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“How to Avoid Foreign Transaction Fees on Your Next Trip”

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Understanding Foreign Transaction Fees

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best financial decisions. For any mortgage service needs, call us at 213-732-3074.

What Is a Foreign Transaction Fee?

A foreign transaction fee is a charge you may incur when using a credit card outside the U.S. or making purchases online in a foreign currency. If you’re not mindful of these fees while traveling, your trip costs could increase quickly. Not all credit cards have foreign transaction fees, so it’s essential to know the details of your card.

How Much Does a Foreign Transaction Fee Cost?

Foreign transaction fees generally range from 1% to 3% of the transaction amount. While this fee might seem small, it can add up quickly. For example, if you spend $400 on various expenses during a trip and your card has a 2% transaction fee, you’ll incur an additional $8 in fees.

How to Avoid Foreign Transaction Fees

Some credit card fees are unavoidable, but here are three ways to avoid paying foreign transaction fees:

  • Use a credit card with no foreign transaction fee: Travel credit cards often do not charge these fees, providing you with the protections of a credit card without the extra cost.
  • Use a debit card with no foreign transaction fee: Some debit cards do not charge foreign transaction fees, but they offer less fraud protection than credit cards.
  • Pay with cash: Exchange or withdraw cash in the local currency, but be aware of potential ATM withdrawal fees and conversion charges.

The Bottom Line

Whether you’re planning an overseas trip or purchasing items from a foreign website, consider which card to use carefully. A credit card without a foreign transaction fee will save you the most money. If you need assistance with your mortgage or financial planning, O1ne Mortgage is here to help. Call us at 213-732-3074 for expert advice and services.

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