A foreign transaction fee is a charge that credit card issuers may impose on purchases made in a foreign currency or on transactions that involve a foreign bank. This fee is typically a percentage of the total transaction amount, usually around 3%. It’s important to understand these credit card fees and how they can impact your international purchases.

Foreign transaction fees are separate from any currency conversion fees that may be charged by a merchant or the credit card network. They are assessed by the card issuer and can add up quickly, especially if you frequently travel abroad or make purchases from international vendors.

How Foreign Transaction Fees Work

When you make a purchase in a foreign currency using your credit card, the transaction must be processed through a foreign bank and converted into U.S. dollars. This is where the foreign transaction fee comes into play. The fee is assessed by your card issuer and appears on your credit card statement as a separate charge.

Some card issuers may refer to this fee by different names, such as an “international transaction fee” or a “currency conversion fee.” Regardless of the terminology used, the purpose of the fee remains the same: to cover the costs associated with processing transactions in foreign currencies.

Typical Foreign Transaction Fee Amounts

The amount of the foreign transaction fee varies by card issuer, but it typically ranges from 1% to 3% of the total transaction amount. For example, if your credit card has a 3% foreign transaction fee and you make a purchase for €100, you’ll be charged an additional $3 on top of the converted transaction amount.

Card Issuer	Typical Foreign Transaction Fee
American Express	2.7%
Bank of America	3%
Capital One	0%
Chase	3%
Citi	3%
Discover	0%

It’s worth noting that some credit cards, particularly those geared toward travelers, don’t charge any foreign transaction fees at all. If you frequently travel internationally or make purchases from foreign vendors, it may be worth considering one of these cards to save on fees.

Does the Chase Freedom Unlimited Have a Foreign Transaction Fee?

The Chase Freedom Unlimited is a popular cash back credit card that offers a flat 1.5% cash back on all purchases, with no annual fee. However, when it comes to using the card abroad, it’s important to be aware of the foreign transaction fee.

Chase Freedom Unlimited Foreign Transaction Fee Amount

Yes, the Chase Freedom Unlimited does charge a foreign transaction fee. The fee is 3% of the total transaction amount for transactions made outside of the United States. This means that if you use your Freedom Unlimited card to make a purchase in a foreign currency or through a foreign bank, you’ll be charged an additional 3% on top of the purchase price.

For example, if you use your Chase Freedom Unlimited to make a €100 purchase while traveling in Europe, you’ll be charged a foreign transaction fee of $3 (assuming an exchange rate of 1 EUR = 1 USD). This fee is in addition to any currency conversion fees that may be assessed by the merchant or the credit card network.

Comparing the Freedom Unlimited to Other Chase Cards

While the Chase Freedom Unlimited charges a foreign transaction fee, some other Chase credit cards do not. For example, the Chase Sapphire Preferred and the Chase Sapphire Reserve both have no foreign transaction fees.

Chase Credit Card	Foreign Transaction Fee	Rewards	Annual Fee
Chase Freedom Unlimited	3%	1.5% cash back on all purchases	$0
Chase Sapphire Preferred	0%	5x points on travel purchased through Chase, 3x points on dining, 2x points on all other travel purchases, 1 point per dollar on all other purchases	$95
Chase Sapphire Reserve	0%	10x points on hotels and car rentals purchased through Chase, 5x points on air travel purchased through Chase, 3x points on travel and dining, 1 point per dollar on all other purchases	$550

If you frequently travel internationally, it may be worth considering one of these cards instead of the Freedom Unlimited to avoid foreign transaction fees. However, keep in mind that these cards also have annual fees, so you’ll need to weigh the cost of the annual fee against the potential savings on foreign transaction fees and the value of any additional rewards or benefits offered by the card.

Alternatives to the Freedom Unlimited for International Travel

If you’re looking for a credit card to use while traveling internationally, there are several options available that don’t charge foreign transaction fees. These no foreign transaction fee credit cards can save you money on every purchase made abroad, and many of them also offer valuable rewards and benefits for travelers.

Best No Foreign Transaction Fee Travel Credit Cards

Here are some of the best travel rewards credit cards with no foreign transaction fees:

Chase Sapphire Preferred: Earn 5x points on travel purchased through Chase, 3x points on dining, and 2x points on all other travel purchases. The card also offers valuable travel protections and benefits, such as trip cancellation/interruption insurance and primary rental car insurance.
Capital One Venture Rewards Credit Card: Earn 2x miles on every purchase, with no limits or categories to track. Miles can be redeemed for travel purchases or transferred to a variety of airline and hotel partners.
American Express Gold Card: Earn 4x points at restaurants worldwide and on up to $25,000 per year in U.S. supermarket purchases, 3x points on flights booked directly with airlines or through amextravel.com, and 1x points on all other purchases. The card also offers dining and travel credits that can help offset its annual fee.

Cash Back Credit Cards Without Foreign Transaction Fees

If you prefer cash back rewards to points or miles, there are also several cash back credit cards that don’t charge foreign transaction fees:

Capital One Quicksilver: Earn an unlimited 1.5% cash back on every purchase, with no categories or limits to track. The card also offers a sign-up bonus and a 0% intro APR period on purchases and balance transfers.
Discover it Cash Back: Earn 5% cash back on rotating quarterly categories (up to $1,500 in purchases per quarter, then 1%) and 1% cash back on all other purchases. Discover also offers a unique feature that matches all the cash back you earn during your first year as a cardholder.

When choosing a credit card for international travel, consider factors such as rewards, benefits, annual fees, and whether the card charges foreign transaction fees. By selecting a card that aligns with your spending habits and travel preferences, you can maximize your rewards and savings while minimizing fees.

Tips for Avoiding Foreign Transaction Fees

If you want to avoid paying foreign transaction fees while traveling abroad or making purchases from international merchants, there are several strategies you can use. By planning ahead and being mindful of your payment methods, you can save money on currency conversion and other fees associated with international transactions.

Use a No Foreign Transaction Fee Credit Card

The simplest way to avoid foreign transaction fees is to use a credit card that doesn’t charge them. As mentioned earlier, there are several travel credit cards and cash back cards that waive these fees, making them ideal for use abroad.

When choosing a no foreign transaction fee credit card, consider factors such as rewards rates, sign-up bonuses, annual fees, and additional travel benefits. Some cards may offer perks like travel insurance, airport lounge access, or statement credits for travel purchases, which can add value to the card beyond just saving on fees.

Pay in the Local Currency

When making purchases abroad, you may be given the option to pay in either the local currency or your home currency (such as U.S. dollars). In most cases, it’s best to choose the local currency.

If you choose to pay in your home currency, the merchant will perform a dynamic currency conversion, which often comes with a higher exchange rate and additional fees. By paying in the local currency, you’ll avoid these extra charges and allow your credit card issuer to perform the currency conversion at a more favorable rate.

Withdraw Cash from ATMs Wisely

If you need to withdraw cash while traveling abroad, be mindful of ATM fees and foreign transaction fees. Many banks charge fees for using out-of-network ATMs, and these fees can be even higher for international transactions.

To minimize fees, consider using a debit card from a bank that waives or reimburses ATM fees worldwide, such as Charles Schwab or Fidelity. Alternatively, you can withdraw larger amounts of cash less frequently to minimize the number of transactions and associated fees.

By using a no foreign transaction fee credit card, paying in the local currency, and being strategic about cash withdrawals, you can save money on fees and make the most of your international purchases.

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