The world is huge

Don't miss any of it

Travel news, itineraries, and inspiration delivered straight to your inbox.

By proceeding, you agree to our Privacy Policy and Terms of Use.


Which Credit and Debit Cards Are Best Overseas?

Ever since we started tracking foreign exchange fees, readers keep asking us to identify the “best” credit and debit cards to use when out of the country. A typical inquiry:

“Is there any way to avoid exchange fees when I travel in Europe?”

The short answer is, “Yes, at least in some countries,” but for most travelers the question is a bit more complicated. Given all of the recent upheaval in the banking business, we decided that an update of our earlier compilations was in order.

“Best” Qualification

Your ideal choice of a credit card depends on a wide range of factors—annual fee, APR, rewards, billing cycles, and such—as well as costs of foreign use. We can’t begin to sort out all of those concerns: Our examinations of the “best” cards focus solely on foreign charges.


The general principles of using plastic in foreign countries haven’t changed since our earlier Foreign Exchange 101 report. As a brief recap, when you use a MasterCard or Visa credit card overseas, the international MasterCard and Visa networks add a conversion fee of 1 percent, and most US banks add their own 2 percent fee, for a total of 3 percent. When you use a debit (ATM) card for cash outside the US, your bank adds some combination of a per-withdrawal fee up to $5, a conversion fee up to 3 percent, or maybe both. By contrast, when you use travelers checks or currency you generally lose anywhere from 5 percent to 10 percent in various conversion fees and charges.

Thus, we still recommend “credit cards for big purchases; debit cards for cash,” and suggest you forget about travelers checks or exchanging US currency. However, we see some minor changes in specific credit and debit card specifics. Here is the latest information we have, as of early May 2009.

Credit Card Charges, Foreign Currency

When you use a credit card outside the US, your charge will normally be in the currency of the country you’re visiting. When that charge goes through the system and reaches your bank, most US banks still tack their own surcharges onto the standard 1 percent charged by the international networks. This is essentially for doing nothing, because the charge is already in US dollars by the time your bank receives it: The bank adds the 2 percent because it can, out of pure greed.

Fortunately, a few banks do not add a surcharge. Here are current charges for some of the larger card issuers:

American Express: 2.7 percent
Bank of America: 3 percent
Barclaycard/Juniper: 2 to 3 percent
Capital One: 0 percent
Citibank/Diners: 3 percent
Diners Club: 3 percent
HSBC: 3 percent (most)
JP Morgan Chase: 3 percent (most)
US Bank: 3 percent
USAA: 1 percent
Wells Fargo: 3 percent

As far as I can tell, no other big card issuer is as generous as Capital One, although USAA comes close. HSBC and Chase offer reduced charges to a small number of “elite” customers; for the most part, their ordinary cards charge 3 percent.

CreditCard Charges, US Dollars

Occasionally, a foreign merchant charges you in US dollars rather than in local currency. Banks are inconsistent in their treatment of such charges: Bank of America, Barclaycard/Juniper, Citibank/Diners, and USAA add the same conversion fee regardless of the currency, but American Express, JP Morgan Chase, and Wells Fargo do not surcharge dollar billings.

Although dollar billings might seem a good idea—at least in some cases—you have to be aware of a possible scam: The merchant may use a lousy exchange rate when it converts your bill into US dollars, so you might wind up paying both a merchant’s private currency markup in addition to a surcharge. The conclusion: Avoid any billing in dollars.

