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Paying abroad with a credit card: foreign transaction fees and the 'pay in dollars?' question

A card's foreign transaction fee is set by the issuer and shown in its rates-and-fees table. On the cards compared here it is none, 2.7% or 3%. Paying in dollars abroad is a different charge, called dynamic currency conversion, in which the merchant's provider sets the exchange rate. Both Visa and Mastercard say you are free to decline it and pay in the local currency.

Compiled from official sources Published Oct 11, 2026 Last reviewed How we research
A currency exchange office with rate boards in a station concourse
Contents9 sections

Key takeaways

  • Under Regulation Z commentary, a foreign transaction fee can apply to purchases in a foreign currency, to purchases in U.S. dollars made outside the U.S., and to purchases from a foreign merchant.⁠1
  • Among the cards cited here, the Amex Blue Cash Everyday and Blue Cash Preferred charge 2.7%, the Chase Freedom Unlimited, Citi Double Cash, Bank of America Customized Cash Rewards, Wells Fargo Active Cash and U.S. Bank Cash+ charge 3%, and Capital One says it charges no foreign transaction fees.⁠7⁠8⁠10⁠12⁠14⁠16⁠18⁠19
  • If you choose to pay in your home currency, the merchant's acquirer sets the exchange rate. If you pay in the local currency, your card issuer converts the amount.⁠5
  • Visa requires merchants to show both amounts, the exchange rate and any markup, and says they must not choose the currency for you.⁠3

Paying with a U.S. credit card abroad can involve two separate costs. The first is the card issuer’s foreign transaction fee, a fixed percentage that appears in the card’s rates-and-fees table.⁠2⁠6 The second applies only if you accept a merchant’s or ATM’s offer to charge you in U.S. dollars. The industry calls that offer dynamic currency conversion (DCC).⁠3 You can see the first cost before you apply for a card. The second is decided at the terminal.

What counts as a foreign transaction fee

Federal rules treat a foreign transaction fee as a finance charge.⁠1 Regulation Z’s official commentary says that any charge on a credit cardholder for a purchase or cash advance made outside the United States, with a foreign merchant, or in a foreign currency is a finance charge.⁠1 The commentary lists three situations: transactions in a foreign currency converted to U.S. dollars, transactions in U.S. dollars made outside the U.S., and transactions with a foreign merchant (for example through its website), in either currency.⁠1 Its example is a purchase in Bermuda paid in U.S. dollars, on which the issuer may still charge a fee because the purchase took place outside the United States.⁠1

Part of the fee can come from the card network.⁠1 In the commentary’s example, the network imposes 1 percent and the issuing bank adds 2 percent, so the consumer pays a 3 percentage point foreign transaction fee in total.⁠1 A network fee counts only if the issuer passes it directly to the consumer.⁠1 Issuers disclose the fee in the table that comes with an application.⁠2 If the card has no such fee, the issuer can either leave the row out or show “Foreign transaction” with “none”.⁠2

Which cards charge 0%, 2.7% or 3%, and how issuers word it

The wording of the fee row varies by issuer, so read the exact phrase. The rates below come from each card’s own terms. Our no foreign transaction fee page compares the cards in our data.

Foreign transaction fee wording on selected cards, as stated in issuer terms
Card Fee Issuer wording
Amex Platinum 0% “Foreign Transaction None”⁠6
Amex Blue Cash Everyday 2.7% “2.7% of each transaction after conversion to US dollars”⁠7
Amex Blue Cash Preferred 2.7% “2.7% of each transaction after conversion to US dollars”⁠8
Chase Sapphire Preferred 0% “Foreign Transactions None”⁠9
Chase Freedom Unlimited 3% “3% of the amount of each transaction in U.S. dollars”⁠10
Citi Strata Premier 0% “Foreign Purchase Transaction None”⁠11
Citi Double Cash 3% “3% of each purchase transaction in U.S. dollars”⁠12
Bank of America Travel Rewards 0% “Foreign Transaction None”⁠13
Bank of America Customized Cash Rewards 3% “3% of the U.S. dollar amount of each transaction made in a foreign currency”⁠14
Wells Fargo Autograph 0% “Foreign Currency Conversion/Foreign Transaction None”⁠15
Wells Fargo Active Cash 3% “3% of each transaction converted to U.S. dollars”⁠16
U.S. Bank Altitude Connect 0% “Foreign Transaction None”⁠17
U.S. Bank Cash+ 3% “3% of each foreign transaction”⁠18

