Money tends to be one of the biggest things people worry about when traveling abroad. However, there are many simple ways to help save money while traveling. One of them is to avoid foreign transaction fees.
What Is a Foreign Transaction Fee?
Foreign transaction fees are extra charges that your bank or credit card issuer will tack onto any transactions processed outside of your home country. This means that foreign transaction fees aren’t just something that you have to worry about when traveling.
If, for example, you buy something online from an international company, you might have to pay foreign transaction fees too. Most commonly, however, these fees are accrued while traveling.
The percentages vary by bank, but many banks and credit card providers charge about 3% on every single foreign purchase you make. If you’re spending several weeks or even months abroad, that extra charge can add up to hundreds or thousands of wasted dollars.
Ways to Avoid Foreign Transaction Fees
Luckily, there are options out there that will help you avoid these fees altogether.
Get a Credit Card with Zero Foreign Fees
While many of the major credit card companies do still charge foreign transaction fees, it’s becoming more and more common for companies to waive these fees.
Some examples of credit card issuers that don’t charge foreign fees are:
- Capital One
Check with your credit card provider to see if they charge foreign transaction fees. If they do, you may want to consider getting a credit card that doesn’t.
Keep your credit score in mind before doing this, however, and be certain that you will be able to keep up with credit card payments on both the new and any older cards that you have.
Join a Bank with No Foreign Transaction Fees
If you’re more of a debit card kind of person, foreign transaction fees will still apply to you. Check with your bank to see if they charge those kinds of fees, and think about creating a new account at a bank that doesn’t.
They may have an account type with no transaction fees that charge a larger monthly maintenance fee. It’s worth it to call around and get some information.
Additionally, you can ask or look up to see if your bank is partners with any international banks or a member of the Global ATM Alliance. If they are, then you can use partner banks’ ATMs while abroad without fear of being charged an ATM fee (though you may still have to pay foreign fees, depending on the bank).
Since ATM fees can sometimes be very steep—up to $4 or $5 per withdrawal—you will save a lot of money over time.
The best way to avoid foreign transaction fees is to do some research and form a relationship with a financial institution or credit card with zero fees abroad.
This way, you can focus on traveling and not worry about your bank pinching your pocket.
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