Last reviewed: September 28, 2026. Fees and rules below are for the US, UK and EU as of that date. Card terms change, so check your own card's pricing before you travel.
Short answer
When a card machine, ATM or checkout page abroad offers to charge you in your home currency, say no and pay in the local currency. Accepting that offer (called dynamic currency conversion, or DCC) lets the merchant or ATM operator set the exchange rate, and it is usually worse than the rate Visa or Mastercard would apply. Then remove the second cost: use a card that doesn't charge a foreign transaction fee (US) or non-sterling transaction fee (UK), which many cards set at roughly 1% to 3% of each payment.
Every time you pay by card in a currency that isn't your own, two decisions set the price. The first is made before your trip: which card is in your wallet, and what its issuer charges for foreign currency. The second is made at the till, often in about three seconds, when a terminal asks "Pay in EUR or USD?" or "Pay in local currency or GBP?"
Most people get the second decision wrong because the home-currency option looks safer. You see a familiar number and a familiar symbol. That comfort has a price, and it is built into the exchange rate rather than shown as a separate fee.
This guide covers card spending only: in-person payments abroad, ATM withdrawals, and online purchases from foreign merchants. If you're moving money to someone in another country, that's a different set of costs covered in our guide on how to send money internationally for less.
The three costs hidden in a foreign card payment
When you pay €100 with a US or UK card, the amount on your statement can include up to three layers:
- The exchange rate. Someone converts euros into dollars or pounds. If you pay in the local currency, that is normally your card network (Visa or Mastercard). If you accept the home-currency offer, it is the merchant's or ATM operator's conversion provider.
- Your card issuer's fee. In the US this is usually called a foreign transaction fee. UK banks tend to call it a non-sterling transaction fee. It is a percentage added on top of the converted amount.
- Cash-specific fees. At ATMs you may pay a cash withdrawal fee from your own bank, a fee from the ATM operator, and on a credit card, interest from the day you take the cash out.
You control all three, but at different moments. The card choice happens at home. The currency choice happens at the terminal. ATM costs depend on how often, and from which machines, you withdraw.
What a foreign transaction fee is (US)
A foreign transaction fee is a percentage your card issuer adds when you make a purchase in a foreign currency, outside the US, or with a merchant based abroad. American Express and Capital One both describe these fees as generally between 1% and 3% of the transaction (American Express, updated July 23, 2026; Capital One, March 12, 2026). On cards that charge it, 3% is a common figure.
Two points trip people up.
You don't have to leave the US to pay it
Buying from a foreign website can trigger the fee even if you never leave home. Federal rules make this explicit. The CFPB's official commentary to Regulation Z says the transaction charge a card issuer must disclose includes "any fee imposed by the issuer for purchases in a foreign currency or that take place outside the United States or with a foreign merchant" (CFPB, Comment for 1026.60).
The "foreign merchant" part matters. A purchase priced in US dollars can still carry the fee if the merchant or its payment processor is located abroad. You often can't tell from a checkout page where the merchant is processed, which is one reason a no-fee card is simpler than trying to predict which purchases will be charged.
It must be in your card's disclosure table
US credit card issuers have to show transaction charges, including foreign transaction fees, in the standard pricing table that comes with an application or solicitation (CFPB, Comment for 1026.60). If you're unsure about a card you already have, look for "Foreign Transaction" under the fees section of your cardmember agreement, or search the CFPB's credit card agreement database, which collects issuers' agreements every quarter. The CFPB notes those are general agreements, so your own account terms are the final word.
Debit and prepaid cards can charge the fee too. The CFPB's prepaid-card guidance defines a foreign transaction fee as one charged when you use the card in a foreign country or make an international purchase from the US (CFPB, last reviewed October 31, 2024). Your bank's fee schedule will list it.
UK non-sterling transaction fees and cash fees
UK cards work the same way, with different labels. A non-sterling transaction fee applies when you pay in a currency other than pounds, and many banks charge a separate fee for cash withdrawals in foreign currency.
Two real examples, taken from the banks' own pages on September 28, 2026, show the range:
- HSBC UK lists a 2.75% non-sterling transaction fee on debit cards and 2.99% on credit cards. Cash withdrawals abroad add a cash fee of 2% (minimum £1.75, maximum £5) on debit cards, or 2.99% (minimum £3) on credit cards (HSBC UK).
