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After returning from a trip overseas, you review the charges on your credit card statement—only to discover that your credit card issuer charged you an extra fee for every purchase you made abroad. The good news is that you can avoid this situation next time by learning the ins and outs of foreign transaction fees.

What Are Foreign Transaction Fees?

Foreign transaction fees may apply for two types of transactions:

  1. Purchases you make outside the U.S.
  2. Online purchases from a non-U.S. retailer that uses an overseas bank to process transactions

On many cards, foreign transaction fees are as high as 3 percent of the purchase amount. If you use your card overseas frequently, choosing a card with no foreign transaction fees could translate to big savings. Here’s an example: You charged $2,500 on your card while you were in Italy for two weeks. With a 3 percent foreign transaction fee, you would pay an extra $75 in fees.

Try these tips to help you avoid fees the next time you travel abroad:

  • Review your card’s terms and conditions. Find out if your card has a foreign transaction fee (and how much it is) by looking at the terms and conditions. Or, you can call the number on the back of your credit card to ask about foreign transaction fees.
  • Consider how you plan to use the card. If you’re a frequent traveler or you have plans to spend time overseas, it may be smart to have a credit card with no foreign transaction fees in your wallet. If you have multiple cards—some with foreign transaction fees and some without—plan to only use the cards without fees when you’re traveling outside the country.
  • Apply for a travel rewards card. Many travel cards have no foreign transaction fees and offer other travel rewards. Navy Federal’s premier travel card, the Flagship Rewards card, lets you redeem the points you earn for flights, hotels and other travel-related expenses. Like all Navy Federal Credit Cards, you’ll also pay no foreign transaction fees.

Paying close attention to foreign transaction fees can pay off. When you choose a credit card from Navy Federal Credit Union, you’ll enjoy a competitive rate, no fees for balance transfers and no foreign transaction fees. Use our credit card comparison tool to find a card that fits your lifestyle.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.