Glossary
Foreign transaction fee
A foreign transaction fee is a surcharge — commonly 2–3.25% — added to any purchase billed in a currency other than your card's home currency, including most online purchases from overseas retailers.
The fee applies whenever a transaction is processed or converted through a foreign currency, whether you are physically travelling or shopping online at a store based abroad. It is charged on top of whatever exchange rate the card network applies, and it is separate from any cashback you might otherwise earn on the purchase.
A handful of cards — usually travel-focused or premium products — waive the foreign transaction fee entirely, sometimes only for the first year. If you travel often or shop regularly on international sites, the saved fee can be worth more than a domestic cashback card's reward rate.
Always check whether your card's advertised cashback rate applies to foreign-currency transactions at all — some issuers exclude foreign spend from bonus categories even when the transaction fee still applies.