It can be expensive to travel overseas, so savvy consumers will be sure to avoid foreign transaction fees when traveling abroad. This is a charge assessed on top of your total account spending, purchases by purchase, while in a location your credit card deems foreign. This can be anywhere from a few percentage points up to several percent of your total spending. They can be as low as 2% and as high as 4%, depending on the credit card issuer and the card within their portfolio. This amount adds up quickly if you are traveling for a long time or if you just end up charging a lot of purchases to your card.
A foreign transaction fee can be assessed in any location your credit card company has classified as a foreign country. Not always do you have to be in a foreign location though, if you make a purchase from a company that has its principal location in a foreign country, you may be assessed the foreign transaction fee. For example, if you buy something online from a merchant who operates in a different country, you’ll more likely than not get hit with this by your credit card company.
Many consumers benefit from credit cards that offer no foreign transaction fees, but not all cards offer this. Some other credit cards may offer other incentives to offset the foreign transaction fee that they charge, so you must carefully choose a card the fits you best.
Other credit card companies may offer a discounted or no foreign transaction fee for different countries, so you should verify what countries the foreign transaction fee applies to before you make your final decision on a new credit card. This is rare, so but it does happen occasionally depending upon the credit card you have.
If you are a consumer who tends to travel frequently, you may be aware of, or may be a good candidate for a card that charges an annual fee, in return for not getting hit with the charges incurred for making international purchases.
If you are considering a card that offers something like this annual fee, you must carefully determine if you will benefit from paying that fee every year. If you are a frequent traveler who encounters foreign transaction fees with some regularity, it could be wise to investigate a card that offers something like this.
But, if you rarely travel to foreign locations, you may be better off just paying the foreign transaction fees, instead of paying the annual fee. To make this decision and weigh your possible options, you must have some idea as you how much you will be traveling annually.
Foreign transaction fees can add up quickly, they can also come in the form of a very high percentage of your total spending, so it can be cost prohibitive to keep paying foreign transaction fees.
Unless you are a frequent traveler, where it is in your best interest to get a credit card that charges annual fees to offset foreign transaction fees, it will most likely be best if you search for a credit card offer with no foreign transaction fees. Then you can rest assured knowing that if, and when, you do travel you will not have to worry about being hit with additional fees on your credit card.