Yes, you can use your credit card abroad, but it will cost you more than using it at home

Most credit cards work in other countries. Your card will be accepted at stores, restaurants, and ATMs in the same way it works in the United States. The catch is that your card issuer and the payment network (Visa, Mastercard, American Express, or Discover) will charge you fees for the transaction, and the exchange rate you receive is rarely the best one available.

Before you travel, contact your card issuer to let them know you'll be using your card abroad. Many issuers flag foreign transactions as fraud if they don't expect them, which can freeze your account when you need it most. You can usually make this call to the customer service number on the back of your card or through your online account.

Key Takeaways

  • Foreign transaction fees typically range from 1% to 3% of each purchase and are charged by your card issuer, not the merchant.
  • Some credit cards marketed to travelers charge no foreign transaction fees, though these cards often have annual fees or other tradeoffs.
  • The exchange rate your card issuer uses is set by the payment network and is usually close to the mid-market rate, but you have no control over it.
  • Notifying your card issuer before travel prevents your card from being blocked as a fraud precaution.
  • Using ATMs abroad to withdraw cash often costs less per dollar than making many small purchases with your card.

How foreign transaction fees work

When you swipe your card abroad, two separate fees can appear on your statement. The first is the foreign transaction fee, charged by your card issuer. This is usually 1% to 3% of the purchase amount. The second is built into the exchange rate itself — the payment network (Visa or Mastercard) adds a small markup to the official exchange rate, typically 1% to 2%.

These fees are not optional. Every major card issuer charges them unless your card specifically advertises that it doesn't. The fee appears on your statement as a separate line item, labeled something like "foreign transaction fee" or "international transaction fee." You pay it whether you're buying a coffee in Paris or withdrawing money from an ATM in Tokyo.

The total cost depends on how much you spend. If you charge $1,000 in purchases abroad on a card with a 2% foreign transaction fee, you'll pay $20 in fees alone, before the exchange rate markup. This is why many travelers use a mix of strategies — some cards for big purchases, cash for small ones, and ATMs for withdrawals.

Cards that waive foreign transaction fees

Some credit cards charge no foreign transaction fees. These cards are marketed to frequent travelers and business people who spend regularly outside the United States. The tradeoff is that most of them have an annual fee, usually between $95 and $550. Whether this makes sense depends on how much you travel and how much you spend abroad.

If you travel once a year and spend $2,000 on your card, a card with a $95 annual fee and no foreign transaction fees costs you $95. A card with a 2% foreign transaction fee costs you $40 in fees. In this case, the card with the annual fee costs more. But if you travel four times a year and spend $8,000 total, the annual fee card costs $95 while the standard card costs $160 in fees — making the annual fee card cheaper.

Cards without annual fees that also waive foreign transaction fees are rare. When they exist, they usually offer fewer rewards or other benefits. Read the full terms before applying — the absence of a foreign transaction fee is the main feature, not a bonus on top of everything else.

Exchange rates and how they're set

When your card processes a foreign transaction, Visa or Mastercard converts the local currency to US dollars using an exchange rate they set. This rate is usually very close to the mid-market rate — the rate banks use to trade currency with each other. However, it is not the best rate available.

You cannot negotiate the exchange rate your card uses. It's set by the payment network and applied automatically. The markup is typically 1% to 2% above the mid-market rate, which means you receive fewer dollars per unit of foreign currency than you would if you could trade at the true market rate. This markup is separate from the foreign transaction fee your card issuer charges.

The exchange rate changes daily. If you're traveling for several weeks, the rate on your first purchase may be different from the rate on your last one. You have no control over this, and it's not something you can plan around — it's simply part of how currency conversion works.

Using ATMs abroad and cash withdrawals

Withdrawing cash from an ATM in another country usually costs less per dollar than making many small purchases with your card. When you use an ATM, you typically pay one flat fee (often $2 to $5) plus the foreign transaction fee and exchange rate markup. If you withdraw $200, that one fee is spread across the entire amount. If you make ten $20 purchases with your card, you pay the foreign transaction fee and exchange rate markup on each one.

