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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:

    This is very common nowadays and is unless you use one of the few (Capital One and the others people have mentioned here, most of which require HUGE associated accounts) cards without fees this will be happening more and more. I do business with a Chicago based firm, but they use World Pay which one of THE WORST processors anywhere and they are UK-based so when I use the card there I get a fee, well I did till I change the card to Capital One. At any rate in this case, Id suggest you get with your magazine's customer service folks, tell them this fee was unfair and ask for compensation. If I were you and as this is a subscription I'd request an extension free to make up for what you got charged. I own several newspapers and we'd willingly give that in lieu of cash refunds and that makes for happy subscribers. Try that instead of being angry at the PC Tools folks. Oh and get a Capital One card!

  2. Unhappy says:

    I got charged 3% with the foreign exchange fee when I open my citi bank Mastercard. I have no idea what it is until I called them. The lady at Citibank there said, "everyone does it, including my own credit card company." A quick search on the internet reveals that they got sued a few years ago; and that it is not true that "every one does it." Chase Credit card does not have this fee. Another "customer rep" said, "we have to charge you because that is what master card charged us." I asked her how much does master card charge them; she does not seem to know the answer. If I understand correctly, they are not just passing on the expense to the customer but making a little money while doing that too. Pure ripping off.

  3. Ted says:

    Unhappy... I am sad for you but you did not READ what was said here over & over...There IS a fee (usually 1%) which Master Card & Visa DO charge that everyone DOES pay. The different is what the bank charges ON TOP of that. Most are 2-3% additional. Also to correct, Chase DOES have this fee, so whatever made you believe they do not is wrong. They add a fee on top of the 1% just like Citibank does. ONLY Capital One and a few high-priced/high minimum cards skip this fee. The only other way around it is to use a small bank and make prior arrangements and they will (as mine does) refund it to me after I am billed for it, but that's the exception and not the rule! Best of luck, but really, do READ all the small print!

  4. askmrlee says:

    Nancy, Capital One as of today has online applications, but you must "pre-qualify" for a card.

  5. Ted says:

    We have had our Capital One card for years and years as they used to provide private label/branded card services to TJMaxx. When that relationship ended all cardholders in good standing were offered one of their own cards, which he happily took. Getting cash back is even better than certificates for TJMaxx though that programme is back with a different credit card supplier we won't use it because that bank (I forget is it Chase? Its one of the big ones) charges fees which we avoid just charging with Capital One's own card.

  6. Steve Krulick says:

    Capital One DOES charge fees now!

    Warning about Capital One!

    For several years I used my CapOne business Visa card on overseas trips for purchases AND ATM withdrawals. Although there were limits (usually around $400 per transaction, though the limit was never posted, and the machine might not let that larger transaction go through, but wouldn't explain why; in Moscow we had to call CapOne's office from our docked ship to confirm we were not charged when no money came out, but only a "Thank you" from the ATM!), and a cash advance fee, which accrues from the posting date, which ranged from 8-12%, there was no foreign transaction fee, whether Turkey, Peru, Thailand, Russia, Ireland, etc.

    I just got back from India and got my PERSONAL CapOne MASTERCARD statement; I had decided earlier this year to open a personal account for vacations, and so used this card for the first time for overseas purchases and ATM cash. Although the purchases had no fees and no finance charges, to my surprise, there was a $10 fee for the first ATM use, and a bit over $11 for the second! And the finance charge accruing for the averaged balance was at 22% APR, with an actual interest for the period of over 50%!

    I called CapOne (yep, got someone from a boiler room in India), and he explained that there WERE fees for ATM use, but not for purchases. I told him this never happened to me before, and read details from my previous statements. When it was explained that this was my BUSINESS account, he said that older one didn't charge fees, but the new MasterCard personal account did ($10 minimum per transaction, or 3%, whichever was higher), plus the additional finance charge accruing each day, even though I didn't get my statement for weeks afterwards, and wouldn't pay online for another two weeks (THAT alone is going to cost me ANOTHER $9, as the balance accrues each day until then!), so he had to calculate the higher amount, or else I'd get ANOTHER finance charge when I paid the posted balance off!

    As someone who NEVER maintains any CC balance, and ALWAYS pays off every cent each month on ALL my cards, this infuriates me. So, next trip, I will have to use my PERSONAL CapOne card ONLY for item purchases, and my BUSINESS CapOne card for ATM use, even though the finance charge accrual is a HIGHER 24%.