- Nationwide charges 2.99% on foreign-currency purchases and withdrawals with some current accounts (FlexAccount, FlexDirect, FlexBasic), no foreign-currency fee on others (such as FlexPlus and FlexStudent), and no fee on foreign-currency purchases with its credit cards. Its credit card cash withdrawals cost 2.5% (minimum £3) (Nationwide).
These aren't recommendations. They show that fees differ by bank and by account at the same bank, so the card you already have may cost nothing abroad or close to 3% on every payment. Check the "using your card abroad" page for your specific account.
Note the minimum cash fees. A £1.75 minimum on a £50 withdrawal is 3.5% before any other charges. Fewer, larger withdrawals usually cost less than many small ones when a minimum applies.
How Visa and Mastercard exchange rates work
When you choose to pay in the local currency, your card network converts the amount into your card's currency. Both networks publish tools that let you see their rate before or after you pay:
- Visa's exchange rate calculator gives "an indication of the rate you may receive" when paying with a Visa card abroad.
- Mastercard's currency converter includes a "Bank Fee" field, so you can add your issuer's percentage and see an estimated total.
Mastercard's page spells out several limits worth knowing (Mastercard, checked September 28, 2026):
- The results are indicative only. Your bank may not use Mastercard's rates to bill you and may add its own fees.
- The rate is tied to the date and time your bank authorizes the transaction, which is usually at the point of sale. If it can't be applied then, the rate at processing time is used.
- If the merchant or ATM converts the transaction, which usually happens when you choose to pay in your card's currency, Mastercard's rates don't apply at all.
That last point is the whole case against DCC in one sentence, from a card network's own page.
How to use the tools in practice
- Before you travel, enter a typical purchase amount, the local currency and your card's currency. Add your card's foreign transaction fee in the bank fee field (Mastercard) or apply it yourself.
- After you get home, look up a few transactions by date and compare them with your statement. A large gap on one payment often means that payment was converted by the merchant.
- Use the result as a benchmark when a terminal shows you a home-currency price. If the terminal's figure is well above your network estimate, decline.
Dynamic currency conversion: what it is and why to decline it
Dynamic currency conversion is the offer to charge your card in your home currency instead of the local one. It shows up on card terminals in shops, hotels and restaurants, at ATMs, and on some checkout pages. Visa describes it as the option to pay in your home currency, "which includes exchange rate and additional fees" (Visa, "What you should know about Dynamic Currency Conversion").
The appeal is certainty: you see the exact dollar or pound figure. The cost is that the rate is set by the merchant's conversion provider, not your card network. UK bank HSBC puts it plainly: paying in the local currency typically costs less because merchants often set higher rates, while choosing local currency means Visa or Mastercard does the conversion at their current rate (HSBC UK).
What the terminal must show you
Visa requires merchants and ATMs offering DCC to display, on screen and on the receipt (Visa):
- the amount in both the local currency and your card's currency, with both currency symbols;
- the exchange rate used;
- any additional fees or markup.
Visa also says merchants and ATMs must not choose for you, and should not use tricks such as different font sizes or colors to steer your decision. If the details are missing or you feel pressured, Visa recommends declining the conversion and reporting it to your card issuer. Declining does not stop you from making the purchase or withdrawing cash.
Common ways DCC is presented
- "Pay in USD/GBP?" with the home-currency button highlighted. Pick the local currency (EUR, JPY, MXN and so on).
- "Guaranteed rate" or "no hidden fees" wording at an ATM. The guarantee is that you get their rate. Choose "without conversion" or "decline conversion" if offered.
- A server or clerk choosing for you. If a handheld terminal comes back already set to your home currency, ask them to rerun it in local currency before you tap or enter your PIN.
- Online prices shown in your currency. Some foreign sites, and some checkout or wallet services, offer to convert the price for you. It is the same trade-off: their rate versus your card network's. Where you can, choose to be charged in the merchant's own currency.
Does DCC avoid the foreign transaction fee?
