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What to Know about Credit Cards with no Exchange Rate Fees

By Edited Sep 12, 2016 0 0

Exchange rate(60706)

Credit cards with no exchange rate fees sound like a utopian idea with the rising interest rate and the increasing greed of the banking sector all around the world. Most of the people are not even aware of the exchange rate fee that they are being charged on their credit cards while making international transactions. There are only a couple of credit cards which have zero exchange rate charges for international dealing. Some of the cards have policy of no exchange rate fees only within Europe or United Kingdom while other cards charge fees as high as 3% on transactions to other countries. But credit cards are still preferred over carrying liquid cash while traveling in other countries.


Holiday Package

While planning holidays abroad, you must keep in mind that transactions through credit cards can be really expensive once the hidden charges and fee is incorporated. The holiday package to Dubai or Malaysia can actually be costing you much more than you are looking at. Most of the international transactions that are carried out through credit cards are charged depending on the wholesale rate of Visa or MasterCard. The charges are divided into two parts: the percentage of fees charged by the payment network i.e. Visa, MasterCard, American Express and the percentage of fees charged by the card issuer I.e. Citibank, Bank of America etc.

Most of the people in United States and United Kingdom do not even know that while paying their bill at a hotel, they are being charged 2 to 3 percent of the bill as transaction or exchange rate fees. This is because most of the banks keep these charges as hidden.  So if you are buying something worth of 100 pounds in Malaysia, you will be paying approximately 2.75 to 3 cent in exchange rate to your bank.

Keep a Check

Credit Card Transaction

In some cases it is said that the exchange rate fees paid to the bank is much less than getting your currency exchanged at a money changer or exchange rate counters. In addition to this, the hassle of going to the money changers’ office to get your money converted is also not worth it in many cases. Thus most of the people are happy to pay the additional exchange rate fees on their credit or debit cards instead.  But it is still advised to all the holiday makers to keep a constant check on the exchange rates of their currency and not let their banks take advantage of their ignorance. Frankly, not many people have the time to check the newspapers or televisions for the exchange rate and more than half the people do not even go through their annual credit card statement in detail to check if any additional charges have been added to their transactions.

Credit cards and Foreign Currency Transaction Fee

Capital One

Credit cards with no exchange rate are a relatively rare concept. That is why only two or three credit cards including nationwide visa card, Lombard credit card and capital one credit card are there which have almost zero percent foreign currency transaction fees. Visa and MasterCard charge a standard 1% on all foreign transactions while capital one credit card has zero percent charges. These cards are also unique in the sense that they not only have zero exchange rate fees but they also provided competitive interest rate options for the amount of money you are saving on foreign transactions.

But this does not mean that the banks that are issuing these credit cards do not charge fees on withdrawing of cash. The charges for withdrawing cash are mostly around 1.25 cent but can vary from bank to bank. In addition to this, there are some other cards which levy as low as one fees pound on the overseas transactions being carried out in Europe or United States. These cards can be a good option too for people planning to spend their vacations in Europe or United States only. 

The Best Option Available

Credit cards with no exchange rate fees are the best option available if you want to save some cash while you are on your holidays. But it does not mean that if a card is providing a cheap or no exchange rate fees policy then it can be classified as a good credit or debit card. The priorities of people differ according to their taste and the amount of money they have. Therefore you should always go for a card which provides you with the best package suitable for your budget and taste.

Credit card bills

You can always keep more than one card to facilitate your holidays while getting the best of other facilities too. Another thing that should be kept in mind is to pay the credit card bills on time to save the extra interest charged by your bank. In addition to this, many credit cards including those not charging any exchange rate fees provide better rates than money changers. Carrying liquid cash in your pocket might not be the best idea especially when you are in a foreign country as a tourist or for business.


Credit cards with no exchange rates provide a safer and less expensive option in this regards and are thus preferred by many foreigners. People also need to make it a habit to look at the exchange rates regularly and to study their credit card statement to prevent them from being robbed by the banking sector. Most of the people as mentioned earlier do not even know the exact charges that they are paying for using their credit or debit card. This ignorance on part of the consumers is what the banking sector takes advantage of and mostly charge fees higher than the exchange rate in the market. Never be afraid to question your bank on the charges that they are making you pay and while planning for holidays, paying your bills at a foreign hotel or buying souvenirs for your friends, going for credit cards with no exchange rate fees is the best option available in the market these days.



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