Jan 10, 2023
Fact checked
Written by John S Kiernan
WalletHub Managing Editor
Fact Checked by Alina Comoreanu
WalletHub Senior Researcher
A foreign transaction fee, or international transaction fee, is a 2-4% surcharge that roughly 90% of credit cards tack onto transactions processed outside of the United States. In other words, they’re in play both when you’re traveling abroad and when you’re conducting business with internationally based merchants.
This presents a potentially expensive problem for consumers with international exposure, so to speak, especially since credit cards are by far the cheapest means of currency conversion. The answer, of course, is to make sure you have a no foreign transaction fee credit card in your wallet. Such cards are becoming increasingly common, and two major issuers – Capital One and Discover – have even removed foreign fees from all of their cards.
In order to provide a more complete picture of the foreign transaction fee landscape, WalletHub compared offers from the 10 largest banks and 10 largest credit unions – noting how many no foreign fee cards each has, identifying the best offers of the bunch and more. You can check out our findings in the table below. For more information about what foreign transaction fees are and how they work, see the Foreign Transaction Fee Factoids section that follows.
Opinions and ratings are our own. This content is not provided, commissioned or endorsed by any issuer. WalletHub independently collected information for some of the cards on this page.
Table of Contents
Foreign Transaction Fees by Major BankForeign Transaction Fees by Credit Union
Some of the cards listed on this page originate from our partners, but that did not impact our conclusions. Offers information was collected on Jan 13, 2020 and is likely to have changed since.
Foreign Transaction Fees by Major Bank
| Issuer | Foreign Transaction Fee | Popular No Foreign Fee Offer | International Collect Calls | |
|---|---|---|---|---|
| TOP 11 Issuers | ||||
| American Express | Up to 2.70% | American Express® Gold Card | 1-715-343-7977 | |
| Bank of America | Up to 3.00% | Bank of America® Travel Rewards credit card | 1-757-677-4701 | |
| Capital One | No foreign fees | Capital One VentureOne Rewards Credit Card | 1-804-934-2001 | |
| Chase | Up to 3.00% | Chase Sapphire Preferred® Card | 1-302-594-8200 | |
| Citibank | Up to 3.00% | Citi® / AAdvantage® Platinum Select® World Elite Mastercard® | 1-605-335-2222 | |
| Discover | No foreign fees | Discover it® Miles | 1-801-902-3100 | |
| HSBC | No foreign fees | HSBC Premier World Credit Card | 1-716-841-7212 | |
| PNC | 3.00% | N/A | 1-412-803-7787 | |
| USAA | 1.00% | N/A | 1-800-531-8722 | |
| U.S. Bank | Up to 2.00% | U.S. Bank FlexPerks® Travel Rewards Visa Signature® Card | 1-701-461-0627 | |
| Wells Fargo | Up to 3.00% | Wells Fargo Propel 365 American Express® Card | 1-925-825-7600 | |
| AVERAGE: | 1.50% | N/A | N/A | |
Foreign Transaction Fees by Credit Union
Top 10 Credit Unions
| Issuer | Foreign Transaction Fee | Best No Foreign Fee Offer | International Collect Calls |
|---|---|---|---|
| Alliant Credit Union | 1.00% | N/A | 1-773-462-2000 |
| Boeing Employees Credit Union | No foreign fees | BECU Visa | 1-909-941-1398 |
| Golden 1 Credit Union | 1.00% | N/A | N/A |
| Navy Federal Credit Union | Up to 1.00% | NFCU GO REWARDS | 1-703-255-8837 |
| Pentagon Federal Credit Union | No foreign fees | PenFed Platinum Rewards Visa Signature® Card | 1-402-399-3600 |
| San Diego County Credit Union | 2.00% | N/A | 1-858-453-2112 |
| SchoolsFirst Federal Credit Union | 2.00% | N/A | 1-714-258-4000 |
| Security Service Credit Union | Up to 1.10% | Security Service Power Travel Rewards | N/A |
| Star One Credit Union | No foreign fees | Star One Visa Signature Rewards | 1-408-543-5202 |
| State Employees' Credit Union | 1.00% | N/A | 1-888-732-8562 |
| AVERAGE: | 0.71% | N/A | N/A |
Foreign Transaction Fee Factoids & Forewarning
Like much about credit cards, foreign transaction fees can be confusing. With that in mind, we’ve compiled a quick list of tips and background info to help clarify the situation and enable you to avoid making mistakes.
