Guide
Foreign transaction fees: what your card really costs abroad
A foreign transaction fee is the percentage your bank adds when you pay in another currency. On a typical bank card it's around 3%, on travel cards it can be 0%. On a A$5,000 trip, that gap is about A$150.
What is a foreign transaction fee?
A foreign transaction fee is a percentage your bank or card issuer adds whenever you pay in a currency other than your card's own. It shows up as a separate line on your statement, or it's folded into the converted amount. Either way, a price tag abroad costs you more than its converted price.
Your card's exchange rate comes from the card network (Visa, Mastercard and so on). It's usually close to the mid-market rate you see in a currency converter, though not identical. The fee is your issuer's charge on top of that.
How much does it add up to?
On a typical bank card, about 3 of every 100 you spend. That's small on a coffee. On a whole trip it isn't:
| Spent abroad | 0% travel card | About 1% | About 3% |
|---|---|---|---|
| A$500 | A$0 | A$5 | A$15 |
| A$2,000 | A$0 | A$20 | A$60 |
| A$5,000 | A$0 | A$50 | A$150 |
| A$10,000 | A$0 | A$100 | A$300 |
The same maths works in any currency. Multiply what you'll spend by the fee. If the answer is more than the annual fee of a no-fee card, a travel card pays for itself.
Where do you find your card's fee?
In your card's fee schedule or key facts sheet, under a name like "international transaction fee", "foreign currency conversion fee" or "overseas transaction fee". Your banking app usually lists it under the card's details. If you can't find it, call the number on the back of the card and ask: "What do you charge on purchases in a foreign currency?"
Check two more things while you're there:
- Overseas merchant purchases. Some issuers charge the fee when you buy from a foreign website in your own currency.
- ATM withdrawals. These can carry a separate cash fee from your bank, and the ATM's owner may add its own.
Priceglot's card presets
Priceglot starts you on a typical bank card at 3%, because that's the safer assumption when we don't know your card. Change it once and every price sheet shows the real cost on your card.
| Preset | Fee used | Use it for |
|---|---|---|
| No-fee travel card | 0% | Cards that charge no foreign transaction fee. The network's exchange rate still applies |
| Low-fee card | About 1% | Cards that sit somewhere around 0.5% to 2%. Set your exact figure if you know it |
| Typical bank card | 3% | Standard bank credit and debit cards. The default until you set your own |
| Custom | Your figure | Any card, with the fee from its fee schedule |
These are starting points, not facts about any particular bank. Your own card's fee schedule wins, and it's worth checking again if your bank changes its fees or you switch cards.
The two traps that cost more than the fee
Dynamic currency conversion. When a terminal or ATM offers to charge you in your home currency, say no. The provider's rate has been measured at roughly 2.6% to 12% worse than the reference rate, and some banks still add their foreign transaction fee on top. Read our guide to dynamic currency conversion.
Exchange counters. Cash bought at a counter can come with a wide gap between the buy and sell rates, so a "no commission" sign doesn't mean it's cheap. Compare the total amount of local money you'll get for your cash, not the headline rate.
How to cut the cost
- Find your card's foreign transaction fee before you go.
- If it's 2% or more and you're spending a few thousand abroad, compare a no-fee card.
- Always pay in the local currency, at the till and at the ATM.
- Take fewer, larger ATM withdrawals if your bank charges per withdrawal.
- Use a currency converter to check the mid-market rate, then add your fee to know the real price.
How Priceglot helps
Point Priceglot at a price tag and it shows three numbers: the tag price, the mid-market conversion, and what it costs on your card with your fee. If the country has a tourist tax refund, the price sheet subtracts an estimate of that too. Our tax-free shopping guides explain the refund side.
Questions
What is a foreign transaction fee?
It's a percentage your card issuer adds to any purchase made in a foreign currency, and often to purchases from overseas merchants even when they charge in your own currency. It's listed in your card's fee schedule, sometimes as an international transaction fee, foreign currency conversion fee or overseas transaction fee.
How much is a typical foreign transaction fee?
Many standard bank credit and debit cards charge around 3%. Some cards charge around 1%, and cards sold for travel often charge nothing. The only number that matters is your own card's, so check its fee schedule or your issuer's app before you travel.
Do I pay the fee if I choose to pay in my home currency?
Often, yes. Many issuers still charge the fee because the merchant is overseas, and you also pay the shop's conversion mark-up. That's why you should always pay in the local currency. See our guide to dynamic currency conversion.
Is a 0% card always the cheapest?
For card purchases in local currency, it usually is. Check the rest of the card's costs too: annual fees, ATM withdrawal fees and the interest rate if you carry a balance can outweigh what you save on the fee.
Sources
Point at the tag. Get the real price.
Priceglot converts every price in view, adds your card fee and estimates the tax refund.
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