![]() How much are foreign transaction fees?įoreign transaction fees are common and apply to most credit cards. This produces the 3% foreign transaction fee that you’ll see on a credit card disclosure. The company will then add the issuer fee, which is usually 2%. The network fee is charged by the credit card company itself, because it facilitates the currency conversion. One is the currency conversion fee (also called a “network fee”), and the other is an issuer fee. Though the foreign transaction fee on credit cards will be disclosed as a single percentage, usually 3%, it comprises two separate fees. What does a foreign transaction fee consist of? When you make a purchase involving a foreign currency, the credit card company will add the foreign transaction fee to the cost of your purchases. ![]() The foreign transaction fee will be stated in the credit card company’s “ Terms and Conditions” disclosure, which will be available to you when you apply for the card. This avoids the complications and fluctuations that can come from converting different foreign currencies using different agencies and institutions. It sets a single, flat fee consumers pay on purchase activity involving currency conversions. The alternative, widely employed by credit card companies, is a foreign transaction fee. It’s paid to the agency or organization that is facilitating the conversion. Typical cross-border transactions involve a conversion fee, which is the cost to convert one currency into another. Here’s why: Whenever one currency is converted into another, there are costs. This can even happen when you’re making online purchases from an individual or a business located in a foreign country. If the transaction takes place in a country or financial institution that normally uses a currency other than dollars, fees will be involved.
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