Hailey Johnson
Foreign transaction fees are a nuisance for those who travel frequently, and these small fees can add up quickly. Luckily, there are banks that do not charge international fees, and some even offer rebates for any fees incurred. For example, the Macquarie debit card has no international account fees on overseas purchases and does not charge for cash withdrawals at overseas ATMs. Similarly, the Schwab Bank Investor Checking™ account offers unlimited rebates for withdrawing cash from international ATMs using their debit card. Other banks that offer accounts with no international fees include HSBC, Discover Bank, and Fidelity. For those who prefer credit cards, Bank of America and NerdWallet offer cards with no foreign transaction fees.
| Characteristics | Values |
|---|---|
| Banks with no international fees | Macquarie, Bank of America, Capital One, Chase Sapphire Preferred, Alliant Cashback Visa, Discover Bank, Schwab Bank Investor Checking, Fidelity Cash Management Account, HSBC Premier checking account |
| Cards with no international fees | Visa, Mastercard, American Express, Discover |
| Card features | No annual fee, rewards, bonus offers, introductory and ongoing interest rates, travel perks, trip cancellation insurance, free checked luggage, rental car benefits |
| International ATM withdrawal fees | $3 to $5 per use, plus a percentage-based foreign transaction fee |
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What You'll Learn
Credit cards with no foreign transaction fees
When choosing a credit card, it's important to consider your spending habits and select a card that matches them to make your money go further. Foreign transaction fees, also known as FX fees, are surcharges that you pay when you make a purchase with your credit card that either passes through a foreign bank or is in a foreign currency, including online purchases. These fees typically range from 1% to 3% of the purchase price, so they can add up quickly when travelling internationally or making frequent online purchases from foreign merchants.
Many credit cards waive foreign transaction fees and may offer additional benefits that make foreign travel safer and more convenient. For example, some cards offer perks like baggage and trip delay insurance, discounted or free entry to airport lounges, priority boarding, free checked luggage, and free in-flight Wi-Fi. Some cards also offer expedited card replacement services and 24/7 benefits administrators who can provide medical or legal referrals and assistance with prescriptions and other emergency services.
- Chase offers several credit cards with no foreign transaction fees, including the United ClubSM card, which provides benefits such as United ClubSM one-time passes, free checked bags, Premier Access travel services, and annual partner credits.
- Mastercard offers a premium travel card with no foreign transaction fees, exceptional airfare redemption, access to hotel privileges, and elevated service compared to conventional cards. Cardmembers also receive protection benefits and earn one point for every dollar spent.
- Bank of America offers credit cards with no foreign transaction fees, and their Preferred Rewards members can enjoy benefits and rewards on their everyday banking and investment accounts.
- Capital One offers a Mastercard with no foreign transaction fees and additional benefits such as $0 Fraud Liability, the ability to lock your card in the Capital One Mobile app if it's lost or stolen, and up to $500 in referral bonuses.
- NerdWallet's Credit Cards team selects the best credit cards with no foreign transaction fees based on overall consumer value and their suitability for specific consumers. They consider factors such as annual fees, rewards rates, introductory and ongoing interest rates, bonus offers, and travel perks.
In addition to credit cards, some banks offer debit cards with no international fees. For example, Macquarie offers a debit card with no international account fees on overseas purchases and no fees for withdrawing cash at overseas ATMs.
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International ATM withdrawal fees
When withdrawing money from an international ATM, you may be charged a flat rate fee (often between $1 and $5 USD) or a percentage of your total withdrawal (generally between 1-3%). Some banks may also charge a 'conversion fee' of 1-3% of the transaction. This means that when you use a bank-issued card overseas, you will likely pay a combined flat fee for using an ATM network, plus a percentage of the value of the cash you withdraw.
There are several ways to avoid or reduce international ATM withdrawal fees. Firstly, you can use a card that does not charge foreign transaction fees, such as the Capital One 360 debit card or the Apple Card. Alternatively, you can use a travel credit card that waives foreign transaction fees, allowing you to skip ATM fees and avoid carrying large amounts of cash. Additionally, withdrawing larger amounts of cash at once can reduce the frequency of withdrawals and the number of fees incurred.
Some banks, such as Macquarie, do not charge fees for international cash withdrawals or transactions made outside of the country, although other institutions may still charge fees for these transactions. It is also worth noting that some ATMs may offer dynamic currency conversion, allowing you to pay in your home currency, but this can involve hidden currency conversion fees of up to 7%.
Before travelling, it is advisable to research the various fees charged by different ATMs and plan your withdrawals to avoid excessive fees and find the most economical options.
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Foreign transaction fees on debit cards
Foreign transaction fees can add up quickly when using a debit card abroad. These fees are typically between 1% and 3% of the purchase amount, and many banks also apply this fee to ATM withdrawals. Therefore, it is important to understand how these fees work and how to avoid them.
One way to avoid foreign transaction fees is to use a debit card that does not charge these fees. Some banks and credit unions that offer debit cards with no foreign transaction fees include Capital One, HSBC, Santander, and Wise. Additionally, digital banks like Revolut offer debit cards with no fees for spending abroad in over 150 currencies.
It is worth noting that some banks may offer reimbursement for any ATM or foreign transaction fees incurred during your trip. For example, Charles Schwab refunds ATM fees and offers competitive conversion rates. However, it is always a good idea to check with your bank before you travel to understand any limitations or requirements.