Debit (ATM) Cards for Cash

Until recently, the only extra charge you paid was a flat fee for each withdrawal from a foreign ATM, regardless of the amount of money you received. Lately, however, some big banks have added a conversion surcharge. Here are current costs per transaction and exchange surcharges for withdrawing cash from a foreign ATM:

Bank of America(a) : $0/0 percent
Bank of America: $5/1 percent
Citibank(b): $0/1 percent
Citibank $1.50/1 percent
JP Morgan Chase: $3/3 percent
US Bank $2/1 percent
USAA: $0/1 percent
Wells Fargo: $5/0 percent

(a) At ATMs operated by members of Global ATM Alliance
(b) At ATMs in overseas CITI branches
(c) A Varies by type of account

This compilation shows three ways to avoid losing more than 1 percent on a foreign currency ATM withdrawal:

  • If you have (or open) an account with Bank of America, you can withdraw foreign currencies from ATMs owned by member banks of the “Global ATM Alliance” with no transaction or conversion fee: Westpac in Australia and New Zealand, Scotia Bank in Canada, China Construction Bank in China, Paribas in France, Deutsche Bank in Germany, Santander Serfin in Mexico, and Barclays Bank in the UK. All seven banks have branches throughout their home countries (as well as a few foreign locations); you can locate them through the BofA website. In other countries, however, BofA charges more than most other banks.
  • If you have (or open) an account with Citi you can withdraw foreign currencies from ATMs at Citi branches outside the US with no transaction fee. Citi has branches in dozens of foreign countries: In some, it has retail branches throughout the country; in others, it has only one or two offices in one or two major cities. You can easily find out whether a Citi account will work for your trip by checking the worldwide branch locator on the Citi website.
  • Many smaller banks—or bigger banks with elite-status accounts for some favored customers—add no fee of their own and agree to refund any fees that other banks apply, usually with a limit on the number of withdrawals per month.

Obviously, the spread between the best and worst deals on debit-card withdrawals is wider than the spread among credit cards. The very best deals, such as Citi and the Global ATM Alliance, are as good as the best credit cards, while with the worst deals you lose more than when you exchange currency or travelers checks.

Whatever you do, use a debit card for local currency from an ATM, not a credit card. When you use a credit card to get cash, you’re on the hook for a number of extra fees and charges.

Debit Cards for Purchases

Most debit cards are MasterCard or Visa branded, so you can use them to shop as well as for ATM cash. When you use your ATM card that way, most banks charge the same as on their credit card purchases. HSBC, however, adds only 1 percent on those charges rather than the usual 3 percent.

The US banks I’ve contracted tell me that when you use a debit card with a PIN to purchase something in a foreign country, whether or not that transaction is considered a purchase or cash withdrawal depends on the “merchant code” on the transaction. Unless it’s a financial institution, the charge is treated as a purchase. However the US banks don’t seem to be very sure of this point.

The PIN Hassle

I’ve recently reported that European banks are generally switching from the stripe-plus-signature system we use in the US to a smart chip-plus-PIN system for maintaining credit card security. Although international MasterCard and Visa rules require all participating merchants to continue to honor US cards, no matter where they are, travelers report problems in using their non-chip cards, especially in Scandinavia and in may automated vending systems. At this point, the international networks really have no solution to this problem.

Some US holders of credit cards have obtained PINs so they can use their cards for cash withdrawal (not a good idea). I haven’t been able to determine whether those PINS work in European situations that require PINS. Reader reports would be most welcome.

Buyers’ Guide

My overall recommendations remain the same as they’ve been for several years. To minimize your exchange losses:

  • Put big charges on credit cards. If you travel outside the US a lot, consider getting a Capital One card, with its zero surcharge (and a reasonably generous reward program). Otherwise, USAA and many smaller banks and credit unions charge only 1 percent. Even cards with a full 3 percent surcharge are still an efficient way to pay outside the US.
  • Use your debit (ATM) card for whatever local currency you need. If your itineraries permit, use one of the limited no-fee systems. Otherwise, minimize your losses by withdrawing in fairly large amounts each time.

In short, used plastic, but make sure it’s the right plastic.

We hand-pick everything we recommend and select items through testing and reviews. Some products are sent to us free of charge with no incentive to offer a favorable review. We offer our unbiased opinions and do not accept compensation to review products. All items are in stock and prices are accurate at the time of publication. If you buy something through our links, we may earn a commission.

Top Fares From