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Traveling abroad? Know What Exchange Rates Your Credit Card Charges

Traveling abroad? Know What Exchange Rates Your Credit Card Charges

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Dec 06, 2018. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

There’s a lot of planning involved when traveling abroad, from booking airfare and hotels to figuring out what sites you want to see. But one thing that travelers sometimes don’t calculate is how much it could cost every time they swipe their credit card.

No one wants to see a nasty surprise — a pile of expensive fees — on credit card or bank statements when returning home from a trip abroad, but it happens all too often if you don’t know what to expect.

Before leaving the country, you should know what fees your credit or debit cards charge, where you’ll get foreign currency while traveling, which outlets (such as airport kiosks or local ATMs) offer the best exchange rates and how many of these options come with extra fees.

Exchange rates for top currencies

The good news is you can see what exchange rate you’ll be offered when you use a Mastercard® or Visa® for foreign purchases by checking online. Their rates are always better when you compare them with currency exchange companies such as Travelex (either online or at the airport).

Below are the rates we found as of Nov. 28, 2018, for exchanging dollars into popular foreign currencies with the top credit card issuers, along with exchange company Travelex.

Mastercard Visa Travelex
British Pounds 0.785 0.786 0.71
Euros 0.887 0.887 0.81
Japanese Yen 114.03 113.85 101.19
Mexican Pesos 20.50 20.50 18.14
Canadian Dollar 1.336 1.333 1.18

 

Here are sites to check the exchange rates on foreign transactions your card will use in real time:

American Express doesn’t have a dynamic site where cardmembers can check exchange rates.

Beware of dynamic currency conversion

When it’s time to pay with a credit or debit card when traveling abroad, many merchants will often offer U.S.-based credit card users the choice to pay in the local currency or in U.S. dollars. Choosing dollars and not having to worry about conversion rates may, at first glance, seem like a no-brainer.

But if you look at the fine print on your receipt, you’ll discover that you’re paying a premium when choosing to pay in U.S. dollars, which is called dynamic currency conversion (DCC). Merchants can use a conversion rate higher than the going rate, even profiting from the transaction. And if your card charges a foreign transaction fee on top of that (which typically ranges from 1% to 3%), you may end up paying dearly for overseas purchases.

So, when paying with a card while traveling abroad, it’s always best to ask that your purchase is processed using the local currency rather than U.S. dollars, as your card issuer will always provide the better exchange rate without incurring any dynamic currency conversion fees.

Foreign transaction fees

The savviest travelers know to always pack a credit card or two that doesn’t assess a fee for foreign purchases. And if you don’t have one, it’s best to apply for one before your trip. Some no foreign transaction fee cards charge an annual fee as well, but not all do.

The travel perks that come with some annual-fee cards may balance out, especially if you regularly spend on the card outside of the country. Below is our list of some credit cards that don’t charge foreign transaction fees, broken down by those that come with and without annual fees:

No foreign transaction fee cards with $0 annual fee

  • Earn unlimited 1.5 points per $1 spent on all purchases

  • 0% Introductory APR on purchases for 12 billing cycles

  • 16.74% - 24.74% Variable APR on purchases and balance transfers

Highlights
  • Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire
  • 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases
  • Use your card to book your trip how and where you want - you're not limited to specific websites with blackout dates or restrictions
  • Redeem points for a statement credit to pay for flights, hotels, vacation packages, cruises, rental cars, or baggage fees
  • Comes with chip technology for enhanced security and protection at chip-enabled terminals
  • 0% Introductory APR for 12 billing cycles for purchases. After the intro APR ends, 16.74% - 24.74% Variable APR will apply
  • If you're a Preferred Rewards member, you can earn 25% - 75% more points on every purchase

See additional details for Bank of America® Travel Rewards Visa® credit card

More Info

  • Unlimited 1.5% Cash Back on every purchase, every day

  • 0% for 15 Months on Purchases and Balance Transfers

  • No minimums for redeeming and cash back won't expire for the life of the account

Highlights
  • One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening
  • Earn unlimited 1.5% cash back on every purchase, every day
  • No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
  • 0% intro APR on purchases for 15 months; 15.74%-25.74% variable APR after that
  • 0% intro APR on balance transfers for 15 months; 15.74%-25.74% variable APR after that; 3% fee on the amounts transferred within the first 15 months
  • Pay no annual fee or foreign transaction fees

