If you're planning on using your American Express card abroad to keep earning all those juicy rewards, you'll also want to be aware of the possible costs.
If you carry an Amex, the more you shop with it, the merrier – so you surely want to bring it overseas with you and use it for your purchases. But how much will you be charged in fees and what should you be aware of?
Non-sterling transaction fees
Amex converts all foreign currency transactions into US dollars first, and then into pounds. Amex has its own conversion rate – slightly different from Mastercard’s and Visa’s, but the gap usually isn’t huge. Moreover, Amex charges a 2.99% fee for all non-sterling transactions, which will be added to the conversion rate.
Merchant currency conversion fees (DCC)
When you purchase something abroad using your card, you’re often asked whether you want to pay in the local currency or in pounds. As a rule of thumb, it’s usually better to pick the local currency, and trust your credit card to handle the conversion. Merchant exchange rates are often terrible and there may be extra fees you aren’t aware of – instead, at least you’ll know from the start how much you’ll be charged by Amex.
Cash advance fees
Generally speaking, withdrawing cash with a credit card isn’t the brightest idea. Most cards will charge you an extra fee, and cash advances usually aren’t granted any interest-free periods. The amount you withdraw will start accruing interest immediately until you clear the debt. Amex is no exception to this. It charges a 3% or £3 fee (whichever is the greatest) on your cash withdrawals, which is to be added to the non-sterling transaction fee. It also says it “will charge interest on all balances that result from cash advances from the date the cash advance is applied to your account irrespective of whether you pay the balance in full”.
Credit card surcharges
Credit card surcharges have become rarer in Europe, but it’s worth keeping in mind that they do still exist in some countries – merchants may automatically charge you an extra fee for paying with a credit card (and they might not let you know that they’re doing it). If in doubt, ask before deciding how you want to pay.
EU ban on credit card surcharges
In January 2018 the EU required member states to adopt the Payment Service Directive 2 (PSD2). The PSD2 is a ban on card payment surcharges – that’s when a retailer adds a fee because you’re paying using a credit card. However, it’s important to note that there are limitations and exceptions to this rule and there are other fees that may apply when you pay by credit card. If your card is from a non-EU bank, uses a network other than Visa or Mastercard or is a business/corporate card, then the merchant may still levy a surcharge.
What about alternatives to American Express?
If the Amex card you have (or are considering) isn’t great for overseas use, you may opt to switch to an alternative credit card, or even to take out a second card that you only use when you’re out of the country. Here are some cards with favourable overseas spending terms.
To make comparing even easier we came up with the Finder Score. Costs, perks and suitability across 120+ cards are all weighted and scaled to produce a score out of 10. The higher the score the better the card – simple.
Some digital banks including Curve and Revolut offer alternative ways to get around fees when paying with plastic abroad.
With Curve, for example, you can control multiple cards from your Curve card and app, and even if your card issuer charges exchange fees, Curve will convert the currency for you at the standard Mastercard exchange rate. Just be aware that restrictions and limitations do apply – you can read our full guide to find out more.
Frequently asked questions
No, Amex says that there’s no need to.
To access complete information on the exchange rates applied by Amex, you’ll need to log in to your online account and look for the Foreign Transaction Calculator.
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