Another strategy to avoid foreign transaction fees is to use a credit card that waives these fees when travelling abroad. Credit cards often provide better consumer protection and lower currency conversion rates than debit cards. Additionally, some credit cards are specifically designed for international travel and do not charge foreign transaction fees.
In summary, foreign transaction fees on debit cards can be avoided by using specific debit cards that do not charge these fees, such as those offered by Capital One, HSBC, Santander, and Wise. Additionally, digital banks like Revolut offer competitive options. Reimbursement for fees may also be available from certain banks. Alternatively, consider using a credit card that waives foreign transaction fees when travelling, as these cards often provide better consumer protection and currency conversion rates.
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International account fees
Foreign Transaction Fees
Foreign transaction fees are surcharges added to purchases made outside of your home country. These fees typically range from 1% to 3% of the purchase amount, and they are usually added by the card network, such as Visa or Mastercard, to offset the conversion cost and the risk of fraud. However, your card issuer may also add its own fee on top of this.
Withdrawal Fees
Withdrawal fees are charged when you withdraw cash from an international ATM. These fees can be as much as $3 to $5 per withdrawal, plus a percentage-based foreign transaction fee. Some banks may also charge a monthly service fee if certain requirements, such as a minimum balance, are not met.
Currency Conversion Fees
Currency conversion fees are separate from foreign transaction fees and may be charged on top of them. This fee is incurred when you opt to be charged in your home currency while travelling abroad. However, you may be given a poor exchange rate, so it is generally best to avoid this option.
Banks and Credit Cards with No International Fees
When looking for banks or credit cards with no international fees, here are some options to consider:
- Macquarie: Macquarie offers an everyday digital bank account with no international account fees on overseas purchases and no fees for withdrawing cash at international ATMs.
- Schwab Bank Investor Checking: This account provides unlimited rebates for withdrawing cash from international ATMs using the Schwab Bank Visa Platinum Debit Card. There are no monthly fees or minimum balance requirements, and no foreign transaction fees for debit card purchases.
- Discover Bank: Discover Bank does not charge any foreign ATM network or foreign transaction fees when using international ATMs. However, their ATM coverage outside of North America and the Caribbean is limited.
- Fidelity Cash Management Account: Fidelity offers free ATM withdrawals worldwide and reimburses any ATM-issuing fees. There are no foreign transaction fees on ATM withdrawals or debit purchases, and no minimum opening balances or monthly service fees.
- HSBC: HSBC has a global network of branches and ATMs, and customers are not charged ATM withdrawal fees when using HSBC-branded ATMs internationally. However, a foreign transaction fee of 3% applies, which is waived for HSBC Premier checking account customers with a maintained balance of $100,000 or a qualifying commercial balance.
- Bank of America: Bank of America offers credit cards with no foreign transaction fees, as well as rewards and benefits on banking and investment accounts.
- Capital One Venture Rewards Credit Card: This card was recommended by CNBC for its lack of foreign transaction fees and wide acceptance overseas.
- Chase Sapphire Preferred: This card was recommended by CNBC for its lack of foreign transaction fees and travel insurance benefits.
- Alliant Cashback Visa Signature Credit Card: This card was recommended by CNBC for its cashback rewards and lack of foreign transaction fees.
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Foreign transaction fees and currency conversion fees
Foreign transaction fees are surcharges levied by credit card issuers on purchases made outside the country or with foreign merchants online. These fees are typically calculated as a percentage of the total purchase price, usually ranging from 1% to 3%. For example, if you have a 3% foreign transaction fee and purchase a meal for $50, you'll be charged an additional $1.50 as the foreign transaction fee.
Currency conversion fees, on the other hand, are charges incurred when converting one currency to another during an international transaction. These fees can come in two forms: when your credit card processor handles the conversion, or when merchants offer to convert the transaction into your home currency at the point of sale, known as Dynamic Currency Conversion (DCC). DCC fees can range from 3% to 12% of the transaction amount.
To avoid foreign transaction fees, you can consider using a Macquarie debit card, which has no international account fees on overseas purchases or ATM withdrawals. Additionally, Bank of America offers credit cards with no foreign transaction fees, and Capital One provides travel rewards credit cards with no such fees. Citi also offers cards designed for frequent travellers that don't charge foreign transaction fees.
To minimise currency conversion fees, it's advisable to reject DCC at payment terminals and opt to pay in the local currency. Carrying local currency in cash is another way to bypass both foreign transaction and currency conversion fees, although you may need to consider ATM fees for cash withdrawals abroad.
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Frequently asked questions
Some banks that offer accounts with no international fees include Macquarie, Schwab Bank, Discover Bank, and Fidelity.
International fees can include foreign transaction fees, which are typically around 3% of the purchase amount, and international ATM withdrawal fees, which can be around $3 to $5 per withdrawal plus a percentage-based foreign transaction fee.
Yes, some credit cards that don't charge foreign transaction fees include the Bank of America Travel Rewards Credit Card, Capital One Venture Rewards Credit Card, and Chase Sapphire Preferred® Card.
To avoid international fees, consider using a debit or credit card that doesn't charge foreign transaction fees or international ATM fees. Exchanging currency before travelling and using cash can also help minimize fees.
