Capital One Foreign Transaction Fees Explained

Last Updated on July, 2024

Do you know what happens when you use your credit card outside the U.S.? 

Let’s talk about it.

When you buy something from a seller in another country, your bank might charge you an extra fee called a foreign transaction fee. But not all banks do this. Capital One, for example, doesn’t charge foreign transaction fees on its U.S. credit cards.

This means that if you use a Capital One credit card outside the U.S., you won’t pay a currency conversion fee. Keep reading to learn more and understand how to navigate and avoid foreign transaction fees.

Quick Summary

Capital One does not charge foreign transaction fees on their U.S. credit cards, making them a good choice for international travel.

Foreign transaction fees can range from 1% to 5% and are usually added on top of your purchase price when using a credit card abroad.

To avoid foreign transaction fees, you can use a credit or debit card from a bank that doesn’t charge fees, withdraw the local currency from an ATM, or exchange cash before traveling.

What is a Foreign Transaction Fee?

capital one logo

When you use your credit card outside of the U.S., you might be charged a foreign transaction fee. Your credit card company or bank will charge this fee, which is usually between 1% and 5% of your spending. It’s important to check your card’s terms because withdrawal fees can vary. 

Sometimes, worldwide network(s) like Visa or Mastercard also charge fees for international transactions. These fees might be included in what your bank charges you, but they usually appear as separate charges on your bill.

Does Capital One Charge a Foreign Transaction Fee?

No, Capital One does not charge foreign transaction fees on any of its credit cards issued in the United States. This means that when you use a Capital One credit card to make purchases outside of the U.S., you won’t be charged an additional currency conversion fee. 

Unlike many other banks that may have some credit cards with foreign transaction fees, Capital One’s (credit card issuer) U.S.-issued travel credit cards are all fee-free when it comes to transactions made in foreign currencies.

How Much Are Foreign Transaction Fees?

No fee is charged on some cards when you use them for transactions in another country. But others might, which can be between 1% and 3%. If a card charges more than 3%, it’s unusual, and you should be CAUTIOUS about using it.

How to Calculate Foreign Transaction Fees?

Foreign transaction fees are extra charges you pay when you use a credit card to buy stuff from a seller in another country. They’re usually a certain percentage of the purchase price, added on top of what you’re already paying.

For example, if you buy something for $1000 from a foreign seller with a card that has a 3% foreign transaction fee, you actually pay $1030. Remember, these fees are different from currency conversion fees and are added separately.

Types of Transactions Subject to Foreign Transaction Fees

a picture of the capital one venture x card

GUESS WHAT? When you use your credit card outside the U.S., you might have to pay a foreign transaction fee. If you’re given the choice to pay in your home currency, don’t ALWAYS pick it. 

The exchange rates are usually worse, and you’ll still get charged. Taking money out from international ATMs also comes with fees. In addition to the ATM fee, you might have to pay extra for currency conversion, especially if you withdraw USD.

Even buying stuff online from international stores can lead to foreign transaction fees, especially if they use a global payment processor. This includes purchasing things from foreign airlines, even if you pay in U.S. dollars.

Note: New people who get the card will get a welcome bonus of 75,000 miles if they spend $4,000 or more in the first three months. And every year, on the anniversary of getting the card, they’ll get a bonus of 10,000 miles.

How to Avoid Foreign Transaction Fees?

When you travel to another country, you might face fees when using your credit or debit card. But there are ways to avoid these fees.

Many fintech institutions offer credit cards that don’t charge extra fees for transactions abroad. Some banks also have active accounts where you won’t be charged for using your debit card to withdraw cash overseas.

But keep in mind:

  •  It can take about a week for your new card application to be approved.
  • And it might take up to a couple of weeks for the new card to arrive in the mail.

So, if you’re planning a trip, make sure to consider these options well ahead of time!

Apply for a Credit Card With No Foreign Transaction Fees

When you travel abroad, employing a credit card without foreign transaction fees is SMART. It’s safer and easier, and many credit cards offer this feature.

These cards are handy not just for traveling but also for shopping online from international websites. Some even give rewards credit levels that can help you save on future trips or everyday online purchases.

a picture of the chase sapphire card

A popular choice for frequent traveler(s) is the Chase Sapphire Preferred Card. It doesn’t charge foreign transaction fees. Plus, you can earn points when you try it for travel bookings or dining out.