Before you travel, ask your card issuer which ATM networks your card can access abroad without extra fees. Many issuers partner with international ATM networks like Allpoint or MoneyPass, which means you can withdraw cash at partner ATMs for free or at a lower fee. Your card issuer's website or customer service can tell you which networks your card uses.

The downside of using ATMs is that you're carrying cash, which carries its own risks. You also can't dispute a cash withdrawal the way you can dispute a fraudulent card charge. Use ATMs for larger amounts and your card for purchases where you want the fraud protection.

Notifying your card issuer before travel

Call your card issuer or use their mobile app to let them know you're traveling and when. Provide the countries you'll visit and the dates you'll be there. This takes five minutes and prevents your card from being blocked as a suspected fraud case.

Card issuers use fraud detection systems that flag unusual activity. A purchase in Tokyo when your card is normally used in Ohio looks suspicious to these systems, even if it's legitimate. If your card is blocked, you'll have to call customer service to unblock it — which is difficult when you're in another country with limited phone access and high international calling rates.

Some issuers allow you to set travel notifications through their app or website. Others require a phone call. Check your card's website or the back of your card for the customer service number. You can usually set a travel notification up to 30 days before you leave.

Comparing your options before you travel

Before your trip, decide whether to use your current card or apply for a different one. If you're leaving in the next few weeks, applying for a new card probably won't work — most cards take 7 to 10 business days to arrive, and you need to activate it and notify the issuer before you leave. If you're planning ahead, you have more options.

Write down how much you expect to spend abroad and how many times you'll use your card versus cash. Calculate the total cost of foreign transaction fees on your current card. Then compare that to the annual fee of a card with no foreign transaction fees. If the annual fee card is cheaper, and you have time before your trip, it might be worth applying.

If you're only traveling once or for a short trip, using your current card and accepting the foreign transaction fees is usually simpler than applying for a new card. The fees are real, but they're not large enough to justify the hassle if you're not traveling often.

What to do if your card is declined abroad

If a merchant's system can't process your card, try a different payment method. Some older merchants or smaller businesses in certain countries don't accept cards at all, or their systems aren't set up to process cards from the United States. This is common in rural areas and small towns.

If your card is declined and you've notified your issuer that you're traveling, call customer service from abroad to find out why. The number is on the back of your card. If the decline is a fraud block, customer service can unblock it immediately. If it's a technical issue with the merchant's system, you'll need to use cash or find another merchant.

Before you travel, ask your card issuer for the customer service number you should call from abroad. Some issuers have a separate international number that's cheaper to call than the US number. Write this number down and keep it separate from your card.

Frequently Asked Questions

Do I need to convert my money to the local currency before I travel?

No. You can use your card to pay in the local currency, and your card issuer will convert it to US dollars automatically. You can also withdraw cash from ATMs using your card. Converting money before you travel at a bank or currency exchange is usually more expensive than either of these options.

What's the difference between a foreign transaction fee and an exchange rate markup?

The foreign transaction fee is a percentage charged by your card issuer on top of the purchase amount — usually 1% to 3%. The exchange rate markup is built into the conversion rate itself and is charged by the payment network. Both apply to the same transaction, so the total cost is the sum of both.

Can I dispute a charge I made abroad if I don't recognize it?

Yes. You have the same fraud protection on foreign charges as you do on charges in the United States. Contact your card issuer's customer service and report the charge as fraudulent. The issuer will investigate and reverse the charge if it was unauthorized. This process may take longer for foreign charges, but the protection is the same.

Will my credit card work in every country?

Visa and Mastercard are accepted in most countries, though acceptance varies by region and merchant type. American Express and Discover are accepted in fewer places. Before you travel, research whether your card brand is widely accepted in the countries you're visiting. Some countries rely heavily on cash or local payment systems that don't accept US cards.

Is it safer to carry cash or use my card abroad?

Your card offers fraud protection that cash doesn't — if someone uses your card fraudulently, you can dispute the charge. Cash is gone if it's lost or stolen. However, carrying some cash is practical because not every merchant accepts cards. Carry a mix: use your card for larger purchases and keep cash for small transactions and emergencies.