Don't count on it. Because US rules treat a purchase "with a foreign merchant" as eligible for the fee (CFPB), a transaction billed in dollars by a merchant abroad can still carry your issuer's fee. Whether yours does depends on your card agreement. Either way, you've paid the DCC markup, so the best case is a bad rate with no fee and the worst case is both.
Worked example: one trip, three ways to pay
The numbers below are hypothetical and rounded. The base rate uses the European Central Bank's euro reference rates published on September 28, 2026: 1 euro = 1.1378 US dollars and 1 euro = 0.85785 pounds (ECB). Visa and Mastercard use their own rates, which will differ slightly, and the ECB says its rates are for information only. The 6% DCC markup is an assumption for illustration, not a measured average; real DCC offers vary by provider and you should read the rate on the screen.
US traveler spending €1,000 in Italy
| How you pay | Conversion | Card fee | Total billed |
|---|---|---|---|
| Local currency (EUR), card with no foreign transaction fee | €1,000 × 1.1378 = $1,137.80 | $0 | $1,137.80 |
| Local currency (EUR), card with 3% fee | $1,137.80 | $34.13 | $1,171.93 |
| Accept DCC in USD (assumed 6% markup), no-fee card | €1,000 × 1.2061 = $1,206.07 | $0 | $1,206.07 |
| Accept DCC in USD (assumed 6% markup), card with 3% fee that still applies to foreign merchants | $1,206.07 | $36.18 | $1,242.25 |
The gap between the best and worst rows is $104.45 on €1,000 of spending, for the same meals and hotel nights. Note which choice matters more in this example: declining DCC saves more than switching cards, and it costs nothing.
UK traveler spending €500 in Spain, plus a €200 ATM withdrawal
Using the HSBC UK debit card fees quoted above (2.75% non-sterling fee, 2% cash fee with a £1.75 minimum and £5 maximum) as an example:
| Transaction | Working | Total |
|---|---|---|
| €500 of card payments in EUR, fee-free card | €500 × 0.85785 | £428.93 |
| €500 in EUR, 2.75% non-sterling fee | £428.93 + £11.80 | £440.72 |
| €500 with DCC in GBP (assumed 6% markup) | £428.93 × 1.06 | £454.66 |
| €200 ATM withdrawal in EUR, 2.75% fee + 2% cash fee | £171.57 + £4.72 + £3.43 | £179.72 plus any ATM operator fee |
Whether a UK issuer also adds its non-sterling fee to a DCC payment billed in pounds depends on the bank's terms; some fees are triggered by the currency, others by where the transaction happens. Read your account's fee page rather than assuming.
ATM fees abroad
Cash is where fees stack fastest, because up to four charges can land on one withdrawal:
- Your issuer's foreign transaction or non-sterling fee on the converted amount.
- Your issuer's cash fee, such as HSBC UK's 2% debit cash fee with a £1.75 minimum (HSBC UK). US banks often charge a flat fee for using an out-of-network ATM, and the CFPB notes that whether an ATM is in or out of network depends on your card (CFPB).
- The ATM operator's own fee, which the machine should display before you confirm. Nationwide warns there may be charges outside its control from individual retailers or cash machines (Nationwide).
- A DCC offer on the ATM screen. Mastercard notes that when an ATM converts the withdrawal, its network rates no longer apply (Mastercard). Decline it.
Why not to take cash on a credit card
A credit card cash withdrawal is a cash advance. The CFPB explains that grace periods generally apply only to purchases, so interest on a cash advance usually starts on the day of the transaction (CFPB). Add a cash fee and a foreign transaction fee and a small withdrawal can become expensive. A debit card with low or no foreign fees is usually the better cash tool. If you already carry balances, our piece on why credit cards can become a financial trap covers how these costs compound.
ATM habits that cut costs
- Withdraw less often and in larger amounts when your bank charges a flat or minimum fee, as long as you're comfortable carrying the cash.
- Prefer ATMs inside bank branches over standalone machines in tourist areas; bank ATMs are easier to identify and you can see who operates them.
- Read every screen. If the machine shows a home-currency amount and a rate, look for the option to continue without conversion.
- Pay by card in local currency where card acceptance is good, and keep cash for places that need it.
