A smiling man walks down a street while traveling holding a shopping bag and a cell phone.

How to Avoid Foreign Transaction Fees

5 min read

Last Updated: January 28, 2026

Table of contents

Key Takeaways

Credit cards may be a safe and convenient payment option for international travel.
Some credit cards charge a foreign transaction fee, an extra for purchases you make in another country or with a foreign merchant.
Discover® Cards have no foreign transaction fee, which may allow you to save on each international purchase.

When you’re traveling to a foreign country or shopping online from an international seller, your credit card may be a convenient option at checkout. Credit cards often make shopping easier and safer with a foreign merchant than other payment methods, like debit cards or foreign cash. But after you use your card for a transaction in a foreign currency, you might find that your international payments are more expensive than you expected.

The higher cost may be the result of a foreign transaction fee from your credit card issuer. Every extra fee increases the cost of your trip or purchase, so it helps to know how to avoid foreign transaction fees when you travel. Understanding how foreign transaction fees work may help you avoid them when possible.

What is a foreign transaction fee?

A foreign transaction fee is a surcharge that you pay for transactions in a foreign currency. The additional fee covers the cost of converting currency for your credit card issuer and the payment processor or card network.

Foreign transaction fees may apply when you shop while traveling abroad or online from a seller outside the United States, regardless of what you buy. You may have a card issuer, like Discover, that has no foreign transaction fee.

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How much do foreign transaction fees cost?

Foreign transaction fees may differ from one card issuer to the next, like an ATM fee often varies across banks. But typically, a foreign transaction fee comes out to around 1% to 3% of the total transaction amount.

The extra cost may seem insignificant at face value, but when you consider the number of transactions you might have on a typical vacation day, the fees add up quickly.

You might pay for two meals, transportation like taxis or trains, tickets to attractions, and souvenirs, all in another currency. If your vacation already costs you thousands of dollars, foreign transaction fees may make a big dent in your budget.

How do foreign transaction fees work?

If your credit card issuer or financial institution charges foreign transaction fees, the fee applies to every credit or debit card payment you make outside the United States or in another currency, including any purchase you make during layovers. The extra fee may also apply to an international purchase you make online with a foreign merchant to cover the currency transaction fee.

The good news for travelers is that not all credit cards charge foreign transaction fees.

Discover Network is accepted at millions of locations across the globe¹ and has no foreign transaction fee.

Check your card’s terms and conditions to see if your card charges foreign transaction fees and, if so, what the fee percentage is.

How to avoid paying foreign transaction fees

If you have an international vacation coming up or want to make a purchase from a store in another country, you may want to know a few tips for avoiding foreign transaction fees.

The easiest approach may be using a credit card without foreign transaction fees, but there are other alternatives to consider, as well.

Did you know?

If you take frequent vacations or spend a lot of time visiting loved ones abroad, you might want to consider a travel credit card. With a travel card, you may redeem your rewards for purchases that make your journeys easier.

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Pay with cash

Some travelers may opt for a cash-only approach, but this has its own drawbacks. If you lose your cash, you may not be able to replace it. Additionally, a cash withdrawal from your checking account or savings account abroad may be costly due to the currency conversion fee and cash withdrawal fee at a foreign ATM. Credit cards are not only generally safe and convenient to travel with, but they may also offer fraud protection if they’re lost or stolen.

Pay in the local currency

Some merchants may give you the option to pay either in their local currency or your own home currency.

It may seem convenient to pay in the currency you’re more comfortable with, but it’s likely a better idea to pay in the local currency. This is because the merchant accepting your home currency payment may charge an additional fee for a process known as dynamic currency conversion (DCC), according to the General Services Administration.

DCC converts the foreign currency rate to your local rate, so you know what you’re spending in U.S. dollars. This may sound great at first, but a DCC fee may add to your costs significantly, especially if you’re also covering a foreign transaction fee.

The bottom line

A credit card with no foreign transaction fees may be a convenient option during your trips around the world. A rewards credit card from an issuer like Discover may even allow you to earn cash back on your international transactions. With the right credit card, you may save money and make the most of your purchases, even when you’re abroad.

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