Megan Brooks
Capital One is a large American bank that offers currency exchange services, allowing customers to hold foreign cash. While Capital One does not charge foreign transaction fees on its credit cards, its currency exchange services are not recommended for retail customers due to their high fees and weak exchange rates. Capital One charges a $40 bank fee for transfers sent in foreign currency and a hidden exchange rate margin fee, resulting in an exchange rate that is 4-7% weaker than the mid-market rate. For travellers, it is suggested to use travel debit cards at ATMs abroad or cards that waive foreign transaction fees, such as Chime or Revolut.
| Characteristics | Values |
|---|---|
| Currency exchange services | Available for business clients and customers who want to invest their wealth in foreign currencies |
| Currency exchange fees | $40 for transfers in foreign currency |
| Exchange rate margin | 4-7% |
| Branches offering currency exchange | Major branches |
| Recommended for retail customers | No |
| Recommended for business customers | Yes |
| Foreign transaction fees on credit cards | Not charged by Capital One |
| Foreign transaction fees on debit cards | Not charged by Capital One |
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What You'll Learn
Capital One's foreign exchange fees
Capital One does not charge foreign transaction fees on any of its credit cards, including travel and cashback rewards cards. This means that you can use your Capital One credit card to make purchases outside the U.S. or with foreign merchants online without incurring additional fees.
However, it's important to note that foreign transaction fees are different from currency conversion fees. Foreign transaction fees are charged by the card issuer for using the card in a foreign country or with a foreign merchant. Currency conversion fees, on the other hand, are charged for exchanging one form of currency to another. While Capital One does not charge foreign transaction fees, they may charge currency conversion fees. These fees are typically around 1% of the purchase amount but can vary depending on the exchange rate.
In addition, while Capital One does not charge additional fees for debit card foreign transactions, you may be charged a fee by the operator if you use an out-of-network ATM. These foreign ATM fees can be as high as $5 per transaction, plus around 3% of the amount you're withdrawing. Therefore, it's recommended to exchange some currency before your trip and carry local currency with you to avoid these fees.
To avoid foreign transaction fees altogether, you may want to consider applying for a credit card that doesn't charge these fees, such as the Capital One Venture X Rewards Credit Card, which offers elevated rewards specifically designed for international travel. Alternatively, you can explore travel rewards cards that may charge an annual fee but offer benefits that can offset the costs.
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Currency exchange alternatives
Credit and debit cards
Some credit and debit cards do not charge foreign transaction fees, which can be as high as 3% per transaction. Capital One is one such issuer that does not charge foreign transaction fees on any of its credit card products. Other examples include the Fidelity Cash Management account debit card and some Discover cards.
Traveller's cheques
Traveller's cheques are a way to travel with less cash. You can request them from your bank in predetermined amounts and then use them to pay bills or exchange them for cash.
Currency exchange at your local bank
You can exchange currency at your local bank before you travel. Call your bank 2-3 days before you want to exchange currency, tell them how much you want and in what currency, and then wait for it to be delivered to your local branch for pickup.
Currency exchange at the airport
Currency exchanges may be available at the airport, but they might charge higher conversion rates than your bank or credit card.
Currency exchange providers
There are several currency exchange providers that allow you to compare exchange rates and set up exchange rate notifications, such as Wise and Xe. OANDA offers a free currency converter that allows you to check the latest foreign exchange rates and convert all major world currencies, precious metals, and obsolete currencies.
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Foreign transaction fees
Capital One does not charge foreign transaction fees on its debit cards. However, you may be charged a fee by the operator if you use an out-of-network ATM. Capital One also offers travel rewards credit cards with no foreign transaction fees, such as the VentureOne Rewards Credit Card and the Venture X Rewards Credit Card.
To avoid foreign transaction fees, you can use a debit card that does not charge these fees, such as the Fidelity Cash Management account debit card, or a credit card that waives these fees, such as those from Chime or Revolut. You can also avoid these fees by using local currency, which you can obtain through a multi-currency account from a financial technology platform like Revolut or by withdrawing from an ATM in the local currency. Additionally, you can research the exchange rate and exchange currencies before you start travelling, especially if you are unfamiliar with the country you are visiting.
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Currency conversion fees
Dynamic currency conversion (DCC) is a practice in which foreign merchants may offer to charge your purchase in US dollars instead of the local currency. You should never accept these offers because if the merchant converts your payment for you, they may set their own high exchange rate to increase their profits.
Capital One does not charge foreign transaction fees or currency conversion fees. Capital One offers travel rewards credit cards with exclusive benefits and elevated rewards that can help make your travel experience more enjoyable. The Capital One Venture X Rewards Credit Card is the best travel card with no foreign transaction fees.
To avoid foreign transaction fees, you can use local currency or apply for a credit card that does not charge foreign transaction fees.
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Foreign currency for travel
When it comes to exchanging foreign currency for travel, there are a few options to consider. While Capital One does offer currency exchange services, these are primarily designed for business clients and investors dealing with foreign currencies. For individual customers seeking foreign currency for travel, it is recommended to explore other options due to the high fees and unfavourable exchange rates associated with Capital One's currency exchange services.
One option is to use a travel debit card at ATMs abroad. The exchange rates offered by MasterCard, Visa, and other providers are often more favourable than those of traditional banks like Capital One. Cards such as Chime and Revolut are recommended for their lack of foreign transaction fees. It is generally advised to avoid using credit cards at ATMs, as cash advances can accrue higher interest rates.
When travelling, it is beneficial to pay in the local currency whenever possible. This helps to avoid dynamic currency conversions, where the payment machine may prompt you to pay in your home currency, resulting in less favourable exchange rates and additional fees. By selecting the local currency, you can take advantage of the real-time exchange rates offered by your card provider.
Additionally, it is worth considering a multi-currency account from a financial technology platform. For example, Revolut offers industry-leading exchange rates on over 25 currencies through its smartphone app and travel debit card. This provides a convenient and cost-effective way to access foreign currency digitally.
Lastly, it is important to be mindful of foreign transaction fees. These fees, typically ranging from 2% to 3%, can add up quickly when applied to all your purchases. Capital One offers travel rewards credit cards that do not charge foreign transaction fees, such as the Venture X Rewards Credit Card. By using a card that waives these fees, you can save a significant amount on your travel expenses.
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Frequently asked questions
Capital One does not charge foreign transaction fees or currency conversion fees. However, other issuers might.
Capital One offers currency exchange services that allow customers to hold foreign cash. However, these services are primarily designed for business clients and customers who want to invest their wealth in foreign currencies.
There are a few ways to access cash while traveling abroad with Capital One. Firstly, you can use a travel debit card with no foreign transaction fees at ATMs abroad. Secondly, you can use a credit card that waives foreign transaction fees, such as Chime or Revolut. Finally, you can exchange some currency at home before your trip by calling your bank 2-3 days beforehand and requesting the desired amount in your preferred currency.
