A foreign transaction fee is an additional fee charged by the issuing bank, financial institution, etc. when using a credit or debit card for an international transaction. Typically, a foreign transaction fee consists of two fees, one from the card issuer, such as Chase, Bank of America, or Citibank, and the other from the card issuer, such as Visa, MasterCard, Discover, or American Express. foreign transaction fees usually range from 1% to 3%, depending on the card issuer.

Scenarios involving foreign transaction fee

1.Shopping abroad

If you are traveling abroad, all the credit or debit card purchases in accommodation, shopping and restaurants will incur foreign transaction fee, which means you will pay an extra 3% for each purchase.

2.Direct cash withdrawal from foreign ATMs

When you use your bank card to withdraw cash from ATMs abroad, in addition to the ATM usage fee that may be charged, the card-issuing bank may also charge a certain percentage of foreign transaction fee according to the amount of cash withdrawn.

3. Cross-border e-commerce

Enables you to purchase goods or services from foreign merchants (e.g. Amazon, eBay, etc.) via the Internet while you are in your home country, and may also incur foreign currency transaction fees if the currency of payment is different from the currency of your account.

4. Corporate Cross-Border Transactions

When enterprises order products and raw materials from foreign suppliers, the process of paying for the goods may incur foreign transaction fees. When making international remittances, financial institutions usually charge foreign currency transaction fees. This applies to cross-border transfers between individuals and businesses.

The foreign transaction fee varies significantly among different banks, mainly in terms of the fees charged and how they are calculated.

Bank of China, each cross-border remittance handling fee for the remittance amount of 1 ‰, the minimum of 50 yuan, the maximum of 260 yuan, each remittance amount of 1 ‰, the minimum charge of 50 yuan / pen, the maximum charge of 260 yuan / pen; another charge for telecommunications, Hong Kong, Macao and Taiwan areas of CNY 80 / pen, non-Hong Kong, Macao and Taiwan areas of CNY 150 / pen. Applicable to cross-border remittance services such as wire transfer

ICBC, ICBC credit card does not charge a separate handling fee for overseas spending, however, if the transaction involves currency exchange, there may be some impact of exchange rate fluctuations. For remittance to other banks abroad, 1‰ of the remittance amount will be charged, with a minimum of RMB50/transaction and a maximum of RMB260/transaction. Remittance to overseas ICBC is charged at 0.5‰ of the remittance amount, with a minimum of RMB 50/stroke and a maximum of RMB 260/stroke.

Bank of America, Bank of America's foreign transaction fee is usually charged at 3% of the transaction amount, which includes a 1% fee charged through the credit card transaction network (e.g., Visa or Mastercard) and a 2% fee charged by Bank of America as the card issuer. Additionally, some Bank of America credit cards may have foreign transaction fee waivers. For example, certain travel credit cards or premium credit cards may waive this fee.

Payment platforms, compared to traditional transfer methods, third-party payment platforms have a lower fee structure first, which is especially suitable for cross-border e-commerce and foreign trade enterprises to use, and can effectively reduce transaction costs. For example, users can choose XTransfer as your payment platform, which has gained the trust of more than 300,000 foreign trade enterprises with the advantages of convenient account opening, low rates and strict wind control. It has a cash withdrawal fee of 0.4%. Ordinary withdrawal/transfer handling fee,: the more you settle foreign exchange, the lower the rate, as low as 0.1%.

Based on the above description, we can see that this kind of fee is actually quite common, whether as an individual traveling abroad, or as a business cross-border transactions, will involve FOREIGN TRANSACTION FEES, we can pick the most suitable transaction methods, financial institutions or platforms, as a way to avoid unnecessary transaction costs.