Guides

Foreign transaction fees: Everything you need to know

Madison BlancaflorManaging editor
Madison Blancaflor is the managing editor for TPG's content operations team. She focuses on helping TPG's broader editorial team bring news, features and advice to readers. She has nearly six years of experience covering the credit cards and travel industries.

June 3, 2025 • 7 min read

The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.

Editorial note: This is a recurring post, regularly updated with new information and offers. 

Quick summary

Foreign transaction fees are typically charged when purchases are processed through overseas banks or on foreign websites, with rates commonly around 3%.
Most top travel rewards cards do not charge foreign transaction fees, but some popular cash-back cards still do.
Foreign ATM fees are separate from foreign transaction fees and can include multiple charges, such as network and conversion fees.
Paying in local currency instead of U.S. dollars when abroad helps avoid poor conversion rates due to dynamic currency conversion.

What to consider

Foreign transaction fees are usually disclosed in the card's terms and conditions, often listed in a dedicated fees section.
Some cards and accounts offer ATM fee reimbursements for international withdrawals, which can help reduce overall travel costs.
Dynamic currency conversion can result in unfavorable exchange rates, so opting for local currency is recommended.

What you'll miss from the article

A detailed breakdown of how to identify and avoid both foreign transaction and ATM fees, plus practical tips for minimizing extra costs while traveling.

Generated by AI with support from our editorial team.

At TPG, few things frustrate us more than unnecessary fees — and foreign transaction fees are near the top of the list.

You may have noticed that when you use certain credit cards abroad (or on a website not hosted in the U.S.), an additional fee is added to each purchase.

Let’s discuss what those fees are and how you can avoid them in the future.

What is a foreign transaction fee?

Foreign transaction fees are charged on certain cards when you make a purchase that goes through an overseas bank to process the transaction.

When you make a purchase while traveling or through a foreign website, banks may convert the transaction amount into U.S. dollars — often with a markup. Some credit card issuers then pass this conversion cost on to consumers as a foreign transaction fee.

How much are foreign transaction fees?

The standard foreign transaction fee tends to be around 3%.

Visa and Mastercard typically charge a 1% processing fee and many U.S. banks tack on an additional 1%-2% fee.

However, Capital One and Discover are unique in having zero foreign transaction fees across all their credit cards.

Card issuer	Standard foreign transaction fee
American Express	2.7%
Bank of America	3%
Barclays	3%
Capital One	None
Chase	3%
Citi	3%
Discover	None
U.S. Bank	3%
Wells Fargo	3%

Which cards have no foreign transaction fees?

Most of the top travel rewards credit cards don’t charge foreign transaction fees. In fact, it’s rare for a card that offers travel rewards and perks to charge any foreign transaction fees. After all, it would be counterintuitive for a card marketed for travel to charge a fee on international purchases.

While some issuers charge foreign transaction fees of around 3% on some of their products, you should consider Capital One or Discover cards, since they don’t charge foreign transaction fees on any of their cards.

purchasing metro ticket — MILAN MARKOVIC/GETTY IMAGES

Card issuers are required to give potential and existing customers access to rates and fees associated with a credit card, including foreign transaction fees. Check the terms and conditions of your credit card to see whether or not your card (or the card you’re considering applying for) charges foreign transaction fees.

A rates and fees table typically lists the foreign transaction fee explicitly under a fees section.

Foreign transaction fees vs. ATM fees

Another type of fee you may hear about when you travel is a foreign ATM fee. While the two fees can apply when traveling outside the U.S., they are not the same.

A foreign ATM fee is charged when you withdraw cash from an ATM in a foreign country. Some banks waive this fee, especially if you use an ATM that falls within a specific network of banks.

man at ATM — VERA ARSIC/EYEEM/GETTY IMAGES

Additionally, you might need to pay additional fees when you use an ATM abroad, including a flat fee from your bank for using an ATM not affiliated with the bank (typically $5), a foreign currency conversion fee (typically falls in line with foreign transaction fees at 3%) and additional fees charged by the owner of the specific ATM you use. As you can probably tell, multiple withdrawals during a trip can easily add up.

This is one reason we recommend paying with a credit card wherever possible. But in some places, cash is still king, and you’ll need to have a game plan for avoiding these types of fees — or factor them into your budget.

TPG credit card writer Danyal Ahmed recommends a Schwab Bank High Yield Investor Checking account, which offers unlimited ATM fee reimbursements for domestic and international withdrawals.

How to avoid foreign transaction fees

Use a card with no foreign transaction fees

The easiest way to avoid foreign transaction fees is to use a card that doesn’t charge them. TPG has a regularly updated guide on the top credit cards with no foreign transaction fees that can help you choose the best cards for your trips.

Young woman traveler with sky blue backpack and hat looking the map with train background at train station Bangkok. Traveling in Bangkok Thailand. Travel concept — DIVERSITY STUDIO/GETTY IMAGES

However, some popular cash-back cards, such as the Chase Freedom Unlimited® (see ) and the Blue Cash Preferred® Card from American Express (see ), tend to charge foreign transaction fees.

Avoid ‘dynamic currency conversion’

When using a card terminal abroad, you may be prompted to pay in the local currency or in U.S. dollars. You should always choose the local currency.

Woman at the airport — SDI PRODUCTIONS/GETTY IMAGES

Dynamic currency conversion is a sneaky way that banks encourage you to pay in your home currency (U.S. dollars) while abroad. However, they’ll usually give you a poor conversion rate, so it’s best to pay in euros, pesos or whatever the local currency is.

Pay with cash

Of course, you’ll also avoid foreign transaction fees by paying with cash.

Hands putting money into a wallet — GRACE CARY/GETTY IMAGES

However, cash purchases will not earn you rewards, and withdrawing cash abroad may be subject to pesky fees.

Bottom line

The good news is that foreign transaction fees are much less common across top credit cards than they used to be. It seems the industry is gradually moving away from charging customers these types of fees.

Until then, check your credit card’s terms and conditions to know if you’ll be on the hook for a fee when you’re traveling — and plan your card usage accordingly.

To avoid foreign transaction fees, choose a top travel rewards card or any card from Capital One or Discover. Also, always pay in the local currency with your credit card rather than U.S. dollars to avoid poor conversion rates.

For rates and fees of the Amex Blue Cash Preferred, click .

Editorial disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Great offers from our partners

See current offers Find your best card with CardMatch™

TPG featured card

American Express® Gold Card

TPG editor's rating

Pros + cons

Pros

Valuable dining and food-related credits
Flexible rewards with airline and hotel transfer partners
Multiple travel and purchase protections
No foreign transaction fees
Access to Amex Offers for additional savings (enrollment required)

Cons

Not as useful for those living outside the U.S.
Some may have trouble using Uber and other dining credits

More details

You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App™.
Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App™, or purchased directly from airlines.
Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App™ and cruises booked and paid through AmexTravel.com.
Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
$120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
$100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
$84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
$120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
Enjoy complimentary Hertz Five Star® Status benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
Book two nights or more with The Hotel Collection through AmexTravel.com or the Amex Travel App™ and receive a $100* credit towards eligible charges at over 1,400 upscale hotels worldwide. *Eligible charges vary by property.
Book your travel through the Amex Travel App™ with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
No Foreign Transaction Fees.
Annual Fee is $325.
Terms Apply.