See additional details for Capital One® Quicksilver® Cash Rewards Credit Card

More Info

  • 1.25 Miles per dollar on every purchase, every day

  • 0% intro on purchases for 12 months

  • 13.74% - 23.74% (Variable)

Highlights
  • $0 annual fee and no foreign transaction fees
  • Earn a bonus of 20,000 miles once you spend $1,000 on purchases within 3 months from account opening, equal to $200 in travel
  • Earn 1.25X miles on every purchase, every day
  • Earn 10X miles on thousands of hotels, through January 2020; learn more at hotels.com/venture
  • Transfer your miles to over 12 leading travel loyalty programs
  • Enjoy 0% intro APR on purchases for 12 months; 13.74% - 23.74% variable APR after that
  • Travel when you want with no blackout dates and fly any airline, stay at any hotel, anytime
  • Miles won't expire for the life of the account and there's no limit to how many you can earn

See additional details for Capital One® VentureOne® Rewards Credit Card

More Info

  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically*

  • Earn 5% cash back at different places each quarter up to the quarterly maximum, when you activate*

  • Any amount, any time. Cash back rewards never expire*

Highlights
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
  • Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Redeem cash back any amount, any time. Rewards never expire.
  • Use your rewards at Amazon.com checkout.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • No annual fee.
  • See Rates & Fees

See additional details for Discover it® Cash Back

More Info

  • We'll match all the Miles you've earned at the end of your first year.*

  • 1.5 Miles per $1 Spent*

  • Redeem your Miles as a statement credit towards travel purchases*

Highlights
  • UNLIMITED BONUS: Discover will match ALL the Miles you’ve earned at the end of your first year, automatically. For example, if you earn 35,000 Miles, you get 70,000 Miles. That’s $700 towards travel! The more you earn, the more you get.
  • Earn unlimited 1.5x Miles for every dollar spent on all purchases - with no annual fee.
  • No Blackout Dates. Simply pay for travel purchases like airlines, hotels, rental cars, and more with your Discover it® Miles card.
  • Miles Pay You Back. Easily redeem Miles as a statement credit for travel purchases. Or get cash.
  • Freeze your account in seconds with an on/off switch either on the mobile app or website to prevent new purchases, cash advances, and balance transfers.
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • See Rates & Fees

See additional details for Discover it® Miles

More Info

No foreign transaction fee cards with an annual fee†

After any introductory period, as specified by individual card offers above.

**The information related to this offer has been collected by CompareCards and has not been reviewed or provided by the issuer of this card prior to publication. This offer and/or promotion may have since changed, expired, or are no longer available.

Where to get cash

When leaving the U.S., it’s best to have some foreign cash available, since there are always places that won’t take your credit or debit cards. And it’s best to get your cash before you leave, but sometimes that isn’t always possible.

Almost all international airports have foreign currency kiosks and ATMs. But because the exchange rates are so low — and some do charge commissions and transaction fees — you should only use them in an emergency or if you don’t mind paying to withdraw your own money.

If you decide to use an international ATM, check with your bank before you leave to see if it’s on a specific network. For example, Bank of America is on the CIRRUS network. As long as you use ATMs on that network, you won’t be charged each time you withdraw from a non-network ATM. But it does charge 3% of the dollar amount withdrawn for foreign currency at all ATMs. Also, know that some ATMs have daily withdrawal limits.

Like their U.S. counterparts, foreign banks also tend to have higher foreign currency conversion rates than credit cards and currency exchange companies such as Travelex, so look at them as an option when it comes time to convert your dollars. But do your research on these banks, making sure they can convert your dollars and know what fees may be involved.

The bottom line

It pays to do your homework on exchange rates and fees before leaving the U.S. A quick call to credit card and bank customer service departments could save you a lot of money on fees. Here’s a checklist on what you need to do:

  • Bookmark your credit card’s currency exchange website so that you can see rates on the fly in real time.
  • Make sure you know what network your bank’s debit card is in before you leave so that you can avoid out-of-network fees for withdrawals.
  • Either get your foreign currency before you depart or go to a local bank or in-network ATM to grab it.
  • Use foreign currency exchange kiosks and ATMs, which come with lower conversion rates and fees, only as a last resort.

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