Using Your Credit Card When You Travel Abroad

Yes, you can use your credit card abroad, but you'll pay fees and exchange rates that vary by card and bank

Most credit cards work internationally at ATMs and in stores, but the cost of using them abroad is not the same as using them at home. Your bank charges a foreign transaction fee — usually 1% to 3% of what you spend — on top of the exchange rate they apply. Some cards charge no foreign transaction fee at all. The exchange rate itself is set by your bank, not by you, and it's typically a few percentage points higher than the mid-market rate you'd see on a currency converter.

Before you leave, contact your card issuer to let them know you're traveling. Banks sometimes block cards they think are being used fraudulently, and a heads-up prevents your card from being declined when you're far from home. You should also ask your bank three specific things: what the foreign transaction fee is, whether they charge a fee for ATM withdrawals abroad, and what exchange rate they use.

Key Takeaways

• Foreign transaction fees range from 0% to 3% depending on your card, and this fee is added to every purchase you make outside the United States.
• Your bank sets the exchange rate when you use your card abroad, and it's usually higher than the mid-market rate, which means you pay more than the official conversion.
• Notifying your bank before travel prevents your card from being blocked as a fraud precaution.
• ATM withdrawals abroad often carry both a foreign transaction fee and a separate ATM fee from the bank that owns the machine.
• Some cards marketed to travelers charge no foreign transaction fee, but you should verify this applies to all types of transactions, not just purchases.

How foreign transaction fees work

A foreign transaction fee is a percentage of the dollar amount you spend. If your card charges 2% and you buy something that costs 50 euros, your bank converts that to dollars at their exchange rate, then adds 2% of the dollar total to your bill. This fee appears on your statement as a separate line item, usually labeled "foreign transaction fee" or "international transaction fee."

The fee applies to every transaction — not just big purchases. A coffee in Paris, a train ticket in Italy, a hotel in Mexico — each one gets the fee added. Over a two-week trip, these small charges add up. A card with no foreign transaction fee saves you money even if its regular interest rate or annual fee is slightly higher, because you're using it specifically for travel spending.

Not all cards charge the same fee. Standard credit cards often charge 2% to 3%. Some premium travel cards charge 0%. Business cards vary widely. Before you travel, log into your card's website or call the number on the back to confirm the exact percentage — don't assume based on the card name or marketing materials.

Exchange rates: what your bank charges versus what you'd see online

When you use your card abroad, your bank converts the foreign currency to dollars. The rate they use is not the same as the rate you see on Google or XE.com. Those sites show the mid-market rate — the rate banks use to trade with each other. Your bank adds a markup to that rate, usually 1% to 3%, so they make money on the conversion itself, separate from the foreign transaction fee.

This markup is not optional and not negotiable. Every bank does it. If the mid-market rate is 1.10 dollars per euro and your bank's markup is 2%, you get 1.078 dollars per euro instead. The difference is small on a single transaction but significant over a trip. You can't avoid this markup by using a credit card, but you can minimize it by using a card from a bank known for competitive rates — though most major banks are similar enough that the difference is small.

The exchange rate your bank uses is locked in on the day the transaction is processed, not the day you make the purchase. If you buy something on Monday but the charge doesn't post until Wednesday, Wednesday's rate applies. This timing is usually out of your control.

ATM withdrawals and cash advances abroad

Using an ATM abroad to withdraw cash costs more than using your card to pay directly. You pay the foreign transaction fee (if your card has one), plus an ATM fee charged by the bank that owns the machine, plus sometimes a fee from your own bank for using an out-of-network ATM. These fees stack, so a single $100 withdrawal can cost $4 to $6 in fees alone.

A credit card cash advance — withdrawing money using your credit card instead of a debit card — is even more expensive. Cash advances typically charge a higher fee (sometimes 3% to 5%) and start accruing interest immediately, with no grace period like purchases have. Avoid cash advances unless you have no other option.

If you need cash abroad, withdraw larger amounts less often rather than small amounts frequently. One $300 withdrawal costs less in total fees than three $100 withdrawals. But don't withdraw so much that you're carrying large amounts of cash unsafely. The balance depends on where you're traveling and how comfortable you are carrying cash.

Cards with no foreign transaction fee

Some credit cards advertise zero foreign transaction fees. These cards are designed for people who travel regularly or spend money abroad. The catch is that "no foreign transaction fee" applies to purchases and ATM withdrawals, but not always to cash advances or balance transfers. Read the fine print on the card's website to confirm what transactions are covered.

