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Leaving The U.S.? Take Capital One, Too


In recent years, Congress has passed a number of laws that have changed how credit card companies charge interest, fees and other penalties.

Capital One The Only Company That Charges No Foreign Transaction Fees On Any Of Its CardsOne practice the federal government hasn’t curbed is the use of foreign transaction fees — an extra charge credit card companies tack on when one of their cards is used to make an international purchase in person or online.

We’re big fans of Capital One’s cash rewards card. Here’s one more reason to cheer: Capital One is the only issuer that refuses to charge consumers foreign transaction fees on any of its cards.

There are just a handful of other cards that offer this “perk”:

  • AMEX Platinum or Centurion
  • Citi ThankYou Premier or Prestige
  • Chase British Airways Visa Signature

Here’s how foreign transaction fees work:

The credit card processor from the country in which you made the purchase must receive the funds in its local currency. When your credit card company converts U.S. dollars into something else, it routinely charges between 1% and 3% of the purchase or service price.

Different credit card issuers charge different foreign transaction fees, but the percentage on each purchase is always the same.

And both the issuer and Visa and MasterCard take a cut. For example, if you use a credit card issued by HSBC, the total foreign transaction fee is 3% — 2% charged by HSBC, 1% charged by Visa/MasterCard.

Here’s a breakdown of what issuers charge in foreign transaction fees:

ISSUER FOREIGN TRANSACTION FEE
American Express 2.7%
Bank of America 3%
Barclaycard 3%
Capital One None
Citi 3%
Discover 2%
HSBC 3%
Chase 3%
US Bancorp 3%
USAA 1%
Wells Fargo 3%

The next time you need to make a purchase out of the United States, remember to use your Capital One credit card. There’s no reason to be charged a fee you can always avoid.

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  1. Monica said:
    on February 15th at 11:50 am

    Charles Schwab does not charge fee, I believe.