If you are about to travel overseas you won’t be able to avoid paying a foreign exchange fee at some point, but there are some ways you can avoid paying exorbitant foreign transaction fees on international purchases when travelling. One of the easiest ways to handle the situation is to simply take your current credit or debit card which does not charge foreign transaction fees. You could purchase a prepaid travel money card before you leave and load it up with the currency of the country you will be visiting, or you could use cash.
Credit Card Usage in Foreign Exchange Transactions
When you use a credit card or an ATM/debit card issued by your bank, you will stand to benefit by any foreign exchange transaction being carried out at the bank’s wholesale foreign exchange rate. Your bank will still earn money for itself by charging you a profit margin fee of between three and three and a half percent on any international purchases you make. When you make a cash ATM withdrawal you can usually expect to pay about three percent of the amount withdrawn plus a $5 flat fee. However, there are credit and debit cards that offer lower fees than others, and some that don’t charge at all.
Comparison of No Foreign Currency Exchange Fee Credit Cards
Rates last updated September 2nd, 2014.
For example, due to its fee structure the 28 Degrees MasterCard is an enticing proposition for those heading abroad or just spending internationally. Our review covers off everything you need to know about the card.
Prepaid Travel Money Cards
You can, of course, choose to transfer your money onto a prepaid travel money card in the currency of the country you are going to visit before you leave.
Our comparison of travel cards covers their fees, available currencies and you can read frequently asked questions about these products.
Cash in the currency of the country you are visiting has its merits also. It will be accepted everywhere by everyone with no surcharges or fees being applied. You can often bargain for a better price if you have cash to bargain with. Cash however, can be more easily stolen, and your travel insurance policy might not cover you for loss of cash. When it does the claim process is often painfully slow. The secret in exchanging cash from one currency to another is to pre-arrange the transaction online.
Credit Cards with Travel Insurance
If you already have a credit card you should first check to see if it offers travel insurance. If not, you may want to give some thought to changing it for a credit card that offers travel insurance. Complimentary insurance means you can save money from not having to take out an additional travel insurance policy. Compare some cards that offer complimentary travel insurance.