A card with no foreign transaction fee still uses your bank's exchange rate, so you're not avoiding the markup — you're just avoiding the percentage fee on top of it. Over a trip, this saves you money, but it's not the same as getting the mid-market rate.

These cards often have other features aimed at travelers: travel insurance, rental car coverage, or airport lounge access. Some charge an annual fee to offset the cost of these benefits. Whether the annual fee is worth it depends on how often you travel and whether you use the other benefits. If you travel once a year, a card with a $95 annual fee and no foreign transaction fee might not save you money compared to a no-annual-fee card that charges 2% per transaction.

Notifying your bank before you travel

Call your card issuer or use their app to tell them you're traveling and provide the dates and countries. Banks use this information to distinguish legitimate travel from fraud. Without notice, a charge from another country might trigger a fraud alert and your card could be declined.

If your card is declined abroad, you'll need to call your bank to unblock it — which is difficult when you're in a different time zone and may not have reliable phone service. A quick notification before you leave prevents this problem. Most banks let you set travel notices online in their app or website, which is faster than calling.

If you're traveling with a partner or family member who has a card on the same account, make sure they know you've set a travel notice. Some banks require each cardholder to set their own notice separately.

Comparing credit cards to other payment methods abroad

Credit cards are not your only option for spending money abroad. Debit cards, prepaid travel cards, and digital wallets like Apple Pay each have different costs and risks. A credit card is usually the safest choice because credit card companies offer fraud protection — if someone uses your card number fraudulently, you can dispute the charge and you're not liable for unauthorized transactions. Debit cards offer less protection, and you're spending money directly from your bank account.

Prepaid travel cards let you load dollars before you leave and convert them to foreign currency at a locked-in rate. This removes the uncertainty of exchange rates, but prepaid cards often charge higher fees than credit cards and offer less fraud protection. They're useful if you want to control your spending or if you don't have a credit card, but they're not cheaper for most travelers.

Digital wallets like Apple Pay or Google Pay work abroad at contactless payment terminals and sometimes offer the same fraud protection as credit cards. They use your underlying credit card's exchange rate and fees, so the cost is the same — but they're convenient because you don't need to carry a physical card.

What to do if your card is declined abroad

If a merchant's terminal rejects your card, the problem could be fraud protection, a technical issue with the terminal, or the merchant's payment system not accepting your card type. Ask the merchant to try again. If it's declined a second time, ask if they accept a different payment method — another card, cash, or a digital wallet.

If multiple merchants decline your card, call your bank immediately. You may have triggered a fraud alert, or there may be a technical problem with your account. Have your card number and a recent transaction ready when you call. Your bank can tell you whether the card is blocked and unblock it on the spot.

Before you travel, write down your bank's international customer service number and keep it separate from your wallet. This number is different from the number on the back of your card and is staffed 24/7 for emergencies abroad.

Frequently Asked Questions

Do I need to tell my bank I'm traveling, or will my card just work?

Your card will usually work without notice, but banks sometimes block cards they think are being used fraudulently. A travel notice tells your bank to expect charges from another country, which prevents unnecessary blocks. It takes two minutes and removes a major headache if your card is declined when you need it.

What's the difference between a foreign transaction fee and an exchange rate markup?

A foreign transaction fee is a percentage your bank charges on top of the conversion — usually 1% to 3%. The exchange rate markup is the difference between the mid-market rate and the rate your bank actually gives you — usually another 1% to 3%. Both apply to every transaction, so you're paying two layers of cost.

Is it cheaper to withdraw cash at an ATM or pay with my card?

Paying with your card is almost always cheaper. ATM withdrawals charge multiple fees stacked together. The only exception is if you're making many small purchases and your card has a high foreign transaction fee — then one large cash withdrawal might cost less overall. But for most travelers, using the card directly is cheaper.

Can I use a credit card at every store abroad, or do I need cash?

Credit cards are accepted in most stores, restaurants, and hotels in developed countries, but cash is still necessary in some places — small shops, markets, taxis, and rural areas often don't accept cards. Carry both. The amount of cash you need depends on where you're traveling and how much you plan to spend on things that don't accept cards.

What should I do if someone uses my credit card fraudulently while I'm abroad?

Call your bank's fraud department immediately using the number on your statement or their website. Credit card companies limit your liability for unauthorized charges to $50, and many waive even that. Your bank can cancel the card and issue a replacement, though getting a replacement abroad takes time. Having a second card from a different bank prevents you from being stranded without payment options.