What is a non-sterling transaction fee?
Written by
Emily Tye
Reviewed by
Amy LancashireA non-sterling transaction fee is a charge your card provider adds when you pay in a currency other than pounds. It's a percentage of the payment – many UK credit cards charge between 2.75% and 2.99%. Some cards, including Zable, don't charge one at all.
It's the currency of the payment that counts, not where you are. So you can be charged it when you're spending abroad or when you're shopping online from home. It's one of several credit card fees worth knowing about before you use your card.
How does a non-sterling transaction fee work?
When you pay in a foreign currency, 2 things happen before the payment reaches your statement in pounds:
Your payment is converted into pounds at an exchange rate set by the card network, such as Visa or Mastercard.
Your card provider adds its non-sterling transaction fee, as a percentage of the converted amount.
The exchange rate and the fee are separate costs. The rate comes from the card network, while the fee comes from your provider. If you're not sure which network your card uses, it's printed on the card. Read more about how Visa and Mastercard compare.
Say you spend €100 on a meal abroad. If the card network's rate turns that into £85, a 3% fee adds £2.55, so £87.55 goes on your statement. This is a simplified illustration: real exchange rates change every day, and fees vary from card to card.
How much is a non-sterling transaction fee?
This varies depending on your provider. Many UK credit cards charge between 2.75% and 2.99% of each payment made in a foreign currency. Some cards don't charge a non-sterling fee at all, such as travel cards designed for spending abroad.
The fee on a debit card can be different from the fee on a credit card, even with the same bank.
To find out what your card charges, check your credit agreement or your provider's fees page. It might be called a non-sterling transaction fee, a non-sterling purchase fee or a foreign currency fee, depending on your provider.
When will I be charged a non-sterling transaction fee?
If your card charges a non-sterling fee, you'll usually pay it on any payment made in a currency other than pounds. That includes:
paying in shops, restaurants or hotels abroad
buying from a website that charges in another currency, even if you're in the UK
withdrawing cash in a foreign currency
Cash withdrawals usually carry a separate cash fee, even on cards that don't charge a non-sterling fee, and some cards charge both. Cash costs apply at home too, which we explain in our guide to credit card cash withdrawals.
How does a non-sterling transaction fee show on my statement?
Providers show the fee in different ways. Some list it as a separate charge in your transactions. Others add the fee to the exchange rate instead, so the payment shows as one slightly higher amount in pounds, with no separate fee listed.
If you're trying to decode a label like 'non-GBP purch fee' or 'non-GBP trans fee', GBP is the currency code for pounds, so the label points to a fee on a payment that wasn't in pounds. Your provider can confirm exactly what it covers.
If you can't work out which payment a charge relates to, our guide to checking an unfamiliar card charge explains what to look for. For help with the rest of your statement, see our guide to reading your credit card statement.
Is it cheaper to pay in pounds or the local currency?
When you pay abroad, a card machine or ATM might offer to charge you in pounds instead of the local currency. If you accept, the shop or ATM converts the price at its own exchange rate. This is called dynamic currency conversion.
With some cards, paying in pounds means your provider won't add its non-sterling fee. But the shop's or ATM's rate is likely to be worse than your card network's, so paying in the local currency is usually the cheaper choice.
Our guide to using a credit card abroad covers dynamic currency conversion in more detail.
FAQs
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
