Spending abroad

How to avoid foreign transaction fees

It's the most-paid, least-noticed travel cost: a small surcharge on everything you buy overseas. Here's where it comes from and how to stop paying it.

What the fee actually is

When you pay in another currency, most banks add a foreign transaction fee — typically somewhere around 2–3% of the purchase. It's charged on card payments and cash withdrawals alike, and it's usually folded straight into your statement, so it never shows up as a line you'd question. On a two-week trip, a few percent on flights, hotels, meals and shopping quietly adds up to a real number.

Where it hides

• Everyday card spend abroad — the fee applies whether you tap, insert or pay online to an overseas merchant.
• Cash machine withdrawals — often the foreign fee plus a cash-advance fee and interest from day one.
• "Pay in your home currency?" — the screen that offers to bill you in your own currency at the till or ATM. This is dynamic currency conversion, and it almost always uses a worse exchange rate. Always choose to pay in the local currency.

The simple fixes

• Check your card's fee before you go. It's in the card's summary of charges, usually listed as a "non-sterling" or "foreign transaction" fee. Knowing the number is half the battle.
• Carry a no-fee card for travel. Plenty of cards charge 0% on foreign spending. If you have one, it's almost always the right card to reach for abroad — even a modest rewards card with a fee rarely beats a no-fee card once the surcharge is in.
• Always pay in the local currency to sidestep dynamic currency conversion.
• Prefer card over cash where you can — a no-fee card at a good rate usually beats an airport bureau de change, and you carry less.
• Tell your bank you're travelling if it still asks, so a legitimate purchase abroad isn't blocked.

The one-line version

Know your card's foreign fee, keep a 0% card for trips, and always pay in the local currency. That combination removes almost all of the surcharge for most travellers.

General information for travellers, not financial advice. Fees, rates and card terms change and vary by issuer and country — always check the current terms of your own card before you rely on them.