Rebecca Safier, CCC, is a personal finance writer. Her work has been published in U.S. News & World Report, MarketWatch, NextAdvisor, Yahoo Finance, and other publications, and she has contributed expert commentary to Entrepreneur, Money.com, NBC, and more. When she's not covering all things personal finance, Rebecca teaches blogging strategies on her website, Remote Bliss.
Key takeaways
Foreign transaction fees are charges of 1% to 3% that are incurred when you use your credit or debit card outside the U.S. or shop with international merchants.
These fees can hit you during international travel or when shopping online from foreign websites.
You can avoid foreign transaction fees by using a card that doesn't charge them, like the Chime Visa® Debit Card.1
Seeing a foreign transaction fee on your credit card or bank statement after a trip can be frustrating. If you're planning international travel or like to shop online from foreign merchants, understanding these fees can help you avoid surprise charges and keep more money in your pocket.
What is a foreign transaction fee?
A foreign transaction fee is a charge, typically 1% to 3% of your purchase, that some credit card companies and financial institutions add when you use your credit or debit card outside the U.S. or with international merchants.
When you use ATMs abroad, you might face multiple charges beyond the foreign transaction fee, including out-of-network costs from your financial institution and usage surcharges from the ATM owner.
You can also get hit with foreign transaction fees without leaving home. If you buy clothes from a South Korean website and the merchant processes your payment in won, for example, your financial institution may charge a fee to convert the currency.
How foreign transaction fees work
Foreign transaction fees typically have two parts:
Network fee: A small percentage, usually 1%, goes to the credit card network like Visa or Mastercard for processing.
Issuer fee: Your financial institution adds its own charge, often 1% to 2%, to handle the transaction.
Every international transaction needs currency conversion from the foreign currency to U.S. dollars. Even if a website is in English, the merchant might be overseas, which can trigger these fees.
How to calculate a foreign transaction fee
Most cards charge foreign transaction fees between 1% and 3% of your transaction amount. To calculate what you'll pay, multiply your purchase amount by the fee percentage.
Example: A $1,000 purchase with a 3% fee costs an extra $30 – calculated as $1,000 x 0.03 = $30 – bringing your total cost to $1,030.
How to find foreign transaction fees
There are two main places where you can find your card's foreign transaction fees:
Your cardholder agreement, which may be a paper or digital copy
The card issuer's website under terms and conditions or fee schedule
Look for foreign transaction fees in the same section as annual fees and other charges. If you can't find it, call your card issuer's customer service line and ask directly.
How to avoid foreign transaction fees
It may be possible to avoid foreign transaction fees completely. Here are a few ways:
Get a card with no foreign transaction fees. This is the easiest solution. Cards like the Chime Visa® Debit Card and Chime Card don't charge foreign transaction fees at all.
Pay with cash. You can avoid credit card fees entirely by using local currency during your travels, though you may still incur a fee at the ATM (and this approach won't work for online shopping). Try saving up in a high-yield savings account before your trip.
Use fee-free ATMs. Look for fee-free ATMs where you can withdraw local currency. You can also check if your financial institution refunds foreign ATM fees.
Choose local currency when paying abroad
When the payment terminal asks if you want to pay in U.S. dollars or local currency, it's usually best to pick the local currency. Choosing U.S. dollars triggers Dynamic Currency Conversion, where the merchant may set a worse exchange rate, causing you to pay even more.
Cardmembers earn 5% cash back in selected categories each quarter, up to the first $1,500 in purchases, and 1% unlimited cash back on everything else.
Everyday spenders who want a higher cash back rewards rate with no annual fee.
Foreign transaction fees don't have to dampen your travel plans
International travel shouldn't come with surprise fees. With the right card and payment strategies, you can explore the world without worrying about extra charges eating into your budget.
Want to see how others travel smart? Chime member Andre shares his tips for budgeting international trips and avoiding foreign transaction fees.
Frequently asked questions about foreign transaction fees
Is 3% a high foreign transaction fee?
Yes, 3% is on the higher end since most foreign transaction fees range from 1% to 3%. On a $2,000 trip, a 3% fee costs you an extra $60.
Do debit cards charge foreign transaction fees?
Yes, many debit cards charge foreign transaction fees just like credit cards. Check your account terms before traveling, or use a card like the Chime Visa® Debit Card that doesn't charge these fees.
What's the difference between foreign transaction fees and currency conversion fees?
A currency conversion fee covers changing your dollars to another currency, while a foreign transaction charge is a surcharge for processing through a foreign bank.
Can I use my credit card internationally?
Many credit cards work internationally, including Visa and Mastercard cards. Notify your card issuer before traveling to prevent fraud alerts, and confirm whether or not your card charges foreign transaction fees.
Do I get charged foreign transaction fees for online purchases?
If the merchant is located outside the U.S., you could be charged a foreign transaction fee even when shopping from home. Check the merchant's location before completing your purchase.
Chime® is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.
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