If you travel internationally — or shop at international websites — your credit card might be charging you a silent fee you don't even notice: the foreign transaction fee. It typically runs 1% to 3% of every purchase made in a foreign currency, and it adds up fast.
The good news is that many credit cards have eliminated this fee entirely. Here's what you need to know.
What Is a Foreign Transaction Fee?
A foreign transaction fee (also called a foreign purchase fee or FX fee) is a charge your card issuer adds when you make a purchase in a foreign currency — or when a transaction routes through a foreign bank.
For example, if you buy something for €100 (about $110 USD) and your card charges a 3% foreign transaction fee, you'll pay an extra $3.30 on top. Do that a dozen times on a trip and you've paid $40 in fees without even thinking about it.
The fee is usually split between your card issuer and the payment network (Visa, Mastercard, etc.) — but you only see it as one charge on your statement.
Who Cares Most About This Fee?
Foreign transaction fees matter most to:
- International travelers who use their card abroad for hotels, meals, and purchases
- Immigrants and international students who send money home or buy from merchants in their home country
- Online shoppers who buy from international retailers or marketplaces
- People who work remotely for foreign companies or receive payment in foreign currencies
If any of these describe you, a no-foreign-transaction-fee card is worth prioritizing.
Cards Designed for Credit Building With No Foreign Fee
Many travel rewards cards waive foreign transaction fees — but they typically require good or excellent credit to qualify. If you're building credit, your options are more limited, but they exist.
Secured cards with no foreign transaction fees: Some secured cards — where you put down a deposit to open the account — do not charge foreign transaction fees. These are ideal for people with limited or no credit history who travel or shop internationally.
When comparing secured cards, look specifically for "no foreign transaction fee" in the card's terms. It's not universal — many budget secured cards do charge this fee.
ITIN-friendly international cards: If you're an immigrant building credit with an ITIN, some issuers designed for your situation have eliminated foreign transaction fees because they understand their customers often have international ties. See the best credit cards for immigrants that waive this fee. If you don't have an ITIN yet, TheITIN.com helps you get one quickly and online, opening up more card options for your international spending.
Firstcard: Designed for people building credit from scratch — including immigrants and international students — Firstcard has no foreign transaction fees, making it useful whether you're shopping locally or internationally.
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How to Spot a No-Foreign-Fee Card
When comparing cards, look for:
- "No foreign transaction fee" or "$0 foreign transaction fee" in the card's fee schedule
- The card's Schumer Box (the standardized fee disclosure table all issuers must include)
Don't assume — always verify. Many popular credit cards still charge 2.7% to 3% on foreign purchases.
Tips for Using Credit Abroad
Always pay in local currency. When a foreign merchant or ATM offers to charge you in U.S. dollars ("dynamic currency conversion"), decline. Their exchange rate is almost always worse than your card's rate.
Notify your card issuer before you travel. Many banks flag international transactions as potential fraud and may block your card. A quick call or in-app notification prevents this problem.
Keep a backup payment method. Not all foreign merchants accept all card networks. Having two different cards (ideally Visa and Mastercard) gives you flexibility.
Be cautious with ATM withdrawals. Even with no foreign transaction fees, ATM withdrawals abroad may incur ATM fees from the machine's owner. Look for ATMs associated with your bank's network when possible.
Frequently Asked Questions
What is a foreign transaction fee on a credit card? It's a charge of 1–3% added to purchases made in a foreign currency or processed through a foreign bank. It's separate from currency conversion.
Which credit cards have no foreign transaction fees? Many travel cards waive this fee, as do some credit-builder cards like those designed for immigrants. Always verify in the card's fee schedule.
Do secured credit cards charge foreign transaction fees? Many do, but some don't. Always check the Schumer Box before applying if international use is important to you.
Is the foreign transaction fee charged even for online international purchases? Yes. If you buy from a foreign merchant online in their local currency, the fee applies.
The Bottom Line
Foreign transaction fees are an avoidable cost. If you travel internationally or frequently shop from foreign retailers, choosing a card that waives this fee can save you meaningful money over time. For people building credit, secured cards and credit-building products that eliminate foreign transaction fees are the best starting point. Always read the fee schedule before applying.
