Do You Earn Rewards on Foreign Purchases and Abroad?
This guide explains how foreign purchases earn and how to avoid the fee that eats the rewards.
You earn rewards abroad
Spending overseas or in a foreign currency earns your card’s usual rewards, computed on the amount after it is converted to dollars. Category bonuses generally apply too, so dining abroad on a dining card earns the dining bonus. From a pure rewards standpoint, foreign spending works just like spending at home.
The fee that cancels them out
The catch is the foreign transaction fee. Many cards add roughly three percent to every foreign purchase, and since most rewards are worth less than that, the fee can exceed what you earn, turning a rewarded purchase into a net loss. This is why the card you carry abroad matters as much as its rewards.
How to earn cleanly abroad
Use a card with no foreign transaction fee for all overseas spending, so you keep the full rewards with no offsetting charge. Most travel cards waive the fee for this reason. Also decline dynamic currency conversion at the register, choosing to be charged in the local currency, so you get a fair exchange rate on top of clean earning, as covered in using credit cards abroad.
- Foreign purchases earn your normal rewards.
- Rewards are based on the converted dollar amount.
- A foreign transaction fee often applies, around three percent.
- That fee can outweigh the rewards.
- A no-foreign-transaction-fee card earns cleanly abroad.
Frequently asked questions
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