What does foreign transaction fee mean?
A foreign transaction fee is the “penalty” you will have to pay for when you choose to make payments in a foreign currency through your credit card. There is huge controversy nowadays with these foreign transaction fees required by the issuer, because it seems many times these are not payable only if you for example as an U.S. citizen make a purchase in Euros, but also when you are in a foreign country but making your purchase in US dollars.
That is why you need to read the fine print carefully and all the way down, as the foreign transaction fees are many times ‘hidden’ there somewhere, and if you don’t pay attention, on return from your trip to Canada great surprises may await you. Foreign exchange fee, foreign transaction fee, or currency conversion fee might give you a headache as to their true meaning, while actually these can be used interchangeably, because all come to mean the same thing actually. Issuers such as the Visa or the MasterCard will add 1% for your purchases outside US, while it is known that Discover does not have a foreign transaction fee at all, but the drawback is that you can hardly find places outside US where it will be accepted without problems.