wouldn't be a problem. When I went to make the transaction minutes later, CapitalOne declined the transaction. I have written to CapitalOne numerous times without receiving a response. I never carry a balance, pay interest, but enjoy the benefits of travel miles. In the end, the frustration and the added costs of international calls to CapitalOne, it just hasn't been worth having the card. Hope this helps someone else out there.

  11. Katie says:

    I am a full time student with good credit. I have an American Express card which I pay off each month. Capital One declined to issue me a card. I wanted to card so I wouldn't have to pay foreign exchange fees. Capital One is to hard to get. They must be clamping down on people.

  12. Sarah says:

    I recently received a foreign transaction fee with Bank of America visa for purchasing hotel rooms with last minute travel (a US company) because they apparently process their payments in Israel!! I attempted to dispute this charge without any result as it is a fee listed within my terms of agreement. I also looked for the entire last minute travel website and my bill to see if it was anywhere listed that I may incur a foreign transaction fee as their billing department works internationally and that information was no where to be found. SO basically you can use a US company which charges in US dollars and with out knowing it get slapped days later with a 3% fee as that US company processed the claim outside the US. There is no way to truly avoid this fee and no way to dispute it.

  13. Ted says:

    John Mack I strongly disagree.....they do have their quirks with regard to over-security but basically I find the limits (I have had my limit raised several times), the lack of add-on fees etc well worth the effort, frustrating as it sometimes is. Remember that time is money and money is time meaning sometimes you have to spend a bit of time to save cash. If you have cash to spend and don't care then you'd be right, but for those of us with ime to make a call or 3 and stay ahead of the curve, Capital One is a good deal.

  14. Ted says:

    Kevin

    Good points....As far as Capital One I had an issue this week when they knew I was in the UK, but it took one call and they e-mailed an apology and acknowledged that I was there. They also let the charge go thru before I called so I did not have a denial on the spot, just a red flag between they and I the merchant never knew about. I do agree 150% they are w ay way too overzealous on the security crap though.

    As far as Old National, you don't say where in Indiana and their service does vary, but in the central area (Indianapolis, etc) I find them to be delightful, though they entered this area rather late and are very attuned to the boutique bank style and customers using them whereas I am told in the more rural areas they are less-accommodating though I do have some connections if you need and will say what area you are in. They never say no...and only rarely wince when I ask for this or that out-of-the-ordinary thing so they are pretty used to me waltzing in with a pocket full of Euro or Canadian money I need changed but again that's downtown Indianapolis!

  15. RAB says:

    There is a lot of talk in this thread about Visa/Mastercard foreign transaction FEES and additional bank FEES, but does anyone know how the various credit card companies determine the foreign exchange rate to apply to a specific transaction? Do all Visa cards use the same rate regardless what bank issued the card or do the different banks have the option to choose how they calculate the rate? If a bank, like Capital One, can choose how to calculate the exchange rate they apply to a transaction, then they can more than make up for not assessing a forex fee by giving you a less favorable rate. Seems like you need to know the basis for your forex rate to know whether the forex fee really matters or not.

  16. Kevin says:

    Kristy,

    Sorry to hear Chase got you. I experienced the same 3% hit on a trip to Tenerife in the Canary Islands many years ago. That 3% really adds up when you use the card for all your purchases. Never use Chase, BOA, or Amex cards overseas because they charge higher foreign currency conversion fees. If you go to bankrate.com you can get a list of all the banks foreign currency conversion fees. In the end converting cash to the foreign currency you need before you go (at your bank-check the exchange rates ahead of time) and taking the money with you in a money belt is an excellent way to avoid all the fees. I notice while travelling in most countries (Eastern and Southern Europe, Southeast Asia, and Central America) that most locals use cash. I have seen recently more Europeans on the continent use cash (Spain, Portugal) in the last year than ever before, maybe there is something to it. My girlfriend calls it the new renaissance of cash. I know vendors there will haggle more on price if you are paying cash (local currency). This trend is now seeping into our economy. Most of my friends now carry more cash also and use their cards less frequently unless they want the credit float.

  17. Marilyn G. says:

    I'm traveling to Norway from the U.S.in a few weeks. Does anyone have good suggestions about the need to have some Kroner in my pocket before takeoff and about the best way to exchange money there: use American Express Travelers Checks vs ATM withdrawals (debit cards concern me). I'm new at this!

  18. Jeanne Martin says:

    I'm planning a trip to Italy from the U.S. in November. I currently do not own or use any credit cards. Would appreciate any helpfull suggestions on what card would be good to get for this trip. Also, should I exchange US dollars for Euros before I go?

  19. Jim says:

    We were recently in Italy for a few weeks. We could not get a bank to change US dollars to Euros. We checked 3 separate banks and they all told us that you had to have an account with them. They all pointed to either a bank machine or going to an exchange center. The later adds a hefty service fee. The best bet is have debit card that is activated for overseas. Check with your bank for your debit card. We found that gave us the lowest service charge and exchange rate.

    Also get your Euro's in the states. You will get probably the best rate and it will be much easier.

    You will likely need a credit card (most common accepted were MC and Visa). It will be difficult to maintain reservations without giving a major credit card as a guarantee.

    Hope this helps.

  20. Ted Fleischaker says:

    Don't get too many Euro as with the current situation involving Greece about to default this morning's Financial Times implies (on page one of the US edition) if something is not done very soon, the Euro will be history, which is fine with us as we feel it never should have happened. By the way the banks in US also charge to convert US to Euro so THE best deal is to get a few before you go then use an ATM when you travel. Just tell your bank you will be going so they can make sure you don't get a stolen card alert and have a fun trip.

    Oh, and the plural of Euro is Euro... so you will hear as we did recently in Ireland "that will be 45 Euro please..." Makes no sense but it's the facts:) Glad we stick to dollars and pounds!

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