Capital One’s help center says, “Capital One doesn’t charge foreign transaction fees,” and that there are none on purchases made outside the United States.⁠19 The Discover by Capital One card agreement says the issuer does not “charge any currency conversion Fees”.⁠20 The agreement does not name individual cards. Our data relies on these two issuer-wide statements for cards such as Discover it Cash Back.⁠19⁠20

The wording also differs in scope. Bank of America applies its 3% to transactions “made in a foreign currency”.⁠14 U.S. Bank applies its fee to “each foreign transaction”.⁠18 Regulation Z allows a fee on dollar-denominated purchases abroad or with foreign merchants.⁠1 American Express adds a caution to the Platinum’s no-fee statement: “there may be circumstances where ATMs or merchants charge a fee on foreign transactions.”⁠6

How your purchase gets converted to dollars

When you pay in the local currency, the conversion happens after the sale. Capital One says it converts a foreign-currency transaction into U.S. dollars automatically, and that the rate on the processing date may differ from the rate on the transaction date shown on the statement.⁠19 The Discover by Capital One agreement says the payment card network converts the transaction using “its own currency conversion procedures”, and that the issuer does not adjust the exchange rate.⁠20 For rates, Mastercard points cardholders to its currency conversion tool, which draws on multiple market sources including Bloomberg, Reuters and central banks.⁠4 For questions about conversion charges on a specific card, it tells them to contact the card issuer.⁠4

Dynamic currency conversion: the “pay in dollars?” prompt

Visa says that when a merchant offers DCC, you may be given the option to pay in your home currency, “which includes exchange rate and additional fees”.⁠3 It notes that an ATM can make the same offer and bill a withdrawal in your home currency.⁠3 Mastercard’s guide for acquirers states who sets the rate. If you choose the local currency, the amount is converted at the rate provided by your card issuer.⁠5 If you choose your billing currency, your account is debited at the rate offered by the acquirer.⁠5 With DCC, the receipt shows both currencies and the statement shows no conversion details. Without DCC, the issuer converts the amount and the statement shows full conversion details.⁠5

Mastercard’s consumer FAQ says conversion at the terminal “comes at a cost and incurs additional currency conversion fees.” It advises letting your own bank do the conversion and declining the DCC offer.⁠4 Regulation Z commentary says a card issuer does not have to disclose a fee charged by a merchant that performs the currency conversion itself, so the issuer’s disclosures need not show that markup.⁠1

At the terminal: steps the card networks describe

  1. Check what the screen shows

    Visa requires merchants and ATMs to display the amount in both the local currency and your currency, with both currency symbols, the exchange rate, and any fees or markup.⁠3

  2. Make the choice yourself

    Visa says merchants and ATMs should let you accept or decline conversion and must not choose for you.⁠3 They also should not use language or procedures, such as a different font size or color, to influence the decision.⁠3 Mastercard’s rules say no conversion method can be the default and DCC must not be selected in your absence.⁠5

  3. Select the local currency to have your issuer convert

    Mastercard recommends letting your own bank do the conversion and declining the conversion option.⁠4 If you do not explicitly choose your billing currency, Mastercard’s standards require the transaction to be processed in the local currency.⁠5

  4. Watch for DCC applied in your absence

    Mastercard’s guide describes a hotel that applied DCC two months before the guest arrived.⁠5 It says this “automatic DCC is strictly prohibited” and that cardholders have chargeback rights in that case.⁠5

  5. Report problems to your issuer

    If the required details are missing or you feel pressured, Visa recommends declining the offer and reporting it to your card issuer.⁠3 Mastercard says the issuer has a chargeback right if you were not given a currency choice.⁠5 Mastercard also says that refunds of DCC transactions must be made in the original currency.⁠5

Cash, ATMs and currency exchange counters

Mastercard advises using a credit card at a foreign ATM only if it is your only option.⁠4 It explains that an ATM withdrawal on a credit card is a cash advance, on which fees are highest and finance charges might start immediately, with no grace period.⁠4 Capital One cards do not need a PIN for purchases outside the U.S. Cardholders who want a cash advance PIN for emergencies can request one after logging in.⁠19

Some issuers do not treat buying foreign currency with the card as a purchase.⁠12⁠14 Bank of America lists foreign currency obtained from a non-financial institution as a Cash Equivalent cash advance.⁠14 Citi says foreign currency purchases are not purchases and do not earn points.⁠12 Mastercard’s FAQ says foreign currency is usually better obtained at your destination, because institutions at home pass on the cost of transporting, securing and storing it.⁠4

Cards in this article

Sources

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