International fees are charges your card issuer adds when you use your card outside the United States
When you swipe a credit card in another country or buy something online from a foreign merchant, your bank charges you a fee on top of the purchase price. This is called a foreign transaction fee, and it typically runs between 1% and 3% of what you spent. A $100 purchase abroad might cost you $101 to $103 after the fee is added.
Not every card charges this fee — some cards marketed to frequent travelers waive it entirely. But most standard cards do charge it, and the fee appears on your statement weeks later, so many people don't notice it until they review their bill. The fee is separate from currency conversion, which is a different cost that happens automatically whenever you spend money in a currency other than dollars.
Key Takeaways
- Foreign transaction fees typically range from 1% to 3% of your purchase and are charged by your card issuer, not the merchant or the country you're visiting.
- Premium travel cards and some no-annual-fee cards waive foreign transaction fees, but you need to check your specific card's terms to know whether yours does.
- Currency conversion happens automatically and separately from the foreign transaction fee — you pay both when you use your card abroad.
- ATM withdrawals in foreign countries often carry higher fees than purchases, sometimes 2% to 3% plus an additional flat fee from the ATM operator.
- Checking your card's benefits guide or calling your issuer before you travel takes five minutes and can save you hundreds of dollars on a two-week trip.
How foreign transaction fees are calculated and charged
Your card issuer charges the foreign transaction fee as a percentage of the dollar amount you spent. If your card has a 2% foreign transaction fee and you spend 50 euros at a restaurant, the bank first converts those euros to dollars at the current exchange rate, then adds 2% of that dollar amount as a fee. The total appears on your statement in dollars.
The fee is charged every single time you use the card outside the United States, whether you're buying a coffee, paying for a hotel, or withdrawing cash from an ATM. Some cards charge the same percentage for all three; others charge a higher percentage for ATM withdrawals. A few cards charge a flat fee per transaction in addition to the percentage — for example, 1% plus $1 per transaction.
You don't pay this fee to the merchant or the country you're visiting. You pay it to your card issuer — the bank or credit card company that issued your card. The merchant has no control over it and doesn't see it. It's purely a charge from your bank for processing a transaction in a foreign currency.
Which cards waive foreign transaction fees and which ones don't
Premium travel credit cards almost always waive foreign transaction fees. Cards marketed as travel rewards cards — especially those with annual fees of $95 or higher — typically include this benefit. Examples include cards from major issuers like Chase, American Express, and Capital One that are specifically branded for travel. You can find this information in the card's benefits guide, which is available on the issuer's website or by calling the customer service number on the back of your card.
Many no-annual-fee cards do not waive foreign transaction fees. Standard cash-back cards and basic rewards cards from most issuers charge the full 1% to 3%. However, some no-annual-fee cards do waive the fee — this varies by issuer and card type, so you cannot assume based on price alone.
The only way to know for certain is to check your card's terms. Log into your online account, look for a "benefits guide" or "terms and conditions" document, and search for the words "foreign transaction" or "international." If you can't find it online, call the number on the back of your card and ask directly. Write down the answer so you have it before you travel.
Currency conversion and how it differs from the foreign transaction fee
Currency conversion is the process of turning foreign money into dollars. It happens automatically whenever you use your card abroad, and it uses an exchange rate. Your card issuer sets this exchange rate, and it is usually close to — but not exactly the same as — the rate you see on financial websites. The difference between the official rate and the rate your bank uses is called the markup, and it is how the bank makes money on currency conversion.
This markup is separate from the foreign transaction fee. You pay both. For example, if you spend 100 euros and your card has a 2% foreign transaction fee, the bank converts the euros to dollars using its exchange rate (which includes a small markup), then adds the 2% fee on top of that converted amount. The total cost to you is the markup plus the fee.
You cannot avoid currency conversion — it happens automatically. But you can avoid the foreign transaction fee by using a card that waives it. Some travelers also use a debit card from a bank that doesn't charge foreign transaction fees, or they withdraw cash from an ATM before traveling and use local currency instead of the card.
ATM withdrawals abroad and why they cost more
Withdrawing cash from an ATM in another country is usually more expensive than making a purchase with your card. Most card issuers charge a foreign transaction fee on ATM withdrawals just like they do on purchases — typically 1% to 3%. But many ATMs also charge their own fee, which is a flat amount (often $2 to $5) charged by the ATM operator or the bank that owns the machine. You pay both fees.
Some ATMs show you the fee before you complete the withdrawal and give you the option to cancel. If you see a fee of $5 or more, it's usually worth walking to a different ATM or a bank branch to avoid it. If your card issuer waives foreign transaction fees, you still pay the ATM operator's fee, but you avoid the issuer's percentage charge.
