5 Things To Know Before Using Your Credit Card Internationally

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Overall I’ve found that it has become significantly easier to make purchases abroad over the past few years. Going back many years I’d make most of my purchases abroad using cash (which I’d withdraw from an ATM once I arrived at my destination), given how many credit cards had foreign transaction fees, how many places didn’t accept credit cards, etc.

However, I’ve found that has changed significantly over the past several years, to the point that I’ve taken some trips where I haven’t withdrawn any cash at all.

So, what has improved? There are a lot more cards with no foreign transaction fees, a lot of cards offer big bonus points for foreign purchases, and more places than ever before accept credit cards.

However, making sense of credit card foreign transaction fees can be complicated. Reader Jim emailed to share his confusion regarding this, so I figured I’d write a post sharing the basics of getting the best value on credit card purchases abroad:

Always use a card with no foreign transaction fees

This should be obvious, but always use a credit card without foreign transaction fees. Cards with foreign transaction fees typically charge a 1-3% fee for the privilege of processing a transaction. Back in the day it was rare for credit cards to have no foreign transaction fees, while nowadays there are so many great cards without these fees, even mid-range cards.

The best mid-range cards for purchases abroad include the Chase Sapphire Preferred® CardInk Business Preferred℠ Credit CardCiti Premier℠ CardStarwood Preferred Guest® Credit Card from American Express, etc.

You should never pay foreign transaction fees when traveling abroad

Don’t settle for just no foreign transaction fees

It’s exciting that so many credit cards don’t have foreign transaction fees, but don’t settle for just that. You can also earn a ton of points for purchases you make abroad by maximizing bonus categories on the following cards, which have no foreign transaction fees:

While there are Amex cards with great bonus categories, keep in mind that many of these apply exclusively to US purchases. For example, the American Express® Gold Card offers 4x points on dining, but only at US restaurants.

Pizza in Italy plus double or triple points? Yes please!

Always pay in local currency

Whenever you make a purchase with a US credit card you’ll be asked whether you want the purchase charged in USD or local currency. This is known as dynamic currency conversion. Always have the purchase charged in the local currency, and not in USD.

This might seem counterintuitive to some, but the reason is because the rate you’re given in USD will almost always be significantly worse than the actual exchange rate. In some cases they just give you a really bad exchange rate, in other cases they add on a fee of a couple of percent, etc.

If you’re using a card with no foreign transaction fees, there’s simply zero reason to ever have them charge you in USD. Also remember that you have the right to make this choice, so never let a merchant force you to pay in USD.

For example, a couple of years ago I shared my experience at the Hilton Queenstown, where the hotel forced me to pay in USD. The total was 1,163NZD, which the hotel converted to 806.96USD.


The actual conversion rate for 1,163NZD at the time was 762.57USD, so that cost me almost 45USD. RIDICULOUS!


Not all foreign exchange fees are created equal

This is where things get a bit complicated. You always want to pay in local currency, but that doesn’t necessarily mean you’re getting the best conversion rate. Different payment processing systems use different exchange rates, as I explained in a previous post. It’s actually not that they’re trying to rip you off, but rather that they take different approaches to foreign transactions:

  • Visa guarantees the exchange rate the day you make the purchase, but has a built in cushion since the transaction typically only posts a couple of days later, so exchange rates could change, meaning there’s some risk for Visa
  • Mastercard charges the exchange rate the day the transaction posts (often a couple of days after the transaction), so since they’re charging whatever the rate is, the cushion is much smaller

Fortunately both processing systems let you view their exchange rates online, so you can crunch the numbers for yourself:

However, I don’t believe Amex has a similar conversion tool.

What’s the moral of the story? For a volatile currency the difference can sometimes be significant, but usually the rates are within one percent of one another. All else being equal I find that Mastercard has better rates than Visa, but often the difference is negligible.

Amex isn’t accepted a lot of places

I love Amex cards in general, though it’s important to understand that in a lot of countries Amex cards aren’t widely accepted, especially with smaller merchants. So if you do plan on using an Amex card abroad, be sure you have a backup, since it may not be accepted everywhere.

