Ask an Expert: Will I Get Hit With Foreign Transaction Fees?

Photo (cc) by DoctorWho

A Money Talks News reader recently wrote me with this question:

I was just looking at your story on credit card fees charged by banks for having to convert currencies. My family and I are going to Costa Rica this year. I currently use my primary credit card for trips. It is an American Express Gold card. Will they charge me fees for my purchases made in Costa Rica? If so, what is my best option for getting around them?

Thanks for your help,

Dennis

My response

It sounds like you are going to have a lot of fun on a family trip to Costa Rica. I haven’t been there, but it is definitely on my list. But be careful with these foreign transaction fees. American Express will charge you an extra 2.7 percent on top of everything you buy there.

Another thing: These fees are not foreign conversion fees, they are foreign transaction fees. What’s the difference? Foreign transaction fees apply to all charges processed outside the United States, even if conducted in U.S. dollars. For example, Panama, Ecuador, and El Salvador all accept American currency as legal tender. Yet any card that charges a foreign transaction fee will charge it any time your card is accepted outside of the United States. And if you use your credit card for hotels, car rental, and meals for a family vacation, these charges can become pretty high. Even worse, if you make a purchase at home that is merely processed outside the United States, you may also be charged this fee.

So how can you avoid this? The first step is to look at the cards you have and figure out which ones charge a foreign transaction fee. Thankfully, a growing number of cards no longer have that fee, especially those marketed toward travelers. For example, some of my favorite fee-free cards include the Ink Bold and Sapphire Preferred cards from Chase, and any card from Capital One.

But if you don’t have a fee-free card already and you can’t get one in time for your trip, the very least you can do is to call your credit card issuer when you return and ask to have the fees refunded. These fees are a sensitive subject, and your bank may be willing to waive them to retain a good customer.

Have fun!

Note: While we attempt to be completely objective when reporting on credit cards, this site may be compensated by issuers when a reader applies for a credit card through the links within credit card stories or on our credit card search page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
13 Affordable Products for a Better Night’s Rest
13 Affordable Products for a Better Night’s Rest

These Amazon products can help you finally catch 40 winks — or more.

5 Awesome Places You Can Retire Overseas on $2,000 a Month or Less
5 Awesome Places You Can Retire Overseas on $2,000 a Month or Less

In this week’s podcast: tips on retiring overseas — from someone who’s been helping American expats for decades.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

7 Ways to Shop at Costco Without a Membership
7 Ways to Shop at Costco Without a Membership

You don’t necessarily need to join to get in on the warehouse store’s savings.

Never Put These 8 Things in a Microwave Oven
Never Put These 8 Things in a Microwave Oven

A microwave can be a busy cook’s best friend. But heating certain things in a microwave can cause disaster.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Mistakes Everyone Makes When Shopping on Amazon
9 Mistakes Everyone Makes When Shopping on Amazon

Are you losing money due to any of these missteps?

7 Changes Coming to Social Security and Medicare in 2021
7 Changes Coming to Social Security and Medicare in 2021

Recently, both Social Security and Medicare made some major announcements about benefits for 2021.

Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?
Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?

The rules are complicated when it comes to eligibility for survivors benefits.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

Longer Trips to This Type of Store May Raise Coronavirus Risk
Longer Trips to This Type of Store May Raise Coronavirus Risk

An airborne-disease expert recommends exiting these stores within 30 minutes.

5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

11 ‘Disposable’ Items You Should Be Reusing
8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

27 Things You Should Never Pay For — and How to Get Them for Free
27 Things You Should Never Pay For — and How to Get Them for Free

When you know the tricks, you can save big on all kinds of useful things that others pay for.

4 Tax Credits That Will Be More Generous in 2021
4 Tax Credits That Will Be More Generous in 2021

If you are eligible for these tax breaks, they will slash your federal income tax bill — dollar for dollar.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

15 Things You Can Get for Free in December
15 Things You Can Get for Free in December

December is here, which means it’s your last chance to take advantage of fabulous freebies in 2020.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.