Are you planning on international travel? A big expense you can avoid with careful planning is foreign transaction fees from your credit card.
By default, most credit cards include an international transaction fee when you make purchases abroad. There are, however, a few select credit cards that offer no foreign transaction fees as one of their perks.
Typical Foreign Transaction Fees
I looked through many of my credit cards to find the foreign transaction fees for each one. For the most part, almost all of them charged 3%. I did find one old card with a visa foreign transaction fee that was 1%.
And of the 50+ credit cards I looked through, I only found one with no foreign transaction fee; however, unfortunately it’s an old card you can’t get anymore. So that doesn’t really help you.
Adding Up Foreign Transaction Fees
If you plan to spend a few thousand dollars on international travel, adding a 3% foreign transaction fee to all of your costs will add up quickly!
For example, a $3,000 vacation would incur $90 in transaction fees. Obviously, since you can avoid the $90 with some advance planning, it makes sense to look for a card that will let you make those purchases for free.
Foreign Transaction Fees at Home
Even if you don’t leave the country, you still might face a foreign transaction fee. For example, we recently purchased a subscription online. Even though the transaction seemed flawless and the shipment arrived from the United States, we were still charged a foreign exchange transaction fee from our credit card.
Apparently, the company that processed the subscription was based in Canada. So I was charged a Chase foreign transaction fee of 3%. Luckily the subscription was cheap or I would have been pretty upset.
If you’re looking to avoid foreign conversion fees, your best best is to apply for a credit card with zero foreign transaction fees. After your international travel, your wallet will thank you!