Anyone who’s travelled internationally and used a credit card to buy something knows about those pesky foreign transaction fees that are applied to every purchase.
An international transaction fee is charged to you, the consumer, by your credit card company whenever you buy something in a foreign currency. And while most of these charges are applied to travellers, they can also be added to your credit card bill when you make a purchase online from a foreign vendor.
In other words, anytime a credit card is used to make a purchase and the transaction needs to be processed into the local currency of the seller, you’ll incur a foreign transaction fee.
The average international transaction fee will be around 3% for purchases made in US dollars. 1% of that fee may go to the payment processor, whether it’s Visa or MasterCard, and the other 2% might go to the bank that issued your credit card, such as Chase or Bank of America.
You might be thinking that 3% doesn’t sound too bad, but these fees can quickly add up if you’re making a lot of small purchases or you’re making large purchases. For example, if you spend $100 and your fee is 3%, you’ll spend an extra $3, but if you spend $1,000, you’ll be paying an extra $30 in fees.
On top of that, most credit cards charge a 3-5% margin on the daily interbank or market exchange rate for the day. For many cards, this rate is at their sole discretion, and you may not know how big that margin is in advance.1 When combined with the fees, you could be paying at least a 6% premium on your purchase by using your credit card. Ouch.
There are some ways that you can avoid costly international transaction fees:
Check your credit cards’ terms and conditions. You might have a card that doesn’t charge these fees. Use that card whenever you’re planning on purchasing products from abroad, as well as when you travel.
If you don’t have a card that doesn’t charge a fee but you make a lot of international purchases, it would be wise to apply for credit cards that don’t charge these fees.
Avoid high international transaction fees by using OFX to send money rather than using your credit card. Whether booking a hotel or purchasing a luxury item, ask your vendor if they accept payment direct to their bank account. If they do, you can use OFX to dramatically reduce your international transaction fees and exchange rate margins. Plus, you can make transfers 24/7--on your own schedule, not your bank’s.
International transaction fees can make shopping more expensive than it has to be, but if you know your way, you can outsmart your bank and save yourself a lot of money.
Lots. With 115 bank accounts in our global network and 50+ currencies (and counting) to make a transfer with, chances are you can OFX it.
Along with all the major global currencies, we have a wide range of exotic currencies to choose from. Simply select your currencies to transfer with in our currency converter and we’ll tell if you can make a transfer and how long it should take.
Below is a full list of our supported currencies.
|AED||United Arab Emirates Dirham|
|HKD||Hong Kong Dollar|
|NZD||New Zealand Dollar|
|ZAR||South African Rand|
|CNY*||Chinese Yuan Renminbi|
|KRW||South Korean Won|
|LKR||Sri Lankan Rupee|
|PEN||Peruvian Nuevo Sol|
|PGK||Papua New Guinea Kina|
|SBD||Solomon Island Dollar|
|TOP||Tongan Pa anga|
*Business customers only
At OFX we have one standard fee of CAD 15 if you’re transferring under CAD 10,000. If you’re transferring more than CAD 10,000, we won’t charge you a transfer fee. (Yes, it’s that simple!)
Occasionally, third-party banks may deduct a fee from your transfer before paying your recipient. This fee may vary and OFX receives no portion of it. If you’re concerned, simply talk to one of our team members to discuss your transfer.