How to choose a card with no foreign transaction fee
We don't name "best" cards here because terms change and the right card depends on your credit and spending. What to look for:
- Foreign transaction fee: none. In the US, it must appear in the pricing table (CFPB). In the UK, look for "non-sterling transaction fee" and "non-sterling cash fee" on the bank's fees page.
- Cash withdrawal terms, listed separately. A card can be free for purchases abroad and still charge for cash. Nationwide's credit cards, for example, charge no fee on foreign purchases but 2.5% (minimum £3) on cash withdrawals (Nationwide).
- Network acceptance. Visa and Mastercard are widely accepted. If your main card runs on a network with patchier acceptance where you're going, carry a backup.
- The other costs of the card. An annual fee, a high interest rate or a hard credit check can outweigh the fee savings if you only travel once a year. Our guide on how to choose the right credit card for you walks through that trade-off.
- Debit options. Some current accounts and travel-focused debit cards don't charge foreign fees on purchases or cash. These avoid a credit application entirely.
A quick break-even check: on a card with a 3% fee, every $1,000 of foreign spending costs about $30 in fees. If a no-fee card has an annual fee, divide that fee by 0.03 to see how much foreign spending you need each year before it pays off. A $95 annual fee, for example, breaks even at about $3,167 of foreign spending, ignoring any rewards.
For online shopping with foreign merchants, a virtual credit card can add a security layer, but it inherits the fee terms of the account behind it. Check those terms, not just the virtual number.
EU transparency rules on currency conversion
If you pay by card in the EU, some of the strongest disclosure rules for DCC apply at the terminal. Regulation (EU) 2019/518 amended the EU's cross-border payments regulation to add rules on currency conversion charges for card payments (Regulation (EU) 2019/518, Article 1, as adopted). Those rules have since been carried into the codified Regulation (EU) 2021/1230 on cross-border payments in the Union.
Main points:
- Charges expressed as a markup over the ECB rate. Card issuers and parties offering conversion at ATMs or points of sale must express their total currency conversion charges as a percentage markup over the latest euro reference rates issued by the European Central Bank, and disclose it before the payment is made.
- Both amounts on screen. At an ATM or point of sale, the party offering conversion must show the amount in the payee's currency and in your account's currency, and tell you that you can have your own provider do the conversion instead.
- Post-payment messages from EU banks. Since April 19, 2021, EU card issuers must send an electronic message with conversion charge details after a card payment or ATM withdrawal in a Union currency other than the account's currency, with messages sent once a month per currency and an option to opt out (Regulation (EU) 2019/518, Article 2, application dates).
What this means for US and UK visitors: the terminal-side disclosures apply to conversion offered at ATMs and points of sale in the EU, so a DCC screen in Spain or France should show the markup against the ECB rate. That makes comparison easier: a markup of several percent over the ECB rate is the number to weigh against your own card's fee. The post-payment message obligation falls on EU card issuers, so don't expect it from a US or UK bank.
UK rules
In the UK, the Payment Services Regulations 2017 require whoever offers currency conversion at an ATM, at the point of sale or through the payee to disclose all charges and the exchange rate before the payment is initiated (Payment Services Regulations 2017, regulation 57). The UK's retained copy of the EU cross-border payments regulation is shown on legislation.gov.uk as revoked by the Financial Services and Markets Act 2023, with that change noted as not yet applied to the text (legislation.gov.uk). Rely on regulation 57 and card network rules rather than the EU's ECB-markup format when paying in the UK.
US rules
We did not find a US federal rule aimed specifically at DCC. In practice, US cardholders are protected by card network rules, such as Visa's disclosure and no-default-choice requirements, and by their issuer's dispute process. If a merchant converted your payment without offering a clear choice, contact your card issuer promptly, as Visa suggests (Visa).
A checklist before and during your trip
Before you go
- Find the foreign transaction or non-sterling fee for every card you plan to carry, for both purchases and cash.
- Pick one main card with no foreign fee on purchases, and one backup on a different network if possible.
- Pick your cash card separately, with the lowest cash fee, and avoid using a credit card for cash.
- Run a sample purchase through the Visa or Mastercard tool so you know roughly what a fair rate looks like.
