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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. Sheryl says:

    I have just found out that Citibank has now started charging the same 3% Foreign Transaction Fees even if the transaction is in US Dollars and there is no conversion necessary. As long as it is out of the country the fee is charged. I too am going to check into your Capital One suggestion!

  2. askmrlee says:

    Anyone have experience with the ETrade Bank Platinum Visa? it appears to have no foreign currency fee.

    The posting date is done by the bank after the merchant submits your transaction. Even though there may be an electronic authorization, the transaction is not complete until the merchant sends in the information. Just like in the US there could be a 2 to 3 day delay with posting, it can be even longer overseas.

  3. RAUL says:

    After many years of charging to my Adavantage Mastercard credit card in US Dollars with no charges of foreign curreny; now I got hit with this fee. I use it in Panama where all transactions are done in US dollars.
    I try Captial One.
    Don't they make enough with the interest they charge?

  4. Rich says:

    I have been a Citibank Premier Pass card holder for a long time. I bought/paid stuff online and it so happens the company is based outside the US, even though the amount I paid in US Dollar, they still charged the 3% Foreign Transaction Fee. (Example: Hostels.com is based in Dublin, Ireland even though you are paying US Dollar in their deposit.) I called Citi, argued with them, but to no avail. I emailed these companies as well (like Hostels.com) to inform them but to them it��s my issue with the Credit Card and I should use another campany.

    Im pissed and made my research and found this article. Thank you, I said!

    So I got a Capital One and recently bought a flight from Dublin to Liverpool through RyanAir and it cost 13.70Euros. In my Cap1 statement, it came out as $19.52. This transaction was on 4/8/09.

    Today is 4/14/09 and the exchange rate from xe.com is: 1 EUR = 1.32777 USD or 1 USD = 0.753141 EUR.

    Just to get an idea:

    If you simply get the Euro rate from 13.70Euros to $19.52, that ����s 1 EUR = 1.42 USD or 1 US = 0.70 EUR. This is a terrible rate!!

    If you simply convert 13.70Euros using the rate on 4/14/09, it's $18.19. That's a difference of $1.33 from the $19.52 Capital One charged me!

    If you only apply the 3% Foreign Transaction Fee from, say, what Citibank charges, to the $18.19, that's only 0.54 cents, NOT $1.33!

    Yes, in my experience with Citibank ����s Premier Pass, their Foreign Exchange conversion rate is usually very close to whatever is the market rate. Also the same with American Express.

    I called Capital One to ask what was the Euro amount that came in for this transaction. I wanted to see that maybe RyanAir charged me more than what I had in my receipt from them. But Cap1 could not provide this to me. They say, they only get the $ amount from MasterCard. Ive had American Express, Discover, Bank One, Chase, and Citibank Credit Cards in my adult life. The foreign amount is always there in my statement as well as the US Dollar amount. Cap1 gave me the MasterCard number to ask them.

    I called MasterCard and the best that they can do is provide me the rate on that transaction date (4/8 as I mentioned above). And they said, its 1 US = 0.75 EUR. This rate is very close to the rate I got today as mentioned above.

    I dont know, something is wrong here. Until they can provide answers to me, Id rather use my Citibank Premier Pass despite the 3% fee.

  5. Rich says:

    A follow up to my above post. I recently used my Citi Premier Pass to book a hostel in Liverpool. The deposit is 8.40Pounds. It came out as $12.47 in the Citi PP statement. That's pretty good for it is very close to market rate. This transaction was done on 4/14. Today 4/16, xe.com's rate is 1 GBP = 1.49243 USD or 1 USD = 0.670050 GBP. If you apply this to the 8.40Pounds, it's about $12.54.

    I'm planning to use Cap1 again for some small amount to have another example and let you know what happens. But I dunno fellow consumers, I was turned off by the 3% fee at first. But if Capital One (or Mastercard for the matter) is using crappy conversion rates, I'd rather use the card that uses rates close to market rate even if it charges the 3%.

    Something to think about. Thanks all.

  6. Diana says:

    Beware of CitiCard incurring 3% Foriegn Transaction Fees on ANY business conducted with a foreign country while still in the USA. I am currently disputing this fee added to my air travel booked with British Air online. My financial transaction was in USD at a NYC office.
    Upon query, 2 Account Managers have interpreted their terms to include charging this fee for "any business WITH" a company OUTSIDE of the USA, even if no conversion of funds occurred. I am pending receipt oftheir documentation and published definition.

  7. VentureShadow says:

    State Farm Bank (part of State Farm Insurance Co) charges 1% on foreign currency transactions and gives you a 1% credit towards the cost of a state farm insurance policy, or they will give you the money back if you have a bank account with them. They issue the rebate only after it exceeds $50.

    I have used them. They are a very considerate company. So far whenever there has been a dispute they take my side; Chase and Capital One always took the merchants' side. I can (and do) choose to have State Farm automatically pay their credit card bill from my checking account at a local bank (not State Farm bank).

  8. Jamar says:

    I've been using Discover up to now in China because it's accepted just about everywhere, but now that they're introducing that 2% fee looks like I'll have to look at something else. That Visa card sounds nice, but then acceptance isn't nearly as wide as with Discover.