- A credit card foreign transaction fee is generally the combination of charges assessed by the card network (e.g. Mastercard, VISA) and a fee that your credit card issuer (e.g. Bank of America, Citi) charges on top of that.
- Foreign transaction fees are at the sole discretion of the issuing bank, while the countries in which a card will be accepted depends on the credit card network (i.e. Visa, Mastercard, Discover, Amex).
- Remember, you don’t actually need to leave American soil to be charged a foreign transaction fee. Any time you make a purchase online that is processed through an overseas merchant, you will be charged this fee. If the prices on a website are quoted in a foreign currency, that’s a good indication you are transacting with an international merchant.
- You should also keep an eye out for dynamic currency conversion. This happens when an overseas merchant offers to convert your credit card transaction from the local currency into U.S. dollars. While it may sound tempting to see your transaction in a currency that you are familiar with, you should always refuse this offer. Many merchants will charge exorbitantly high exchange rates, as high as 7%, to do the conversion and pocket the difference as a fee.
- Always call your credit card company before using your credit card to make purchases abroad so they do not become suspicious and suspend your account due to fraud concerns.
Questions & Answers(31 questions)
Editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. Please keep in mind that it is not a financial institution’s responsibility to ensure all posts and questions are answered.In addition, WalletHub independently collected information for some of the cards on this page.
Most Popular
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Upvotes
What does no foreign transaction fee mean?
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7
WalletHub
@WalletHub
No foreign transaction fee means that a credit card or debit card does not include a surcharge for international purchases. In other words, a consumer won't be charged extra for using the card outside of the U.S. Foreign transaction fees are usually charged as a percentage of every transaction made abroad. Most issuers charge around 0%-3%, but many offer at least one card that does not come with a foreign transaction fee. Some issuers, such as Capital One and Discover, do not include the fee on any of their cards. Refer to the card's terms and conditions to know for sure if it comes with a fee for foreign transactions.
It's important to note that you don't have to physically use a card outside of the U.S. to get hit with a foreign transaction fee. The fee can also apply when you buy something online from a company based in another country. So, getting a no foreign transaction fee card can be very helpful if you buy a lot of things from abroad. It also offers consumers the best value for currency exchanges. On average, a no foreign transaction fee credit card saves international travelers 7.14% over the average bank or credit union. When compared to foreign exchange company Travelex, the savings jump to 9.31%.
However, not all credit cards with no foreign transaction fee are equal when it comes to worldwide acceptance. The card's network dictates where you can use it outside the U.S. Cards on the Mastercard networks are accepted by merchants in more than 210 countries and territories, while Visa credit cards are accepted in more than 200. Discover cards work in about 185 countries and territories, and merchants in 160+ countries and territories take American Express cards.
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4
Upvotes
Do foreign transaction fees apply to online purchases?
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4
Yes, foreign transaction fees do apply to online purchases whenever the merchant is based outside the U.S. That goes both for debit cards and credit cards with foreign transaction fees. For example, if you buy something online from a merchant in the U.K. and pay with a card that has a foreign transaction fee, that fee will apply. Foreign transaction fees on credit cards can add as much as 2-4% onto each international purchase you...
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25
Upvotes
How do I avoid foreign transaction fees?
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25
Christie Matherne, Credit Card Writer
@christie_matherne
The best way to avoid foreign transaction fees is to use a debit or credit card that waives foreign fees when you're traveling abroad or making online purchases from international retailers. About 25% of credit card offers don't have foreign transaction fees, so there's no reason to pay the extra charge.
How to avoid foreign transaction fees
- Get a credit card with no foreign transaction fee
- Understand that foreign fees can...
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3
24
Upvotes
What is the best credit card for study abroad?
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24
Joyce Brown, WalletHub Credit Card Analyst
@j.brown
The best credit card for study abroad is the Capital One SavorOne Student Cash Rewards Credit Card (see ) because it has a $0 foreign transaction fee, a $0 annual fee, and good rewards. You'll earn 1 - 8% cash back spent normally, plus an initial bonus of $50 for spending $100 in the first 3 months. You can get approved with limited credit, too.
If you're going to spend most of your time in a foreign country in the near future, you definitely want a card that won't charge you extra on international purchases. But there are actually several options that may work well, depending on your individual needs and wants.
