How to Avoid Foreign Transaction Fees Online

One way that banks make money is through the application of fees. One type of fee that you may have seen if you’ve ever traveled abroad or shopped on a foreign website is a foreign transaction fee. Banks usually charge these fees as compensation for currency exchange, and they calculate the fee as a percentage of the transaction amount. If you’re a fan of online shopping, you may be wondering if there’s a way to avoid foreign transaction fees online. Read on to learn about the best ways to avoid these fees.

If you find that you’ve been charged a foreign transaction fee improperly, you may be able to file a lawsuit against your bank to get compensation.

Why Do You Have to Pay a Foreign Transaction Fee Online?

The first step to take to avoid foreign transaction fees is to understand when and why they are applied. Put simply, foreign transaction fees are charged for online transactions in which the merchant is based outside the U.S. This means that when you shop or use an ATM on vacation outside the U.S. you’ll likely be charged a foreign transaction fee — that is if your bank charges these types of fees in the first place.

Most banks charge between one and three percent for foreign transactions. However, UpgradedPoints reports that some accounts don’t charge these fees: Capital One 360 Checking Accounts charge $0 for foreign withdrawals, Schwab Bank High Yield Investor Accounts offer unlimited reimbursements for these withdrawals, and Discover Bank doesn’t charge foreign transaction fees for ATM withdrawals at all. Simply choosing the right card is one way to avoid foreign transaction fees.

When shopping online, however, it’s not always so clear when we’re incurring these fees. First, banks charge foreign transaction fees for purchases made from online merchants based outside the U.S. This means that when you shop online and make a purchase from a company based in the United Kingdom, for instance, you’re likely to incur a fee. You may also receive a fee if you buy on a website like Amazon or eBay from a merchant located outside the country. Another way to avoid foreign transaction fees online is to check the location of the seller on sites like Amazon.

How Can You Avoid Foreign Transaction Fees?

The simplest way to avoid foreign transaction fees is to look for options that wouldn’t result in these fees in the first place. When traveling abroad, you might choose to pay in cash or the local currency. When shopping online, you could simply choose merchants that are based in the U.S.

There are also many options for credit cards that don’t charge these fees or offer reimbursement. Many banks even offer travel credit cards specifically for this purpose. Credit Karma lists three great travel credit card options: the Chase Sapphire Preferred Card, the Capital One Venture Rewards Credit Card, and the Bank of America Travel Rewards credit card. Each of these cards allows the cardholder to earn points or miles while they avoid foreign transaction fees.

However, it’s not always possible to avoid situations in which these fees would be charged: you can’t always switch cards or sellers, and you can’t use cash for online payments. In these cases, you have a few other options. One way to effectively avoid foreign transaction fees is to determine that you shouldn’t have been charged one in the first place. Check that a foreign transaction fee is included in your account agreement and that the merchant you bought from is foreign-based. After all, these fees aren’t always applied in good faith.

Next, you may be able to avoid foreign transaction fees by asking your bank for a fee waiver. According to Bankrate, simply calling and asking your bank to have a fee waived often works. Most banks would rather keep you as a happy customer than charge you a fee. That being said, it’s important to be polite and straightforward. You might also be able to use a longstanding relationship with the bank as leverage to have the fee waived.

Join a Free Foreign Transaction Fees Class Action Lawsuit Investigation

If you were charged a foreign transaction fee on a debit card or credit card purchase made on a foreign website, you may qualify to join this foreign transaction fees class action lawsuit investigation.

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This article is not legal advice. It is presented
for informational purposes only.