    I think I will pre-schedule an online payment for the amount I plan to exchange, so that it's paid off within a day or two, to minimize the cash advance fee, and then use the internet while traveling to access my account and pay off any further ATM use when it occurs.

    But, of course, if any of this fee stuff was in my agreement, it was surely buried in the finest of fine print and NOBODY ever told me the personal card was different than the business card (unless ALL new cards now have the fee and the old one is just grandfathered to be fee-less).

    If someone else offered a REAL fee-free card that didn't charge mafia-level usurious interest on cash transactions, I'd like to know about it!

  7. Ted says:

    Steve, the answer is what I said here before---get a checking account with a LOCAL bank where you live and establish a relationship. Use your credit card for CREDIT ONLY, as in purchases not to get cash. I can't imagine EVER using my credit card for a cash advances and always plan that way when I travel. I put cash in my checking account before I depart, then use the debit card at the ATMs for cash withdrawals. When I get home, I present the ATM receipts and my banker refunds all of my ATM out of system fees, thus meaning i pay NOTHING int he way of interest for cash advances as I have none. For other purchases, Capital One covers the credit card fees with their "no fee" card. I feel it's all about planning, knowing your bank and using local banks not the "big guys" whenever possible.

  8. American in Austria says:

    Thank you for these info's.
    Unfortunately i just learned it hard way. Longer time ago I was using it in Canada ( NIH Federal Credit Union Platinum Visa ) and was never charged for any purchase. Thinking (and knowing from before) that only charge that you should pay is if you do cash advances anywhere. Credit card companies were selling them self as: "we are the best way to spend money abroad, with best currency rate exchange and no fees ".
    I guess some chage it, and some were always charging.
    Got to worn other students about this too.

  9. askmrlee says:

    Steve,

    What you did is take a CASH ADVANCE from your credit card. Capital One and ALL other banks charge you exorbitant fees for this since you are taking an unsecured LOAN. if you need cash, get it from your checking or savings account with an ATM or debit card. As of this writing, Capital One, Charles Schwab and HSBC Premier do not pass through the foreign transaction fee imposed by MasterCard and Visa associations.

    Yes it is "buried" in your fine print, but it all fees are disclosed in the box that has a summary of charges that is made available to you when you applied for the card. There may have been changes made to you that came in the form of junk mail or cash advance checks that had a note with a change in terms. Lesson: Always open your mail that comes from the bank, even if it looks like junk.

    Here are some other low-fee options.

    Fidelity Investment Rewards American Express Cards issued by FIA Card Services (the former MBNA now part of Bank of America) charges a 1% foreign CURRENCY conversion fee (all transactions not in US$). Plus you can get a 2% cash deposit reward to your Fidelity account (brokerage, cash or retirement) in the form of a $50 deposit for every $2,500 in purchases. There are other rewards available, but this is the more valuable one and has the least hassle since the reward is automatic.

    The Fidelity smart cash account offers a Visa debit card issued by PNC bank which charges 1% for foreign transactions (all non-US transactions either in US$ or foreign currency) no ATM charges and automatic ATM reimbursements.

    I'm sorry you learned the hard way, but we've all been bank sucker punched one way or another. Take this as a learning experience and make yourself a smarter consumer in the future.

  10. David says:

    A previous post on this thread (York, 7.10.09) mentions "one big enough bank in China" that will exchange traveler's cheques to local currency without a fee. Does anyone know which bank this is?

    Thanks!

  11. York says:

    It is Bank of Communication (bankcomm.com). I believe the deal between this bank and AMEX was no transaction fee until sometime like Oct of 2010. Once I was able to find this kind of information on AMEX website. But it was hidden very deep. Good luck with that.

    A side note, China Construction Bank (a even bigger state-owned bank) (ccb.com) has a deal with Bank of America. I confirmed but never tried that no ATM fee will be applied if using BOA debit card to withdraw cache from CCB ATMs. I don't know if the exchange rate will be difference to cover the transaction or they are honestly waive the charges.

  12. Geoffrey Schultz says:

    Another voice on how ludicrous it is that Citi charges 3% on US$ transactions, with companies doing business IN THE USA, but which might also have offices in other countries. I discovered this when my airline tickets from LAN.com, purchased via their USA web site, quoted in US$, ended up getting a 3% charge added onto it because the airline does business in Santiago (and their back-office happened to process the ticket there). I've bought a lot of tickets from LAN - always through their US web site, as it happens to offer a 3% discount for booking online - and this is the first I've had the credit card come in and charge 3%.