At the terminal or ATM
- When asked, choose the local currency.
- If a home-currency amount is already showing, ask for the transaction to be redone in local currency before you approve it.
- Keep receipts that show the currency. They help if you need to dispute a charge.
Online
- If a foreign site offers "pay in USD/GBP", compare with your card network's rate before accepting. Usually, choose the merchant's own currency.
- Remember that some US cards may charge a foreign transaction fee even on dollar-priced purchases from foreign merchants (Capital One).
After you return
- Compare two or three statement lines against the network calculator for the same date.
- If a payment was converted without your consent, raise it with your card issuer.
When this doesn't apply
- Your card and the merchant use the same currency. A US card in a country that prices in US dollars, or a UK card at a sterling merchant, involves no conversion. A US issuer may still charge its fee if the merchant is based abroad, so check your terms.
- You hold a card or account in the local currency. Paying euros from a euro balance involves no conversion at the till; the cost moved to whenever you bought those euros.
- Money transfers. Sending money abroad through a bank or transfer service has its own pricing, covered in our international money transfer guide.
- Business and corporate cards. Terms and dispute rights can differ from consumer cards. Check your company's card program.
FAQ
Is paying in my home currency ever cheaper?
It can be, occasionally, if your card charges a high foreign fee and the DCC markup happens to be small. You can only tell by comparing the rate on screen with your network's rate plus your card fee, which is hard to do in a queue. Choosing local currency is the reliable default.
Why is my refund a different amount from the original charge?
A refund is a separate transaction, so it can be converted at a different rate from the original purchase, and exchange rates move between the two dates. Whether your issuer also refunds its foreign transaction fee depends on its terms, so ask if the difference is significant.
Do hotel and rental car deposits get converted too?
They are charged in the local currency unless you accept a conversion, so the hold and the final bill can end up converted at different times and rates. The home-currency question can come up at check-in or check-out; answer it the same way you would at a shop.
Does a foreign transaction fee affect my credit score?
No. It's just a charge on your account. What affects your score is how much of your limit you use and whether you pay on time; see what a credit score is and how it's calculated.
Can I dispute a DCC charge I didn't agree to?
You can raise it with your card issuer. Visa says merchants and ATMs must give you a choice and must not choose on your behalf, and recommends reporting cases where the required details weren't shown (Visa). A receipt showing your home currency without a disclosed rate helps. Our guide on how to dispute a credit card charge walks through the process.
The next step
Two moves remove most of the extra cost of paying abroad. Today, check your card's foreign transaction or non-sterling fee for both purchases and cash, and switch your main travel card if it's around 3%. On the trip, choose the local currency every time a terminal, ATM or checkout page asks. In our €1,000 example, the second step alone saved more than the first, and it takes one tap.
Sources
All sources accessed September 28, 2026.
- Consumer Financial Protection Bureau, Comment for 1026.60, Credit and Charge Card Applications and Solicitations
- Consumer Financial Protection Bureau, Credit card agreement database
- Consumer Financial Protection Bureau, What types of fees do prepaid cards typically charge? (last reviewed October 31, 2024)
- Consumer Financial Protection Bureau, What is a grace period for a credit card?
- American Express, What You Should Know About Foreign Transaction Fees (updated July 23, 2026)
- Capital One, Foreign Transaction Fees Defined & Explained (March 12, 2026)
- Visa, What you should know about Dynamic Currency Conversion
- Visa, Exchange Rate Calculator
- Mastercard, Currency converter
- HSBC UK, Using your card abroad: fees and charges explained
- Nationwide Building Society, Fees for using your card in a foreign currency
- European Central Bank, Euro foreign exchange reference rates (rates of September 28, 2026)
- Regulation (EU) 2019/518, Article 1 (currency conversion charges), as adopted and Article 2 (application dates), via legislation.gov.uk
- EUR-Lex, Regulation (EU) 2021/1230 on cross-border payments in the Union (codification)
- UK Payment Services Regulations 2017, regulation 57, Currency and currency conversion
- legislation.gov.uk, Regulation (EC) No 924/2009 (UK retained version), status page
This article is general information, not financial or legal advice. Fees and rules vary by card, bank and country; check your own card's terms.