You’ll get 5 points per dollar on travel booked through Chase, 3 points per dollar on dining, select streaming services, and online grocery purchases (excluding Walmart, Target, and Wholesale clubs), and 2 points per dollar on other travel expenses.

For all other purchases, you’ll earn 1 point per dollar. Understood? Even if someone steals or takes your credit card details, you can easily report fraud and get your money back from the credit card company. 

The Chase Sapphire Preferred Card’s annual fee is $95. You can use the credit card rewards you earn for flights, dining, and hotels.

Get a Checking Account or Debit Card With No Foreign Transaction Fees

Travelers who go abroad often find it helpful to have a debit card and a credit card that Capital one doesn’t charge an extra fees for international transactions. 

A good combination for travelers is to have both a debit card and a credit card without international fees. Debit cards without extra fees are easy to use to buy things every day and make cash withdrawals from ATMs.

The Schwab Bank Investor Checking account is a popular choice for travelers. So, if you have a Schwab debit card, you won’t get charged extra for using it internationally. Plus, you’ll get back any ATM fees you paid at the end of each month.

It’s important to know that using a credit card to withdraw money from an ATM can be costly due to high fees.

Debit cards don’t offer as much protection against fraud as credit cards. If someone steals your debit card information, it might take a long time to get your money back. This can be really risky for people traveling on a tight budget or with limited funds.

ALWAYS report any fraud as soon as you notice it, and do what your bank says to get your money back as quickly as possible.

Don’t Use International ATMs Without Checking Fees First

an illustration of a person making a reservation through the Capital One Travel feature using rewards

Before using an ATM overseas, travelers need to check the fees. These fees can include charges from the international ATM, currency conversion fees, and fees from your bank.

To avoid these fees, it’s a good idea to have a bank account that doesn’t charge fees and reimburses out-of-network ATM fees. Also, ALWAYS withdraw the local currency when using ATMs. (Don’t try to withdraw in a foreign currency)

Some banks may have partner branches or in-network ATMs in the foreign country you’re visiting, so it’s worth checking with your bank. If your account doesn’t reimburse fees, you might want to withdraw large amounts of money each time to minimize the number of trips to the ATM.

Exchange Cash Before Leaving the US

Before a big trip, it’s smart to exchange your U.S. dollars for the currency of your destination. You can do this at a bank, credit unions, or currency exchange store. These places usually have better rates and lower fees than exchanging money at an airport.

Paying for things with cash during your trip can help you avoid ATM or transaction fees. So, it’s easier to budget for meals and souvenirs when you know exactly how much cash you have.

However, carrying a lot of cash comes with risks. You could lose it or have it stolen. So, it’s important to be careful. Have a backup plan, like a second credit card, in case something happens to your cash. 

If your card gets stolen, you’re usually not responsible for any charges. But if your cash gets stolen, you might not get it back.

Useful guides:

Conclusion

So, next time you plan to use your card abroad, remember these key points. Check if your bank charges foreign transaction fees. If you’re with Capital One, you’re in luck because they don’t.

If you’re traveling abroad, it’s smart to have a debit or credit card that doesn’t charge extra fees. Remember these tips to make your international transactions hassle-free and budget-friendly. 

Safe travels!

FAQs

Fees for buying things in other countries are typically charged when using a credit card in another country or purchasing items online with a different currency. However, in some cases, these fees may be waived for foreign transactions.

Capital One’s U.S. credit cards do not charge additional fees for international transactions. However, the Capital One Venture X card has an annual fee. Some other banks also have select credit cards that do not have these fees.”

Yes, you can use your Capital One debit card internationally as long as you see the Mastercard logo and can redeem miles. You do not need to notify Capital One beforehand about your trip. If you encounter any problems or have inquiries while traveling, you can contact their international helpline at 1-302-658-9593.

The limit on Capital One transactions is $5,000 per day. This includes using the card for purchases, ATMs, and cash advances, with either a signature or PIN.

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Author
Allen Morning
I'm Allen Morning, with a background spanning over 15 years in international finance and education from Harvard and Stanford. I founded Currenciap with a vision to demystify and streamline global financial transactions. My journey in finance has fueled my commitment to creating a platform that is both user-friendly and efficient, making international finance accessible to everyone. You can find more about me here.

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