How to Avoid Foreign Transaction Fees While Traveling

If you’re planning an international trip, one of the easiest ways to waste money is by paying foreign transaction fees every time you swipe your card. These hidden charges — often around 3% per purchase — can silently add up over the course of a vacation, especially when paying for hotels, meals, or excursions.

The good news? Avoiding these fees is completely possible with the right strategy. Here’s how to keep your hard-earned money in your pocket while traveling abroad.

What Are Foreign Transaction Fees?

Foreign transaction fees (also known as currency conversion fees) are extra charges added by your bank or credit card issuer when you make a purchase outside your home country. These fees generally come from two sources:
1. The card network (Visa, MasterCard, etc.)
2. Your issuing bank

Together, they typically charge 2–3% per transaction — even for online international purchases made in another currency.

Why Do They Matter?

Let’s say you spend $2,000 abroad during a two-week vacation. A 3% fee would add $60 in extra charges — money you could have spent on better meals, transportation, or a unique souvenir.

Step 1: Use a Credit Card with No Foreign Transaction Fees

This is the single most effective way to avoid international fees.

Top No-Foreign-Transaction-Fee Cards:
- Chase Sapphire Preferred
- Capital One Venture Rewards
- American Express Gold or Platinum
- Bank of America Travel Rewards
- Citi Premier Card

Step 2: Avoid Dynamic Currency Conversion (DCC)

When paying abroad, some merchants will offer to charge your purchase in your home currency instead of the local one. This is called Dynamic Currency Conversion — and it’s a trap.

Always choose to pay in local currency.

Step 3: Use Travel-Friendly Debit Cards for Cash Withdrawals

While using credit is safer, sometimes you need cash. Use a debit card designed for international travel.

Best Travel Debit Cards:
- Charles Schwab Bank High Yield Investor Checking
- Fidelity Cash Management Account
- SoFi Checking & Savings

Step 4: Don’t Exchange Currency at the Airport

Airport currency exchange counters are notoriously overpriced. Use an ATM or visit a local bank in the city center instead.

Step 5: Set Travel Notifications with Your Bank

Notify your bank before traveling to avoid frozen cards due to suspicious activity. Many apps now let you do this online.

Step 6: Enable Digital Wallets

Apps like Apple Pay and Google Pay work internationally and offer secure, fee-free payments when connected to the right card.

Step 7: Monitor Your Transactions

After your trip, check your statements for errors, hidden fees, or duplicate charges. Use tools like Mint or Expensify for expense tracking.

Step 8: Be Cautious with Prepaid Travel Cards

Prepaid cards may charge extra fees and offer poor exchange rates. Use credit or debit cards with clear international benefits instead.

Bonus: Avoid ATM Fees Altogether

Look for global ATM alliances or networks like Allpoint or Cirrus to avoid fees. Use your bank’s ATM locator for guidance.

Final Thoughts

Traveling abroad shouldn’t mean spending more than necessary — and avoiding foreign transaction fees is one of the easiest financial wins. By using the right credit card, avoiding currency traps, and planning your withdrawals smartly, you can save hundreds of dollars over time.