For example, my favorite “foreign purchase” to make with Amex cards is airfare using The Platinum Card® from American Express, since it offers 5x points on airfare. However, over the years I’ve learned that quite a few airlines don’t accept Amex cards. This is even more true of smaller merchants, as during my recent trip to Italy almost no restaurant accepted Amex.

During my recent trip to Lake Como, many places didn’t accept Amex cards

Bottom line

I know this can be complicated for some, though to simplify it as much as possible:

  • Use a credit card with no foreign transaction fees that offers the most points on dining and travel, which is what many purchases abroad are categorized as, and be prepared for Amex cards not to be accepted
  • Always have transactions processed in the local currency
  • Mastercard conversion rates are sometimes marginally better than Visa conversion rates, though that can easily be offset by a better return in terms of the rewards offered

Anyone have any other tips for using credit cards abroad?

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  1. I’d also recommend calling the bank ahead of time and let them know of your travel plans. Most banks will even let you do it online if you don’t feel like telling a real person your travel plans.

  2. I have found that amex is simply not accepted in Europe which isn’t really an issue I believe for any reader of this site given that I assume every serious reader has a Sapphire card.

  3. If going to Europe I would also consider taking a card with CHIP and PIN for places like toll roads, parking garages, other automated kiosks. Barclaycard Aviator has worked for me (it’s Chip and Signature, but will roll over to Chip and PIN in places where signature won’t work).

  4. Us Canadians have far less options when it comes to credit cards than Americans. Regardless, I think there was a post on this subject a few weeks ago, and I mentioned that my bank (TD – which also has my Aeroplan VISA card) charges a foreign exchange fee but then charges less than today’s buy rate for the same foreign currency purchased in-branch. Bottom line? I was in NYC and went to a local TD branch with ATM, where Canadian TD customers pay no ATM fee. I withdrew USD 200.00 and instantly the transaction appeared on my TD phone app showing the exchange rate to $CDN. There was also a couple of pending VISA charges shown on the app from the same day. The total final exchange rates for the VISA purchases were identical to that of my cash withdrawal. I will be in Holland and Germany for vacation later this month and I’ll try to see how this works with Euros.

  5. I am in Europe right now and although I don’t have any chip+PIN cards I found it is life saver to have a touchless card. My Amex Platinum and my Amex SPG have that technology and it is accepted in several places. It works similarly to Apple Pay where you just touch the card in the reader and you are done. No need to sign and nobody looks at you like you come from a different planet. In London for example, you just touch the card to get access into the tube. Fantastic!!!!

  6. I encountered a problem at some gas stations in New Zealand where the pumps only take cards with PIN. Is there a way to use the credit card w PIN and not be charged as cash advance at the pump?

  7. Hey Ben,

    since you can speak German the following shouldn’t be a Problem for you:

    On my German Amex account there’s an option to check the exchange rates Amex applies for various currencies on the day you select. The deeplink is
    https://global.americanexpress.com/myca/logon/emea/action?request_type=LogonHandler&DestPage=https%3A%2F%2Fglobal.americanexpress.com%2Fmyca%2Fintl%2Facctsvcs%2Femea%2FforeignExchange.do%3Frequest_type%3D%26Face%3Dde_DE&Face=de_DE and can only be accessed when logged in.

    And here’s a blog post explaining where you can find that menu option (hope that link is allowed here): https://travel-dealz.de/blog/american-express-wechselkurse/

  8. @Nick – the way around this is to get a credit card that prioritizes chip-and-pin over chip-and-signature. There are very few of these for US customers, but one that has no annual fee and no foreign transaction fees is the mastercard from First Tech Credit Union. It’s easy to become a member, although the application process is a slightly more cumbersome than applying for, say, a Chase credit card.

  9. Keep in mind that most places in China other than the US hotel chains don’t take foreign cards whatsoever – only Union Pay (a Chinese Visa-like system). However, Discover cards normally work where Union Pay cards work, if you can get the merchant to actually swipe without seeing a Union Pay logo on your card.

  10. If you travel abroad irregularly, it is helpful to let the credit card company know ahead of time that you’ll be traveling.

