Multi-currency & travel: Foreign transaction fees: what they cost and how to avoid them

What is a foreign transaction fee?

A charge your card issuer adds when you pay in a foreign currency or buy from a merchant based abroad. It's usually a percentage of the purchase, between 1% and 3%.

The CFPB's credit card survey describes it as a fee on transactions that take place overseas or with a foreign merchant. That second part catches people out: an online order from a shop based in another country can carry the fee even if you never left home, and sometimes even if the price was shown in dollars.

The fee is separate from the exchange rate. You pay the card network's conversion rate on the purchase, and then the fee on top.

How much are foreign transaction fees?

Usually 1% or 3%, and about half of US credit card plans don't charge one at all.

In the CFPB's Terms of Credit Card Plans survey for the second half of 2025, 663 plans from 195 issuers reported their foreign transaction fee:

The big issuers are split further apart. Among plans from the 25 largest card issuers, 63% charged no foreign transaction fee. But of the ones that did, 89% charged 3%. The 1% fees mostly come from smaller banks and credit unions.

These are counts of card plans, not of cards in people's wallets, so they don't tell you what share of cardholders pay the fee. They do tell you that a card without one isn't hard to find.

What does a foreign transaction fee cost on a trip?

The fee times everything you spend abroad on that card. On a trip with $2,000 of card spending, a 3% fee costs $60 and a 1% fee costs $20.

Hotels, car hire and flights booked with foreign companies count too, so the total is often bigger than the spending money you take. How to budget for a trip abroad has a line for card fees in its worked example.

Should you pay in local currency or your home currency?

Local currency, almost always. When a card terminal, ATM or website offers to charge you in dollars, that's called dynamic currency conversion, and the exchange rate is set by whoever is offering it, not by your card network.

The screen usually makes paying in your home currency look like the safe choice. It isn't. The rate often includes a mark-up, and your card may still add its own foreign transaction fee because the merchant is abroad. Choose the local currency and let your card do the conversion.

Do debit cards and ATMs charge foreign transaction fees?

Many do. A debit card can carry the same percentage fee as a credit card, and a cash withdrawal abroad can add a fee from your bank and another from the ATM's owner.

Check your bank's fee schedule before you go. If you'll need cash, withdraw larger amounts less often, so fixed per-withdrawal fees hit fewer times, and decline the ATM's offer to convert the amount for you.

How do you avoid foreign transaction fees?

Use a card that doesn't charge them, pay in the local currency, and check the card's terms before you travel.

1. Check your current cards. The foreign transaction fee is listed in the card's terms and on the issuer's website. You may already have one without it.
2. Use the no-fee card for everything abroad, including foreign websites and bookings.
3. Decline conversion to your home currency at terminals, ATMs and checkouts.
4. Keep cash for where it's needed, and take it out in fewer, larger withdrawals.

How do you track spending in another currency?

Log each purchase in the currency you paid, and record any fee as its own line so you can see what the card cost you.

In Wealtie, each account keeps its own currency, and your totals are converted into your display currency at each day's rate across all 68 currencies. A card fee logged as its own expense shows up in your category totals, so the trip's true cost is one number. Cash abroad goes in the same way: Wealtie is an expense tracker that never connects to your bank, so a market stall counts like a card payment. How to track spending in two currencies goes through which exchange rate to use and why your total moves when you haven't spent anything.