Also, all of the above institutions offer some cards that don’t charge these fees. Notably, Capital One doesn’t charge a foreign transaction fee for any of its cards, whether issued by Mastercard or Visa. The fee is presented as a single percentage, usually 3%. How much are foreign transaction fees?įoreign transaction fees are common and apply to most credit cards. This produces the 3% foreign transaction fee that you’ll see on a credit card disclosure. The company will then add the issuer fee, which is usually 2%. ![]() The network fee is charged by the credit card company itself, because it facilitates the currency conversion. One is the currency conversion fee (also called a “network fee”), and the other is an issuer fee. Though the foreign transaction fee on credit cards will be disclosed as a single percentage, usually 3%, it comprises two separate fees. What does a foreign transaction fee consist of? When you make a purchase involving a foreign currency, the credit card company will add the foreign transaction fee to the cost of your purchases. The foreign transaction fee will be stated in the credit card company’s “ Terms and Conditions” disclosure, which will be available to you when you apply for the card. ![]() This avoids the complications and fluctuations that can come from converting different foreign currencies using different agencies and institutions. It sets a single, flat fee consumers pay on purchase activity involving currency conversions. The alternative, widely employed by credit card companies, is a foreign transaction fee. It’s paid to the agency or organization that is facilitating the conversion. Typical cross-border transactions involve a conversion fee, which is the cost to convert one currency into another. Here’s why: Whenever one currency is converted into another, there are costs. This can even happen when you’re making online purchases from an individual or a business located in a foreign country. If the transaction takes place in a country or financial institution that normally uses a currency other than dollars, fees will be involved.
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