Information on Merchant Accounts,
Ecommerce and Credit Card Processing

February 10th, 2006 by Jamie Estep

Paying with a credit card in a foreign country…

Filed in: Merchant Accounts |


When people travel they often use their credit card. Their credit card will usually work with the same speed and convenience as it will in the US. Even if the charge is in another currency, the whole process is smooth and efficient.

But, when you get your next monthly statement you may notice something called a Forex charge.

When you pay for something is a country with a currency other than your own you are often charged a Forex or foreign exchange fee. This fee can vary be from 1% up to 5 or 6% of the total amount of the transaction. Visa and Mastercard both charge a 1% fee for making a currency exchange. Most card issuing banks will add an additional 2% on top of that, but several banks have 4 and 5% currency exchange fees.

If you make $3,000 worth of purchases on your credit card, then you could pay an additional $180 in currency exchange fees. If this amount is on your credit card balance then you will also be paying interest on your currency exchange fees.

While this fee is probably unavoidable, you should at the very least, plan for it. Talk to your bank and see what they charge. Add 1% to their charge and that is the minimum you should expect to pay in currency exchange fees for your credit card purchases. An extra $200 is a lot of money when you’re not actually getting anything for it.

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