How do I make purchases abroad when I’m traveling internationally?

If you’re planning to travel abroad anytime soon, I highly recommend preparing for your trip by ensuring that you have a proper card setup for the spending you will be doing on your trip.

One important thing that people who aren’t well-seasoned travelers may not know about is that some credit cards charge foreign transaction fees. Foreign transaction fees apply when you make any purchases on your credit card in a foreign country or in a foreign currency.

Additionally, you might be wondering what you’ll be charged in USD when making purchases abroad. Unfortunately, it isn’t as simple as pulling up the currency converter from Google and using the conversion rate there.

Foreign Transaction Fees

Before you even head out to the airport to board your international flight, it is essential to make sure that you are carrying a credit card in your wallet that has no foreign transaction fees.

Many credit cards, such as the Chase Freedom Unlimited® and Chase Freedom Flex® charge foreign transaction fees. Most foreign transaction fees on credit cards are 3% of the amount of each transaction in USD, which can easily pile up when you’re making multiple purchases abroad.

Most travel-rewards oriented cards will not charge foreign transaction fees, such as the Chase Sapphire Preferred® Card and Chase Sapphire Reserve®. Additionally, some banks don’t charge foreign transaction fees for any of their credit cards.

Capital One and Discover are known for not charging foreign transaction fees on their credit cards. On the other hand, Chase, Citi, and American Express may charge foreign transaction fees on some of their credit cards. It is best to check with your bank to find out if your card has foreign transaction fees or not.

How Are Foreign Transaction Fees Calculated

If your credit card charges a 3% foreign transaction fee, this fee is specifically described as 3% of the amount of each transaction in USD.

However, in order to calculate how much your transaction is in USD, the currency must be converted using a currency exchange rate. You might assume that the exchange rate is the rate publicly available on Google, but this isn’t the case.

Credit cards convert foreign currency into USD using the exchange rate determined by the card’s payment network, such as Visa, Mastercard, Discover, and American Express.

Exchange rates aren’t static and are dynamically determined on the day of your transaction. If you want to check how much your credit card transaction costs in USD, you should check the appropriate exchange rate tool provided by your payment network:

• Visa Exchange Rate Calculator
• Mastercard® Currency Converter Calculator

Note that American Express and Discover currently don’t offer publicly available currency converter tools that you can use. Mastercard and Visa are generally the most widely accepted credit card networks worldwide, with American Express and Discover trailing behind.

Even though exchange rates across different credit card networks may differ slightly, there can still be a noticeable difference, especially with larger purchases.

For example, if you were to make a purchase of 10,000 Japanese Yen (JPY) on your Visa credit card today (July 16, 2025), you would be charged $67.78 USD. However, if you were to make the 10,000 JPY purchase on your Mastercard credit card instead, you would be charged $68.07 USD.

After this conversion takes place, the foreign transaction fee would apply, if applicable. If your Visa credit card had a 3% foreign transaction fee, the final transaction amount for the 10,000 JPY purchase would be $69.81 USD. A 3% foreign transaction fee on the Mastercard credit card would result in a final transaction amount of $70.11 USD.

Credit Card Alternatives

If you’re traveling to a country that is a mostly cash-oriented society, you might find it better to use cash instead of credit cards.

However, depending on how you obtain the cash that you need to use, you might end up losing a lot of money due to fees and poor exchange rates.

If you use your debit card to withdraw money at an ATM abroad, you may be hit with multiple fees. For example, if you use your Chase debit card at a non-Chase ATM abroad, you will be charged a $5 standard withdrawal fee, as well as a 3% foreign transaction fee on the amount of money you’re withdrawing.

I also don’t recommend exchanging any USD cash or exchanging at a bank or a currency conversion service at an airport. You’ll often be hit with service fees by whoever you’re doing the conversion with, and you’ll also be at the mercy of whatever conversion rate the bank or service has set.

The worst way to get your hands on cash is via a cash advance through your credit card. A cash advance allows you to borrow money against your credit limit, but it is very expensive.

If you obtain physical foreign currency by taking out a cash advance at an ATM abroad, you will likely be hit with a cash advance fee, an ATM withdrawal fee, and a foreign transaction fee.

On top of these fees, cash advances come with APRs that are often higher than APRs for purchases. Additionally, unlike purchases, which come with a grace period before they accrue interest, cash advances begin accruing interest immediately.

Schwab Bank Visa® Platinum Debit Card

The best way to get cash abroad is with the Schwab Bank Visa® Platinum Debit Card. Unlike most other debit cards, the Schwab debit card comes with extremely useful perks.

When you use your Schwab debit card to withdraw cash from any ATM worldwide, you will be refunded 100% of the withdrawal or ATM fees you pay. You’ll have access to the best exchange rate possible, as you’ll be charged at Visa’s exchange rate since the Schwab debit card is a Visa card.

Additionally, whenever you’re withdrawing money at an ATM abroad, and you’re asked if you’d like to charge the transaction in USD or the local currency, always choose the local currency so you’ll have the best exchange rate. If you choose USD, you’ll be using the ATM’s exchange rate instead of your debit card’s rate.

These benefits don’t just apply abroad. You’ll be reimbursed for any withdrawal or ATM fees at any ATM worldwide, including back home in the U.S.!

You’ll need a Schwab Bank Investor Checking™ Account to get the Schwab Bank Visa® Platinum Debit Card, but it’s very simple to open an account with Charles Schwab. The checking account doesn’t have a minimum balance or any monthly fees, making it extremely useful to use for its unlimited fee rebates from any ATM worldwide.

If you can, I always recommend using a credit card with no foreign transaction fees whenever possible. The Schwab Bank Visa® Platinum Debit Card will come in handy for any situations where credit cards aren’t accepted, and you’ll need cash instead.

Final Remarks

When it comes to spending money abroad, preparation is key. By choosing a credit card with no foreign transaction fees and understanding how currency conversions actually work, you can save money and avoid unpleasant surprises on your statement. Travel-focused credit cards and the Schwab Bank Visa® Platinum Debit Card are excellent tools for making purchases and withdrawing cash internationally with minimal fees. Whether you're booking a train ticket in Europe or grabbing street food in Asia, being intentional with your payment methods can make your travels smoother and more cost-effective.

TL;DR:

When traveling internationally, it’s important to use credit cards that don’t charge foreign transaction fees to avoid extra costs. Opt for travel-friendly cards like the Chase Sapphire Preferred® Card or cards from issuers like Capital One and Discover, which waive these fees. Don’t rely on Google for exchange rates; card networks like Visa and Mastercard set their own rates. For cash needs, avoid currency exchange booths, credit card cash advances, and high-fee ATMs. Instead, use the Schwab Bank Visa® Platinum Debit Card, which refunds all ATM fees and uses Visa’s competitive exchange rates, making it a top choice for international ATM withdrawals.