    Also, if you are traveling to the UK, having a card with a chip of SOME kind (chip and signature or chip and pin) is a huge help. Some places are starting to do away with swipe readers entirely. They can still take a swipe card, but it is a huge hassle involving several phone calls and manually taking your credit card number – a hassle some merchants wont put up with. The issue doesnt seem to be as widespread in London (which sees more US tourists with swipe cards) but I have had issues in the north.

  11. Heading to Sydney in a few weeks. Sorted through my cards to find the ones with no FTF so good with that. Question tho- do I need a chip card with a PIN in Australia? I know US cardholders were still able to use a signature but I’ve seen mention in a few places that’s being pushed back on.

  12. If a merchant forces you to pay in US Dollars, you can dispute the charge with Visa or MC. Just give, as a reason, “requested to be charged in Euros; merchant charged me in US Dollars”.

    And yes, a “chip + pin” card is enormously useful in Europe (railroad stations, toll booths, even to use automated ticketing machines in museums, saving lengthy waits in a ticketing line). This was the deciding factor in keeping my Barclay Aviator card and canceling my Citi AA card. (You do need to use the card for one purchase in the US after changing your PIN.) (In a pinch, you can use your ATM debit card, but you will probably be charged a foreign transaction fee.)

  13. Hawaiian Airlines Mastercard (Barclays) has chip + pin and NO foreign transaction fees. Choice Privileges Visa (Barclays) has chip + pin and 3% foreign transaction fee. Virtually all cards from Chase, Citi, US Bank and B of A do not offer a pin.

  14. My JetBlue Plus card (a Barclaycard; seems to be a theme here) is a life saver in Europe because of the chip+pin. Would not recommend traveling without some sort of chip+pin card across the pond.

  15. I have a Barclarycard Miles & More card that is Chip & Signature but fails over to Chip & PIN if needed. I have found, however, that the PIN for my Chase debit card works in automated kiosks with my Chase credit cards, even though so far as I know that is not a documented feature.

  16. I recommend you setup your notifications such that any charge greater than $1 it nitified. in this way you can verify charges immediately or sed if your card is being used by the merchant again from a different terminal after you leave. I was surprised that on Russia my charges showed up in my text messages within seconds of being completed…usually before i was given the receipt!

  17. Dont bother travelling with or having an AMEX card since theyre almost NEVER accepted outside of the US. I learned it the hard way…

  18. @ Lucky –

    I agree with your comments. We have seen in many places even cabs are accepting credit cards such as in London and Singapore and street venders that sell tourist items in New York and other places are, as well; however, we have also seen the pricing for many services become to a level that would demand it as people just do not carry that much cash these days.

    I would add to the reason about the need to make your transactions in local currency the fact that many credit cards exchange it at market rate which is usually better than the rate that you are offered on the spot transaction. Sometimes it is the same. Sometimes its a little different. Other times it’s a big difference but if you travel a lot this could amount to some considerable savings.

    I would also add a few other key points to your post:

    It is important to remember that in some countries the merchant may have a Visa or Mastercard sign but they can only process a locally issued card or they may have a POS machine but not be able to process Visa or Mastercard payments. There are local competitors to Visa and Mastercard in a number of other parts of the world. Also, some of the virtual wallet payments use a POS looking machine. An example is China, but different from what a previous member commented, an increasing number of merchants are accepting foreign credit cards.

    Another important point is if the merchant takes a credit card, especially for a relatively large ticket item and there is a problem with the machine, then they can get the transaction processed manually by calling the cooperating bank that their payments are processed through. This is particularly important when dealing in countries that have lower basic infrastructures, such as in Africa where if there is an electric outage when you can still pay using a credit card for something you will likely refuse to pay in cash (e.g. a hotel stay).

    Furthermore, if you do have to withdraw some cash from an ATM check the regulations with your home bank, first, before your travel. Much as an increasing number of credit cards are waving foreign transaction fees, a number of bank accounts are waving non-bank ATM fees, meaning you can withdraw funds from any ATM, and some even will reimburse you for a outside bank’s ATM charge.

    When overseas, some systems are designed with PIN authorization and if you did not set up a PIN for your credit card, just press the green accept button.

    You may also consider notifying the bank about your travel plans because often large ticket or odd transactions from overseas are either declined or require special security authorization.

