---
title: "How to Avoid Fees When Spending Money Abroad"
description: "It's peak travel season, and the hidden costs of spending abroad — foreign transaction fees, bad exchange rates and a sneaky trick called dynamic currency conversion — can quietly add 5% or more to a trip. Here's how each one works and how to sidestep it."
category: "Personal Finance"
category_url: https://boursel.com/category/personal-finance
author: "Hannah Blackwood"
published: 2026-07-03T16:44:00.000Z
updated: 2026-07-03T16:44:00.000Z
canonical: https://boursel.com/article/how-to-avoid-fees-when-spending-money-abroad
tags: ["travel", "foreign-transaction-fees", "personal-finance", "explainer"]
---
# How to Avoid Fees When Spending Money Abroad

It's peak travel season, and the hidden costs of spending abroad — foreign transaction fees, bad exchange rates and a sneaky trick called dynamic currency conversion — can quietly add 5% or more to a trip. Here's how each one works and how to sidestep it.

A trip abroad has an invisible line item: the cost of *paying* for things. Between card fees, marked-up exchange rates and a checkout trick designed to confuse you, spending money overseas can cost several percent more than it should. Here's how to keep that money in your pocket.

## Foreign transaction fees

The most common charge is the **foreign transaction fee** — a surcharge many banks and card issuers add every time you buy something in another currency, [as the CFPB explains](https://www.consumerfinance.gov/ask-cfpb/what-is-a-foreign-transaction-fee-en-1953/). It's typically around **1% to 3%** of each purchase, [and it applies to card spending processed abroad](https://www.investopedia.com/terms/f/foreign-transaction-fee.asp). On a $3,000 trip, a 3% fee is $90 for doing nothing but paying.

**The fix:** carry a card with **no foreign transaction fees.** Many travel-focused credit cards (and some checking accounts and debit cards) waive them entirely. Check yours before you go; if it charges, it may be worth opening one that doesn't.

## Dynamic currency conversion — the trap to decline

Here's the sneakiest one. When you pay by card overseas, the terminal or ATM may ask whether you'd like to be charged in **your home currency** instead of the local one. It sounds helpful. It usually isn't.

This is **dynamic currency conversion (DCC)** — the merchant's payment processor converts the price into your currency on the spot, almost always at a **worse exchange rate** than your card network would use, and sometimes with an added markup, [as Investopedia describes](https://www.investopedia.com/terms/d/dynamic-currency-conversion.asp). You've simply handed the conversion to whoever profits from a bad rate.

**The fix:** whenever a card machine or ATM offers to charge you in your home currency, **decline and choose the local currency.** Let your own card network do the conversion — its rate is typically far closer to the true market rate.

## Cash, ATMs and airport kiosks

For cash, the rules are similar:

- **Airport and hotel currency kiosks** offer convenience at a steep price — wide margins between their buy and sell rates. Avoid changing large amounts there.
- **ATMs** usually give a better rate than a currency booth, but watch for two charges: your own bank's **out-of-network/international ATM fee**, and the local operator's fee. Withdraw **larger amounts less often** to spread fixed fees, use in-network or partner ATMs where possible, and — again — **decline DCC** at the machine.
- Be wary of **standalone ATMs** in tourist areas, which often carry the highest fees and push DCC hardest.

## A simple pre-trip checklist

- **Get a no-foreign-transaction-fee card** and make it your main spender abroad.
- **Always pay in the local currency** — decline "charge in your home currency."
- **Use bank ATMs** for cash, in larger, less frequent withdrawals.
- **Skip airport/hotel exchange counters** for anything but a small emergency float.
- **Tell your bank you're traveling** so payments aren't blocked, and carry a backup card.

The bottom line: the fees that pile up abroad are avoidable, and mostly come down to two habits — using the right card and always choosing the local currency. Boursel gives no individual financial advice; the takeaway is that a few minutes of prep can save you the equivalent of a nice dinner out — or several.

## Sources

- [Dynamic Currency Conversion](https://www.investopedia.com/terms/d/dynamic-currency-conversion.asp)
- [Foreign Transaction Fee](https://www.investopedia.com/terms/f/foreign-transaction-fee.asp)
- [What is a foreign transaction fee?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-foreign-transaction-fee-en-1953/)