Foreign transaction fees—what are they and how do they work?
When a consumer makes a purchase in another county or currency, banks and card companies often charge fees to facilitate the transaction. These foreign transaction fees tend to be either a percentage of the transaction amount or a fixed fee. And while fees on foreign transactions are common, some banks or card companies opt to waive them completely.

What is a foreign transaction?
A foreign transaction is a financial transaction that takes place in a currency other than your own. This may be a purchase made abroad, an ATM withdrawal in another country, or an online purchase from a foreign retailer in the local currency.
Foreign transaction fees are often charged by a bank or card company on any transaction made outside the card’s currency or region of use. Fee amounts usually range between 1% and 3% of the transaction amount.
Types of foreign transactions
Foreign transactions include
- cash withdrawals from foreign ATMs,
- online card payments in currencies other than your banking currency,
- and payments made while abroad.
International money transfers would also fall into this category.


Foreign transaction fees—a breakdown
There are traditionally two parts to foreign transaction fees that combine to make up the total fee charged to your account.
First, there’s a currency conversion fee charged for transferring the money from one currency to another, typically around 1%.
Second, there’s the transaction processing fee, usually around 2%, charged by the bank or card company for providing an international service.
Why do we pay foreign transaction fees?
A foreign transaction fee is designed to cover the cost of the process of translating one currency into another through a foreign channel or bank. Unlike normal transfers, transfers between currencies are complex, involve more channels, and take longer, resulting in higher fees.
If you’re planning to send money abroad, make sure to take variables such as currency conversions and transaction fees into account to avoid any unpleasant surprises. Learn more about transaction fees abroad and how they work here.
Avoiding extra foreign transaction fees abroad
There are several ways to cut down costs when traveling to avoid extra foreign transaction fees. For example, do your best to bring a no-fee debit card with you, withdraw currency ahead of travel if possible, and avoid multiple visits to foreign ATMs during your trip. It’s also a good idea to pay in the local currency if you can to sidestep any transaction fees on site.
Foreign transactions—currency exchange rates
In addition to watching out for high foreign transaction fees, it’s important to consider currency exchange rates when making foreign transactions. These rates are based on the global trade markets and are used to calculate the sender’s currency into the recipient’s. Need a refresher on foreign currency exchange? Check out our handy guide here.
Do all companies charge foreign transaction fees?
Not all card companies charge foreign transaction fees—some absorb the costs themselves. To learn what fees you might be subject to, it’s a good idea to review the ‘Fees’ section in the bank or card issuer’s Terms and Conditions. At N26, all account holders can make card payments overseas for free, with no foreign transaction fees on top.
Bank account with travel insurance N26 You and premium account N26 Metal members can also make unlimited ATM cash withdrawals in any currency for free. To learn more about all the N26 benefits of our accounts when it comes fo foreign transactions, simply click on this link.
N26 You and Metal accounts—unlimited free cash withdrawals, whatever the currency
As a N26 You or Metal customer, not only can you enjoy unlimited free card payments globally, but you can also withdraw cash in any currency as often as you want, free of charge, avoiding all those unpleasant foreign transaction fees.
You’ll also be quoted real-time exchange rates to get the best conversion deals when making international transfers. Plus, you’ll benefit from a travel insurance package that includes pandemic coverage.
What is a foreign transaction?
Foreign transactions include any transactions made in a currency other than your own, such as cash withdrawals, card payments when traveling, or an online purchase from a foreign retailer.
What is a foreign transaction fee?
A foreign transaction fee is charged by a card company on any transaction abroad or with a foreign vendor. Fees are usually between 1% and 3% of the transaction value, though some card companies charge fixed rates.
Do all card companies charge foreign transaction fees?
Not all card companies charge foreign transaction fees. With N26, all account holders can make unlimited card payments abroad and overseas, completely free of charge.
Does N26 have any hidden foreign transaction fees?
No, we never hide transaction fees from our customers. All N26 account holders can make unlimited free card payments abroad. Those with N26 You and Metal accounts can make unlimited ATM cash withdrawals abroad, while all Standard account holders incur a small fee.
Does N26 charge foreign transaction fees to withdraw cash from ATMs?
With premium accounts N26 You and N26 Metal, cardholders are never charged to make ATM cash withdrawals, regardless of the currency or frequency. Standard account holders are charged a fixed fee of 1.7%.