  19. I learned the hard way on paying in local currency, and it also happened to me at a hotel. NEVER again!!

  20. I agree with lack of acceptance of AmEx. Even here in Canada, our largest supermarket chain only takes Visa and MC. Most other large retailers do take AmEx, but a number of small, local ones do not because of significantly higher merchant fees.

  21. Ben-one area that might be worth addressing is the amount of (bonus) points one might receive using a card that DOES have FTFs vs. one that doesn’t. For example, while my Chase Ink Visa doesn’t have a foreign fee, it gives 2x points per $ at hotels. But with my AMEX surpass card, I get 12x HH for my hotel charges but have to pay the added FTF on top of that (which theoretically does also increases my overall spend and thus more points earned). So the net is +10 more points per $ for the FTF being tacked on. I am sure there are other examples out there where one card may be more lucrative than another even though you would have to pay the additional fee. Would be good to discuss the +/- of situations like this and how it could be worth it.

  22. Let me throw up a reverse opinion: Don’t get a credit card with annual fees for the purpose of avoiding Foreign Transaction Fees, especially a premium card.

    For most Americans, they’ll travel abroad every few years at most. Airlines will likely bill in USD, so the only large foreign expenses will be hotels and shopping. Worst case, let’s assume your current card charges a 1% FTF and you’re getting a premium card to avoid it. Let’s say $100 annual fee. $100 / .01 = $10,000 you’d have to spend abroad to break even.

    There are now a few no-fee credit cards which don’t charge FTFs, like Amazon’s credit cards. I believe Capital One and Discover even offer no-annual-fee cards with no FTFs as well.

    There are plenty of reasons to get a premium card with annual fee…but avoiding FTFs shouldn’t be one of them.

  23. @Lucky -I always enjoy reading your posts and want to thank you for this advice. We travel a lot and I’ve always been frustrated by the exchange fees. Looks like there are only 2 choices in Canada. We have a big Europe/UK trip coming up soon so today I applied for the Marriott one and got instant approval. Ironically we have a couple Marriott/SPG nights booked on the trip so we’ll enjoy the bonus points + no fees, not to mention the free nights down the road. So thanks again!

    PS, I got a kick out of your Mr & Mrs post. We’ve had a few checkins where the clerk said ‘I’m sorry, this booking is only for one bed, wouldn’t you like 2?’ I just smile and say ‘no thanks’!

  24. hello. i live in japan and thats true of american express not being accepted at many places and the cards not earning bonus points due to being outside of the u.s.. thats a frustrating situation for me because i live outside of the u.s. now but enjoy having my u.s. credit cards. what is interesting about american express and japan is here delta and american express offer their own delta airlines gold credit card (which btw blows the u.s. gold card away big time) so although american express at least is offered in japan, its also not as widely accepted as much as visa and mastercard. thankfully, convenience stores, the gas stations i go to, online stores, the phone company/electric company/internet company i use and many airlines accept american express as a form of payment, but peach airlines (an LCC based in japan that i use periodically) and the grocery store i go to dont accept it.

  25. I’ve had the opposite experience. Merchants usually offer you the “convenience” to charge you in USD, but it’s usually at a much higher rate usually. The only time I’ve seen it less was at a hotel in Hong Kong.

    At least with Chase, I’ve always seen that the rate charged for that day was always correct, or in line with what should have been charged.

    Do people have different experiences? Should I always tell them I want to pay in USD?

  26. @Rob As an Australian, I can’t recall the last time I had to sign for a CC transaction. Chip/PIN transactions seem to be the norm here

    For anyone travelling in Asia, I’ve never had any problems using my AMEX CC in Japan, Taiwan & Singapore

  27. While AmEx might not be accepted as widely, most large merchants, hotels and airlines do accept it. And the AmEx fraud service is much better than any other card I’ve ever held – Chase, Citibank, CapitalOne, Barclay’s all block a much higher number of transactions for potential fraud than AmEx in my experience. AmEx has only blocked one transaction in over 20 years – and that was actual fraud. All other banks have blocked countless transactions – and none ever was fraud!
    AmEx is also easier to deal with in case disputes…

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