A few banks offer checking or savings accounts with debit cards that waive ATM fees worldwide, even fees charged by the ATM operator. These accounts are less common but do exist. If you travel frequently or plan a long trip, it's worth asking your bank whether they offer this benefit.
Strategies to reduce what you pay in international fees
The simplest strategy is to use a credit card that waives foreign transaction fees. If you travel even once a year, a travel card with a $95 annual fee can pay for itself in savings. Calculate it: a two-week trip with $3,000 in spending would cost you $60 to $90 in foreign transaction fees on a standard card (2% to 3%). A travel card with a $95 annual fee saves you money if you travel more than once per year or spend more than $3,000 to $5,000 abroad per year.
If you don't travel often enough to justify a premium card, use a no-annual-fee card that waives foreign transaction fees if you have one. If you don't have one, consider opening one before your trip — many issuers approve applications within days. You can then use that card for your trip and keep it in a drawer for future travel.
Another strategy is to withdraw cash before you travel and use local currency for most purchases. This avoids the foreign transaction fee on small purchases, though you still pay the ATM fee once. This works well if you're visiting one country for a week or more, but it's less practical for short trips or multiple countries.
Avoid using your card for ATM withdrawals if possible. If you must withdraw cash, use ATMs at banks rather than standalone machines, as bank ATMs often charge lower fees. And always decline the ATM's offer to convert the withdrawal into dollars at the ATM's exchange rate — this markup is usually much worse than your card issuer's rate.
What to check before you travel
Before any trip outside the United States, spend five minutes checking three things. First, confirm whether your card charges a foreign transaction fee and what the percentage is. Second, check whether your card issuer charges any additional fees for international travel — some cards charge a fee just for using the card abroad, separate from the transaction fee. Third, make a note of your card issuer's customer service number and any international customer service number listed on the back of your card, in case you need to report fraud or ask questions while you're away.
If your card charges a foreign transaction fee and you're traveling for more than a week or spending more than $2,000, consider whether it makes sense to open a travel card before you go. Most issuers have online applications that take 10 minutes, and many approve you within 24 hours. You can request expedited shipping of the physical card, though many travel cards can be used when ready in digital wallets like Apple Pay or Google Pay even before the physical card arrives.
Also check whether your card issuer offers any travel protections — like trip cancellation insurance or emergency medical coverage — that might be valuable for your specific trip. These benefits are often included with premium travel cards and can be worth more than the annual fee in a single claim.
Frequently Asked Questions
Do I pay the foreign transaction fee even if I'm buying from a U.S. company while traveling abroad?
It depends on where the merchant is located, not where you are. If you're in London and buy something from Amazon.com (a U.S. company), you typically don't pay the foreign transaction fee because the transaction is processed in the United States. But if you buy from a merchant physically located in another country — even if it's a U.S. brand — you usually do pay the fee. When in doubt, check your statement after the purchase to see whether the fee was charged.
Can I dispute a foreign transaction fee if I think it's wrong?
You can contact your card issuer and ask them to review the fee, but they will almost certainly tell you it was charged correctly according to your card's terms. The fee is not a mistake — it's a charge your issuer is allowed to make. If you believe the fee was charged in error (for example, the transaction was actually in the U.S.), you can dispute it, but disputing a legitimate fee usually doesn't result in a refund.
What's the difference between a foreign transaction fee and a dynamic currency conversion fee?
A foreign transaction fee is charged by your card issuer. A dynamic currency conversion fee is charged by the merchant or ATM when they offer to convert the transaction into dollars for you right then. Always decline dynamic currency conversion and let your card issuer handle the conversion instead — the merchant's rate is almost always worse. Your card issuer's rate, while not perfect, is typically better than what you'll get at the point of sale.
If my card waives foreign transaction fees, do I still need travel insurance?
Foreign transaction fees and travel insurance are completely different things. Waiving the fee saves you money on purchases and ATM withdrawals. Travel insurance protects you if your trip is canceled, you get sick or injured abroad, or your luggage is lost. You may want both, depending on your trip and your risk tolerance, but one doesn't replace the other.
Do prepaid travel cards charge foreign transaction fees?
Many do, though some prepaid cards marketed to travelers waive the fee. Check the card's terms before you buy it. Prepaid cards can be useful if you want to lock in a specific amount of spending money before you travel, but they often charge multiple fees — loading fees, ATM fees, and foreign transaction fees — so compare the total cost to using a credit card that waives foreign transaction fees.