Best Credit Cards for Study Abroad in 2024
Capital One SavorOne Student Cash Rewards Credit Card- Capital One Quicksilver Student Cash Rewards Credit Card
- Petal® 2 Visa® Credit Card
- First Command Bank Classic Visa® Card
- Capital One QuicksilverOne Cash Rewards Credit Card
- Chase Sapphire Preferred® Card
All of these cards are strong contenders to be the best credit card for study abroad. That's especially true considering they offer a lot more than rewards and low fees. You'll also receive perks like travel insurance to give you even more peace of mind when...
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Upvotes
What are the best cash back credit cards with no foreign transaction fee?
Reply
Theresa Chalfant, Writer
@theresa_chalfant
The best cash back credit card with no foreign transaction fee is the Capital One SavorOne Cash Rewards Credit Card (see ), since it offers 1 - 8% cash back on purchases, plus a bonus $200 for spending $500 in the first 3 months. It also offers a $0 annual fee, and an initial APR of 0% for 15 months on purchases and balance transfers.
Best Cash...
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2
Upvotes
What is the best student credit card with no foreign transaction fee?
Reply
2
Chip Lupo, Credit Card Writer
@CLoop
One of the best student credit cards with no foreign transaction fee is the Capital One Quicksilver Student Cash Rewards Credit Card (see ) because it offers a $0 annual fee and 1.5 - 5% cash back on purchases. The Capital One Quicksilver Student Card (see )...
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25
Upvotes
Does my credit card have foreign transaction fees?
Reply
25
Chip Lupo, Credit Card Writer
@CLoop
Your credit card will likely have a foreign transaction fee of around 3% if it is from Chase, PNC, Bank of America, Barclays or U.S. Bank, which charge foreign fees on most (but not all) of their cards. Your credit card will not have a foreign transaction fee if it is from Capital One, Discover, USAA, PenFed or HSBC.
Credit Card Issuers That Do Not Charge Foreign Transaction Fees
- Capital One
- Discover ...
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23
Upvotes
Which bank does not charge foreign exchange fees?
Reply
23
Milvionne Chery Copeland, Writer
@milvionne_copeland
One of the major banks that do not charge a foreign exchange fee on their credit cards and debit cards is Capital One. A foreign exchange fee is typically a 1% fee that is charged when making a purchase while in a foreign country or when doing business with a foreign merchant while in the U.S. You can also incur the fee when you are transferring funds from a U.S. bank to one that's overseas. It...
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5
Upvotes
How do you calculate a foreign transaction fee?
Reply
5
Chip Lupo, Credit Card Writer
@CLoop
To calculate a foreign transaction fee, simply multiply the percentage your credit card charges for the fee by the total of your international purchase. Foreign transaction fees are typically around 3% of each transaction, and that amount is added to your purchase. While 3% may not seem like a huge price to pay, these fees can add up over many transactions, whether you're shopping on foreign soil or through a website based outside of the...
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5
Upvotes
Is no foreign transaction fee worth it?
Reply
5
Chip Lupo, Credit Card Writer
@CLoop
Yes, "no foreign transaction fee" on a credit card or debit card is a worthwhile feature to target if you plan to travel abroad or need to otherwise make purchases from a merchant based in another country. Cards with no foreign transaction fee will save you around 3% on every purchase processed outside of the U.S.
Besides, getting a credit card with no foreign fee doesn't have to cost you anything. Several cards have no annual fee...
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* The information about the following cards has been independently collected by WalletHub: Boeing Employees Credit Union Credit Card, Security Service Power Travel Rewards World Mastercard®, Star One Visa Signature Rewards Card, Citi® / AAdvantage® Platinum Select® World Elite Mastercard®, Navy Federal Credit Union GO REWARDS® Credit Card, U.S. Bank FlexPerks® Travel Rewards Visa Signature® Card, HSBC Premier World Credit Card, PenFed Platinum Rewards Visa Signature® Card, Bank of America® Travel Rewards credit card, Wells Fargo Propel 365 American Express® Card, First Command Bank Classic Visa® Card, Petal® 2 Visa® Credit Card, Capital One Savor Cash Rewards Credit Card, The Bank of Missouri Visa® Signature Card, Citizens Bank Cash Back Plus™ World Mastercard®, and Capital One Spark 2% Cash Plus.