    Of course I have a Capital One card and an HSBC Premier card, each of which gives free international transactions, but I thought I was safe using my Citi AAdvantage Mastercard to buy airline tickets in US$. I just went back and audited all my LAN purchases for the last year, and discovered that other bookings through the US web site had been processed in the Netherlands - fortunately I used my American Express card for that one, and although Amex will charge you for a foreign CURRENCY conversion, they certainly don't charge you a fee on a US dollar transaction that just happened to be processed by a global company outside the US.

    I asked the supervisor with Citi if I would be safe using my Citi AAdvantage card to buy American Airlines tickets - they do, after all, have call centers overseas, and when I dial them in the middle of the night, it's usually a non-US operator who answers. She didn't have an answer for me.

    The lesson for me here is I will NEVER use my Citi card for airline tickets, internet purchases, or anything else where the entire physical transaction process is not taking place in front of me at a US point of sale. I'll use my Amex for airline tickets and Internet transactions, and my Capital One and HSBC Premier cards for actual non-US transactions.

  13. Jon says:

    I have a Capital One card.

    The good :
    There's no foreign transaction fee. A review of foreign transactions made in Europe this summer shows that the exchange rates they charged were very close (within 0.5%) of the currency exchange rates on Yahoo finance, so I don't see any gouging by giving a bad exchange rate.

    The bad :
    1. Their fraud detection is a hassle. They call typically twice a month with fraud alerts, even when purchases are inside my normal pattern.
    2. I signed up for automatic statement payment. It just kicked in. As a result, they drew the balance for this month's balance from my checking account twice: once for a payment I made online, and once for the auto payment. They refused to reverse the charge, but will instead mail me a paper check in "up to 30 days" for only the positive balance at the time.

    Summary: Cap One has the lowest cost for foreign charges, but they have a high hassle factor.

    For cash overseas I use my Fidelity ATM. No fees, and they reimburse all ATM charges. Exchange rates are within 1% of the currency exchange rates on Yahoo finance.

  14. Ed D says:

    There was some discussion of cost of bank transfers. I rented an apartment in Rome and had to send x thousand dollars to a Rome bank account from my US TDbank account. Had to go to the bank, help guide them thru the process and got charged $35. The poor recipient had an extra $100 deducted somewhere along the line, too. I've since found XOOM.com, a CA-based company backed by trustworthy investors. You can send up to $3K for $5 dollars. In a test, funds reached the above-mentioned bank in about 36 hours. Give XOOM a try.

  15. jack says:

    Australians Watch out when paying travel companies, who you think are Australain companies but are really only branches of ones that operate overseas. all fares must now be shown in australian dollars and paid in australian dollars but this is the catch -they dont bank it into an australian bank account but send directly it to their overseas bank - no mention is made of this on their web sites - your credit card provider charges you 3% overseas transaction costs . several cruise companies in australia do this, particularly ones that are US or British based companies

  16. CM Curry says:

    American Express has a foreign transaction fee of 2.7% and is accepted in quite a few places here in Germany.

  17. askmrlee says:

    Fidelity mySmart Cash account/ATM/Visa Debit card is issued by PNC Bank and it charges 1% on foreign transactions. This 1% is included in the exchange rate, so appears that there is no fee, but it's there.

    I learned the hard way from my Fidelity Rewards Amex (issued by FIA Card Services) that even though I called ahead to tell them I was overseas, my $1700 hotel charge was denied because they shut down my card. Of course, they mailed me a letter to my house which served as notice. AARGH. They said it was because it was a new account. I say it was a mis-communication and break down in their system. My smaller purchases prior to the large charge did not have this problem (all under $100). The advice they gave me was to call for pre-approval. WHAT?!? However, I will do so in the future to avoid hassles.

  18. Ted says:

    Oh if you buy enough, often enough or travel often enough it's WAY worth it. One $20 transaction maybe not but $1200 in hotel rooms in the UK and you'd change that tune really fast!

  19. John Mack says:

    I also found Capitalone's Fraud Dept (this is the dept you have to contact to resolve restrictions on your account) to have a rather flippant attitude towards their customers. Their attitude is kind of like, "Hey, we don't care what happened to your account. It's your problem, not ours."

  20. Jean says:

    Does anyone have any info on which bank would be best for atm withdrawals? I live overseas, and I'd like to gvoid atm and foreign fees, and get a good currency conversion rate. Citibank charges 3% on every withdrawal, and I'm leaning toward switching to a Capital One bank account, but if the atm card is as much hassle as the credit card appears to be, it might not be worth the effort.

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