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May 6, 2020  •  4 min read
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By
Louis DeNicola (https://www.experian.com/blogs/ask-
experian/author/louis-denicola/)
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At Experian, one of our priorities is consumer credit and nance
education. This post Your
Check may contain
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of our partners, butyour
Review we provide anyour
credit with objective
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best decisions. For more information, see our Editorial Policy.

In this article:

Watch Out for Conversion and Transaction Fees

Open a Credit Card That Doesn’t Have a Foreign
Transaction Fee
Exchange Currency Before You Travel
Open a Bank Account That Doesn’t Charge
Foreign Fees
Pay With the Local Currency 
Finding Cards With No Foreign Transaction Fees

If you're traveling abroad and making purchases with your

credit card, you may wind up paying an extra 1% to 3% in
fees on every purchase—which can quickly add up if you're
making large purchases or frequently spend time abroad.
You could also be charged foreign currency conversion fees
while traveling, which could cost you even more.
The simplest way to avoid foreign transaction fees is to use
a card thatCheck
doesn'tYour Free
charge theCredit Report
fee. Barring that, there
 are
Review your credit with your FICO® Score for free.
several steps you can take to avoid these costs.

Watch Out for Conversion and

Transaction Fees
Fees for foreign transactions can come in several forms,
and they can depend on what currency you're paying in and
where you're making a purchase.

First, there are currency conversion fees that payment

networks, banks, ATM operators and merchants may
charge. These are markups on the conversion rate, and are
generally unavoidable. There are, however, ways to minimize
them.

Some debit and credit cards also charge foreign transaction

fees (/blogs/ask-experian/understanding-credit-card-fees/).
The fee can apply whenever you make a purchase in foreign
currencies or if a foreign bank processes your transaction.
As a result, if you're traveling abroad, you could be charged
Check Your
a foreign transaction feeFree
evenCredit Report
if you're paying a merchant
 in
Review your credit with your FICO® Score for free.
U.S. dollars. You could also be charged the fee if you're in
the U.S. and make a purchase online that's in a foreign
currency.

However, the foreign transaction fees are easy to avoid if

you use a card that doesn't have the fee.

Open a Credit Card That Doesn't Have

a Foreign Transaction Fee
There are many credit cards that don't have foreign
transaction fees (/credit/credit-cards/no-foreign-
transaction-fee/). For example, none of the consumer cards
from Discover or Capital One charge this fee, and many
popular travel credit cards don't have the fee either. Some
cards also offer extra bene ts that can be helpful while
you're traveling.

For example, the Chase Sapphire Reserve® (/blogs/ask-

experian/reviews/credit-cards/chase-sapphire-reserve-card/) offers a long
list of travel-related bene ts, including up to $300 in annual travel statement
credits and free Priority Pass Select membership (enrollment required),
which can get you into over 1,200 airport lounges worldwide.
You can also receive a statement credit to offset the cost of
Check
Global Entry Your
or TSA Free Credit
Precheck, which Report
can help youquickly
Review your credit with your FICO® Score for free.
get through lines at the airport. However, the card's $550
annual fee may be hard to justify unless you're a frequent
traveler.

Exchange Currency Before You Travel

Another option to avoid fees is to visit your bank in the U.S.
before you set off and exchange the dollars in your account
for your destination's local currency. You may nd that your
bank or credit union charges a low (or no) foreign exchange
fee, making it an ideal place to exchange money.

You likely don't want to be carrying too much cash when you
travel, however. But having a little spending money when
you arrive can be helpful, and you'll likely save a lot
compared with exchanging your money at an airport or
other port of entry.
Open a Bank Account That Doesn't
ChargeCheck
ForeignYour Free Fees Credit Report
Review your credit with your FICO Score for free.
®


Using a credit card that doesn't charge foreign transaction

fees can help decrease your costs. But some merchants
may charge you extra if you want to use a credit card, or
might not accept credit cards at all.

Before leaving the U.S., see if your bank charges any extra
fees when you're outside the country. Sometimes there are
debit card foreign transaction fees or higher ATM fees. You
may be able to avoid these by opening the right account.

One popular option is the Charles Schwab Bank High Yield

Investor Checking® account
(https://www.schwab.com/checking) because it doesn't
have any account minimums or foreign transaction fees.
Charles Schwab also refunds all ATM fees worldwide.

If you don't want to open a new bank account for traveling,

ask your bank if it has branch locations or partner banks
abroad. You may be able to make withdrawals from ATMs
at those locations for free.
Pay With the Local Currency
Check Your Free Credit Report 
When merchants accept cards, they may ask whether
Review your credit with your FICO® Score for free.
you
want to pay in the local currency or U.S. dollars. It may
seem counterintuitive, but paying with the foreign currency
is often the better option.

Merchants (and ATM operators) can do this using a

dynamic currency conversion (DCC), which lets them show
you the cost in the local currency or dollars in real time.
However, there's a built-in conversion fee markup that's
often much higher than what the payment networks charge.
Plus, even if you choose dollars, you may have to pay a
foreign exchange fee because a foreign bank will process
the transaction.

You could check the Visa

(https://usa.visa.com/support/consumer/travel-
support/exchange-rate-calculator.html) and Mastercard
(https://www.mastercard.us/en-us/personal/get-
support/convert-currency.html) conversion rates and
markups online, and compare the rate with what the
merchant will charge you. But as a general rule of thumb,
Check
using a card Your Free
that doesn't Credit
charge Report
a foreign transaction
 fee
Review your credit with your FICO® Score for free.
and choosing the local currency is the best option.

Finding Cards With No Foreign

Transaction Fees
Choosing the right credit card depends on more than the
foreign transaction fee. You'll want to consider the annual
fees, rewards, cardholder bene ts and required credit to get
approved for the card. Experian CreditMatchTM
(/credit/credit-cards/) can help you sort through credit card
offers based on the type of card, fees, credit card issuer and
credit score ranges.

What's on Your Credit Report

(https://usa.experian.com/registration?
offer=at_frsas102&br=exp&op=FRSC-
ASK-ART-102-BNN-
(https://usa.experian.com/re
offer=at_frsas102&br=exp&o
ASK-ART-102-BNN-XXXXXXX
 TAND-SEO-2054XX-39219X-
XXXXXXX-XX-EXP-TAND-
XXXXX&dAuth=true)
Check Your
SEO-2054XX-39219X- Free Credit Report
XXXXX&dAuth=true) 
Stay®up-to-date
Review your credit with your FICO with your latest c
Score for free.
information — and get your FICO®
free.

No credit card require

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(https://www.experian.com/blogs/ask-experian/best-credit-cards-
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 Check Your Free Credit Report 
What Is a Balance Transfer
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with How Does
your FICO® It Work?
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(https://www.experian.com/blogs/ask-experian/what-is-a-
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