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Does Discover charge foreign transaction fees? What to know
A foreign transaction fee is an extra charge that many cards add when you buy something abroad or in another currency. A card with no foreign transaction fee is an easy win for travel, which is why many people use Discover—it comes with no foreign transaction fees.¹
However, with Discover, the foreign transaction fee is only part of the question. It's also important to check that your card works in the location where you're headed and watch out for high ATM fees.
To help you prepare, this guide covers everything you need to know about using Discover abroad.
We'll also introduce the Wise account, which allows you to send, spend, and receive your money across the globe in over 40 currencies – all at the fair mid-market rate.
Does Discover charge foreign transaction fees?
No. Discover doesn't charge a foreign transaction fee on purchases, whether you're paying in person abroad or buying from an international merchant online.¹
However, there's a catch. Discover runs on a smaller global network than Visa and Mastercard, so there are plenty of places, especially across Europe, where merchants won't take it. In other words, you may not be able to actually use your fee-free card when traveling.
If the merchant doesn't take Discover and your card is declined, you'll need to use cash or a backup card, and most cards come with foreign transaction fees.
How the Discover exchange rate works
When you buy in another currency, Discover converts the amount into USD for your statement.
However, the rate it uses to convert your money isn't the mid-market rate (the benchmark rate banks see when they trade currencies). The rate applied to your purchase usually sits a little below it, so there's a built-in cost even without a foreign transaction fee.
Other Discover card fees to watch out for
Discover's pricing is pretty straightforward, with no annual fee and no foreign transaction fees.¹²
The cost to watch is cash.
If you use your Discover card to pull money from an ATM, it counts as a cash advance. That brings a fee plus interest that starts building right away:
| Fee | Amount² |
| Cash advance fee | 10 USD or 5% of the amount, whichever is greater |
| Cash advance APR | 26.49% (variable) |
| Annual fee | No fee |
Because the interest kicks in immediately and the rate is steep, using a Discover card for cash abroad is one of the more expensive ways to get local currency. A regular debit card will almost always cost you less for withdrawals.
How to avoid foreign transaction fees when spending internationally
Here are a few tips on how to keep your costs down when spending internationally with Discover:
- Pack a Visa or Mastercard as backup so you're covered where Discover isn't accepted
- Don't use your card at ATMs abroad to sidestep the cash advance fee and immediate interest
- Pick the local currency over USD whenever a card reader asks which you'd prefer
Many international travelers lose money on Dynamic Currency Conversion, which is when some card readers give you a choice between paying in USD and in the local currency.
If you choose to pay in USD, the store's payment system chooses the exchange rate and typically builds in a margin that works in its favor.
If you turn it down and pay in the local currency, the card network handles the conversion instead, which usually lands closer to the mid-market rate.
No foreign transaction fee is a good point in Discover's favor, but it comes with an important caveat: the card has to be accepted first. In many countries, it isn't.
Plus, getting cash from an ATM comes with steep charges and interest when you use Discover.
If you’re looking for an alternative for spending and sending money across borders, you might want to consider Wise.
| Wise can help you get a better deal on currency conversion. You can convert over 40 currencies at the standard mid-market exchange rate, and we'll show you the fees upfront so you know exactly how much you're paying. |
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Sources
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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