Foreign transaction fee

What It Means

A foreign transaction fee is a charge your card provider adds when you use the card in another country or pay in a foreign currency. It's usually a percentage of each purchase, cash withdrawal or other transaction, and the CFPB notes it's sometimes called a currency conversion fee. On a credit card, part of it can come from the card issuer and part from a third party that converts the currency, such as the card network. Your card's agreement or fee schedule says whether it charges one and at what rate.

How It Sounds at Home

• "Don't use that card in Canada, it charges three percent."
• "I paid a fee on every coffee in Paris."
• "Does this card have foreign transaction fees?"

The Breakdown

Worked example. The Riveras spend a week in Mexico. They put $1,500 of hotel, meals and tours on a card and take out the equivalent of $300 in pesos at an ATM. Their card's terms list a 3% foreign transaction fee, an example rate.

What the result means. The fee grows with every dollar spent, so a long or expensive trip carries a bigger bill. A card with no foreign transaction fee brings that line to $0, although ATM feesATM feeA charge for using an ATM, which can come from the machine's owner, from your own bank for using a machine outside its network, or from both. See more from the machine's owner or your own bank may still apply to cash.

Where it can show up

• Purchases made while you're in another country
• Cash withdrawals in a foreign currency
• Online orders from a store that bills you in another currency

Where to find your rate

• A credit card's agreement or fee schedule
• A prepaid card's list of fees
• Your bank's fee schedule for a debit card

Good to Know

The CFPB's prepaid cards key terms describe a foreign transaction fee as one the card provider charges for use in a foreign country or in a foreign currency, usually a percentage of the transaction. For credit cards, the CFPB's official commentary to Regulation Z (12 CFR 1026.4) treats the fee as whatever you're charged above the dollar amount figured at a conversion rate outside the issuer's and the converting party's control, and says the issuer, a third party such as the card network, or both can impose it. Read your card agreement or fee schedule before you travel or order from a store that bills in another currency.

Related Terms and Categories

• ATM fee

  A charge for using an ATM, which can come from the machine's owner, from your own bank for using a machine outside its network, or from both.

• Travel budget

  A plan for how much a trip will cost in total, split into travel, lodging, food, activities and a cushion, set before you book.

• Credit card rewards

  Cash back, points or miles a credit card pays you on your spending, worth only what the program lets you redeem them for.

• Annual fee

  A yearly charge some credit cards bill simply for keeping the account open, listed in the card's Schumer box and charged again each anniversary.

• Monthly maintenance fee

  A charge a bank or credit union takes each month for keeping a checking, savings or money market account open, often waived if you meet set conditions.

• Travel insurance

  A policy bought for a trip that can repay prepaid costs if you cancel for a covered reason, and pay for medical care or evacuation while away.

Household money and budgeting