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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. Mike Marvin says:

    Thank you for your post. I have been using the wrong Visa card when I have a Capital One Visa card on my wallet. I have been charged 3% for all transactions...From now on Capital One is the one I will be using

  2. Raymond says:

    No problem Mike. These credit card companies definitely don't do a good enough job of advertising these foreign transaction fees. But then again, why would they want to spoil a good thing for them...

  3. Kelly says:

    Discover has struck a deal with UnionPay, a Chinese credit card, so that Discover is accepted all over China. It is actually now more widely accepted than Visa or MasterCard. I know this because I am on a month-long trip to China and Hong Kong and researched what card to use before I left. Sometimes the merchant might not know what to do with the card, but you just need to tell them it is a UnionPay card.

  4. Ken says:

    Anyone have luck negotiating with their credit card company to temporarily wave the foreign transaction fee?

  5. Jill says:

    I tell my overseas visitors to New Zealand about this all the time and they often look at me like I'm crazy. "Our credit cards are an extension of us. Surely they wouldn't bite us!" I've linked to you in some travel tips I've posted and hope your info will bring clarity, or at least stimulate good questions before people buy up large.

    Jill

  6. PG says:

    The CapitalOne card seems like a good deal, but they refused to honor a charge I made to buy airline tickets, and by the time I had straightened it out I had to pay an additional $500 because the prices went up at the end of the week. Unlike many other cards, CapitalOne does not tell you when it is going to refuse a charge (for example, Bank of America will take the charge and then call you), so even if you tell them ahead of time they can decide to leave you stranded. As a result, I may pay a higher fee, but at least my card works.

  7. JA says:

    CapitalOne is also extremely slow in posting large transactions, which means you can be left with no available credit for weeks while traveling. I recently had an $8k hotel bill for a large business group I was traveling with. When I paid the hotel CapitalOne immediately reduced my available credit by the $8k, but I couldn't pay my credit card bill until this finally showed up on my account a week later. Then, when I immediately paid the bill off in full on-line, fraud put a 2 week hold on my payment because it was too large. End result, for 3 weeks I couldn't use my card while traveling, even though I had previously set aside enough money to pay off my full credit card balance immediately. Not a good solution when you're overseas and you need a card you can rely on! I'd rather pay the fees and have a functional card.

  8. jim says:

    I have made severla purchased from "overseas" retailers over the years. On a recent purchase I noticed the next month a finance charge. Since I pay my CC payment each month in full I called BOA. They stated FTF are billed as advanced cash billing and that the interest is compounding. I told them that was crazy and cancel my card. They agreed to waiver this fee. Next month if there is a fee this card is bye bye......any suggestions for a CC that will not do this????

  9. Russ says:

    The answer would be to eliminate Credit Cards altogether. We all carry a cell phone so using the WAP portion - we can do the transaction less than the CC charges. Since it is PIN driven no lost ID or CC fraud. It's great for the merchant since the transaction would no be subject to charge-backs.

  10. Sal says:

    We travel a lot and have been using CapitalOne for the last few years, after being burned with high overseas transaction fees on our regular Visa (MBNA/Bank of America). CapitalOne has been driving us crazy with unannounced blocks on any transactions with an overseas business, even though we go out of our way to notify them in advance. Each time we call them and wind up talking to several different people before the problem is corrected. Sometimes we think the problem was corrected and find out later that it wasn't. We are now looking for an alternative solution, because CapitalOne's practices are out of control and too much to put up with.

  11. Dylan in Warsaw says:

    Capital one seems like a great deal - and I got their Platinum Cash Card for the specific reason that they said they did not charge a foreign currency transaction fee. But then when I started to make charges overseas, I saw that the amount actually charged is approximately 1% higher than the published rate in the WSJ.

    What's with the discrepancy? The answer is buried in their legal conditions and terms: For international transactions, MasterCard ����s currency conversion procedure includes use of either a government mandated exchange rate, or a wholesale exchange rate selected by MasterCard for the processing cycle in which the transaction is processed, increased by an adjustment factor established from time to time by MasterCard. The currency conversion rate used by MasterCard on the processing date may differ from the rate that would have been used on the purchase date or cardholder statement posting date. ��

    Best I can tell is that they use the adjustment factor as a type of foreign currency transaction fee. If not - what's with the discrepancy?

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