What Is a Credit Card Foreign Transaction Fee?

Definition & Examples of Credit Card Foreign Transaction Fees

Young woman abroad shopping online with credit card
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A credit card foreign transaction fee is a surcharge that cardholders pay on credit card purchases made in a foreign currency or processed by a foreign bank.

What Is a Credit Card Foreign Transaction Fee?

If you've traveled overseas recently and used your credit card while you were on your trip, you may have been surprised to find a foreign transaction fee on your credit card statement. It's not an error: This is a legitimate fee that comes with many credit cards, and you may not be able to get the charge refunded easily after the fact.

A foreign transaction fee is a fee that banks and other credit card issuers charge in conjunction with credit card networks like Visa on a transaction that occurs in a foreign currency or is processed by a foreign bank (even if a foreign currency wasn't used).

The fee can apply when you use your credit card outside of the U.S., or when you make a domestic purchase in a foreign currency or buy something in U.S. dollars from a merchant that doesn't process the transaction in the U.S (for example, a telephone or online order from an airline or another company based internationally).


You don't have to be in a different country to be charged a foreign transaction fee. For example, you can be charged a fee if you book a flight through Singapore Airlines, even if you're sitting in front of your computer in Springfield, Missouri.

How Credit Card Foreign Transaction Fees Work

These fees are charged for the convenience of converting a foreign currency into U.S. dollars. They're typically assessed at the end of your monthly billing cycle, and the result is that you'll pay the original price plus the markup of the fee for any applicable international purchases.

Take a look at an example of credit card foreign transaction fees at work:

  • You're traveling in Italy and buy dinner for $100 using a card on the Visa network.
  • Visa applies a 1% fee or $1 to the cost of your dinner.
  • The card-issuing bank charges 2% in fees or $2 to the cost of the meal, bringing the total foreign transaction fee to 3%.
  • Your credit statement will show a charge of $103 (100*0.03).

As the example shows, the fee can increase the costs of individual international transactions and the overall cost of overseas trips. And, assuming your credit card offers rewards, you won't necessarily earn rewards on what you pay in foreign transaction fees.

How Much Is a Credit Card Foreign Transaction Fee?

The fee consists of two parts:

  • Card network fee: Networks that process credit card payments (such as Visa) charge a fee of around 1% of the cost of the transaction. For example, Visa and MasterCard commonly charge a 1% foreign transaction fee, American Express charges a 2.7% fee, and Discover charges no foreign transaction fee.
  • Card issuer fee: Banks and credit unions that issue credit cards tack an additional 1% to 2% in fees on top of the network fee.

This means that the foreign transaction fee is between 1% and 3% of the transaction in U.S. dollars, depending on your credit card issuer and payment processing network.


Discover acts as both a credit card network and a card issuer, and is the only one of the four main card networks that imposes no foreign transaction fee on any of its cards. However, Capital One, a card issuer that operates in both the Visa and MasterCard networks, also forgoes the fee on all of its cards. In addition, most travel cards lack the fee.

How to Keep Credit Card Foreign Transaction Fees Low

You can minimize your overseas trip costs by avoiding cards that impose these fees or choosing cards that impose fees on the lower end of the range mentioned earlier. There are plenty of credit cards that don't charge a foreign transaction fee, so consider opening one of these before making an international trip. Both Capital One and Discover have removed the foreign transaction fee from all their credit cards, so if you already have one of these in your wallet, you can swipe on your trip knowing you won't incur any extra fees. Similarly, Visa, Mastercard, and American Express all offer some cards without a foreign transaction fee.

When you're shopping for a credit card, or trying to determine whether your own card comes with the fee, read through the credit card disclosure to find out whether you'll be charged a foreign transaction fee and the amount of the fee. This is key for any credit card you may use for international purchases.

If you don't have a copy of your credit card agreement, find it on your credit card issuer's website or the Federal database for credit card agreements. Or, call your credit card issuer to learn whether your credit card charges a foreign transaction fee and how much you can expect to pay. While you're on the phone, let your credit card issuer know you'll be traveling overseas so they won't automatically flag your international purchases as fraudulent. Keep in mind: Many issuers, like Bank of America and Capital One, no longer require these notices because of the enhanced security on chip credit cards.

Key Takeaways

  • You pay credit card foreign transaction fees on purchases in a foreign currency or processed by a foreign bank.
  • These fees range from 1% to 3% of the transaction, and the exact amount you'll pay is spelled out in your cardholder agreement.
  • Some cards come with no foreign transaction fees, minimizing the costs of your international purchases.
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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Experian. "What Is a Foreign Transaction Fee?" Accessed June 22, 2020.

  2. Discover. "Everyday Value You Can Count On." Accessed June 22, 2020.

  3. American Express. "Do I Have to Pay Foreign Transaction Fees When I Use My Card?" Accessed June 22, 2020.

  4. Chime. "The Foreign Transaction Fees." Accessed June 22, 2020.

  5. Experian. "How to Avoid Foreign Transaction Fees." Accessed June 22, 2020.

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