  9. ed says:

    Citi will charge 3% for US$ purchases made online to a non-US company. But even more amazing is that when I bought airplane tickets in US $ from a US company (Orbitz.com) online the foreign transaction fee was added by Citi because the airline was foreign!!!

    What's next, will we be paying a foreign transaction fee to buy gasoline that comes from Saudi Arabia at the corner gas station?

  10. Dack says:

    I was charged this rip off fee using my CitiCard with a company in Montreal (I live in the US). I am going to cancel this card and get a Schwab Visa. I'm fed up with this sort of practice.

  11. bob says:

    the schwab visa is great - their currency rate is very close to the actual market, and there's no international fee. but in the chart where it says american express is 'not generally accepted overseas' is way off - it's widely accepted

  12. Jamie says:

    I just called American Express and they said the international fee is 2.7%. Is there any card that doesn't charge a fee?

  13. Thrifty Expat says:

    Jamie - Try Capital one and Charles Schwab Bank Visa. They both are the best bets on the market right now. Charles Schwab has the best deal for people who spend a lot outside their country.

  14. Arnold says:

    So, I guess it's a consensus that the best international credit card for making purchases overseas without having to pay foreign currency transaction finance charges is - any Capital One credit card or the new Charles Schwab rewards card right? Might have to look into one of these options

    Discover Card, while pretty popular in China as I've heard before, is not really widely used and definitely not as widely accepted outside of the United States, making its international credit card usability somewhat limited. Sure, while Discover continues to make major inroads into places like China where the company has recently signed a partnership deal with China's largest credit card network, China Union Pay to accept the Discover Card, the 0% fee offer alone for foreign currency purchases doesn't make it all that attractive...

    But these 3% foreign money purchases are just outrageous - 3% of the total credit card purchase cost - are you freakin kidding me! That is ridiculous. I found out the hard way when I returned home from my spring trip to Europe and saw the surprising and shocking finance charges on my Bank of America card. Calls to the BoA customer service reps went ignored and I was stuck having to pay the charges - per my customer application agreement as the lovely people at Bank of America put it. Grr!

    Any idea if the new federal credit card rules or credit card consumer Bill of Rights law that President Obama and congress just passed covers these foreign currency credit card transactions? Do they do away with them or limit how much foreign fees the card issuers can sneak on cardholders?

  15. jeff fargo says:

    just found out that discover is now charging 2% foreign currency transaction fee.

  16. Richard says:

    Commerce Bank (Cherry Hill, NJ) VISA, for years, had NO fee for foreign transactions. They stated euros and dollars on every statement.

    Just received a letter saying (eff. 6/09) they are converting my Commerce Bank Platinum VISA to a TD East Rewards VISA. (TD Bank bought out Commerce some months ago.) This was touted as a much better credit card for me. Here's how it's better: Purchases interest rate goes from 7.24% to 14.24% and Cash Advance rate goes from 11.24% to 23.24%. Plus the Foreign Transaction Fee goes from 0% to 3%. Can you spell GREEDY? Shame on TD. I'm not agreeing to these "usery" terms and TD will also see me close my large TD Ameritrade Account too.

    Maybe Charles Schwab has a good thing. Who knows if you can you have a Schwab Bank VISA without having a Schwab trading account?

  17. Wanderluster says:

    If you want the best credit cards for zero or low foreign exchange fees, this is where I got my info. It's got details about foreign currency fees as they related to credit, debit transactions, and even foreign ATM transactions.

    Just a friendly reminder, Discover has sent out a mailer updating their foreign currency transaction fee & finance charge for their credit cards from 0% to 2% starting June 2009.

    Credit unions are great - PenFed, AFCU, and the NASA FCU - 1% fees, although qualification is not always easy as they have limited membership into their credit unions.

    Another interesting set of cards that offer low 1% foreign fee finance charges are department store retail cards like the Nordstrom credit card and the Macy's/Bloomingdale's Card. But I personally definitely would not apply for a store card just for this rate...and it's even not all that great considering there are 0% cards out there in terms of the foreign currency fee percentage.

  18. Abdullah says:

    Anyone has info on foreign transaction fees being waived at least in Canada?
    I spoke to a rep from Bank of America who told me that I can withdraw cash from Scotia Bank in Canada without being charged and non-BOA ATM fee ($2).

    Is my best bet just to withdraw some cash and avoid credit cards altogether?
    Thanks in advance.

  19. Dick Flanagan says:

    The US federal credit card legislation curbs interest rates, not fees.

    This may not help a lot of people, but BofA just verified for me that they will not be charging foreign transaction fees for foreign purchases made from the USA and paid in US dollars *IF* you use one of their *DEBIT* cards. This isn't terribly helpful for a lot of people, but it might help a few.

  20. John says:

    Ok I got hit with the foreign purchase fee like a lot of people. Now I would like to change to another card. The problem is I am living in Panama and do not have a U.S. address, or utility bill etc. like some cards requiere. I could apply for one here in Panama through HSBC but they require you to open up asavings account and keep a balance of 120% of the credit limit. Naw I don't think so..... Any thought on how to get a Card when living out of country?

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