Personal Finance

PayPal Mastercard foreign transaction fee guide

Gabriela Peratello

20.12.23 (updated more than 1 year ago)

Read time 3 minutes

PayPal® offers handy credit and credit card solutions for US customers looking to spread the costs of purchase over a few months. But how does it work for international purchases?

This guide covers all you need to know about PayPal MasterCard®¹ international purchase fees - plus we’ve got some international spending tips looking at how to cut the cost of transacting abroad with alternative non-bank services like Wise.

Understanding PayPal MasterCard foreign transaction fee

A foreign transaction fee is a charge - usually an extra percentage - that you’ll pay when you use your card to transact in a foreign currency.

That can be when you’re on a vacation and you spend with a merchant, or make a cash withdrawal - or it can be when you’re shopping online with a retailer based overseas.

That means you may end up paying a foreign transaction fee even when you use your card at home.

So, what’s the PayPal MasterCard foreign transaction fee applied for foreign currency transactions when you’re abroad, or shopping online with international retailers? We’ve got the full guide coming up next.

Read all about foreign transaction fees in our guide

Does PayPal's MasterCard charge foreign transaction fees?

Yes. PayPal’s MasterCard has a foreign transaction fee that’s applied when you spend in a foreign currency².

When you do, the cost of your purchase will be converted back to USD using the MasterCard exchange rate plus the foreign transaction fee. This final amount is what you’ll see on your MasterCard bill at the end of the month.

How much is the foreign transaction fee for PayPal MasterCard?

The foreign transaction fee for PayPal MasterCard is 3%. That means that every time you buy something in a foreign currency, you’ll pay an additional 3% in fees compared to when you spend in USD.

Is it possible to avoid foreign transaction fees with PayPal MasterCard?

You can’t use a PayPal MasterCard to spend in a foreign currency without also paying the foreign transaction fee. You may find you’re asked when you’re overseas whether you’d prefer to pay in USD or the local currency wherever you are.

Even if you choose to pay in USD you’ll pay the MasterCard foreign transaction fee - and you’ll probably get a worse rate of exchange, too.

If you’re asked whether you’d prefer to pay in USD while you’re abroad, it’s usually cheapest to say no.

Impact of foreign transaction fee on international purchases

Foreign transaction fees mean that you’re paying 3% more for anything being billed in a foreign currency - or anything you buy while you’re overseas, even if you elect to pay in USD abroad. That can mean your final credit card bill is higher than you’d expected.

Does the foreign transaction fee apply to online purchases?

Yes. Foreign transaction fees also apply to online purchases where you’re spending in a foreign currency, or where the retailer is based abroad.

Mitigating the impact: smart spending tips

Here are a few tips that might help you do more with your money when shopping and spending in a foreign currency:

Remember to pay in the local currency wherever you are, to get the network exchange rate which is usually the best available
If you’re shopping online double check if a merchant is US based or foreign - it’s not always easy to tell
Consider getting a multi-currency card, such as the Wise card, which has no foreign transaction fee and could allow you to cut the overall costs of transaction in a foreign currency. More on that next.

International money at the tip of your fingers: get the Wise card

Get fee free international ATM withdrawals, up to 100 USD/month, with the Wise card. Keep in mind that ATM operators may charge their own fees.

Open a Wise Account online or in the Wise app, to hold and exchange 40+ currencies, with the mid-market rate and low fees from 0.41%.

Get cash conveniently around the world, with some fee free withdrawals every month, and low fees of 1.5 USD + 2% after that. That can work out cheaper than using your bank card for overseas withdrawals.

Check out these other handy Wise personal account features:
Hold and manage money in 40+ currencies from your phone Send and receive money internationally to 80+ countries with low fees from 0.41% Opt in to receive annual percentage yield (APY) on your USD balance with Wise’s interest feature (subject to change, certain limitations apply — see Program Agreement for more information) Spend in 150+ countries with the Wise card, with transparent and competitive fees Conveniently get instant updates and track transactions on the go with the Wise mobile app Robust security measures and encryption to protect your funds and personal information.

Check out these other handy Wise personal account features:

Hold and manage money in 40+ currencies from your phone
Send and receive money internationally to 80+ countries with low fees from 0.41%
Opt in to receive annual percentage yield (APY) on your USD balance with Wise’s interest feature (subject to change, certain limitations apply — see Program Agreement for more information)
Spend in 150+ countries with the Wise card, with transparent and competitive fees
Conveniently get instant updates and track transactions on the go with the Wise mobile app
Robust security measures and encryption to protect your funds and personal information.

Get a Wise Account
in minutes

Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up-to-date pricing and fee information

Alternatives to PayPal MasterCard: cards that don't charge international transaction fees

Non-bank multi-currency accounts and cards - like the Wise card - can be a great way to cut the costs of international spending.

However, if you’re looking for a credit card with no foreign transaction fee from a major credit card issuer, check out these alternatives:

Card	Fees	Key features
Discover® it Cash Back³	No annual fee Cash advance fee 10 USD or 5%, whichever is greater	Up to 5% cash back No foreign transaction fee
Capital One® Venture One⁴	No annual fee Cash advance fee 3 USD or 3%, whichever is greater	Earn rewards you can redeem against purchases or for airmiles No foreign transaction fee
Chase® Sapphire Preferred⁵	95 USD annual fee Cash advance fee 10 USD or 5%, whichever is greater	Up to 5x rewards on travel, 3x on dining and groceries No foreign transaction fee

Read more on our full guide on no foreign transaction fee cards

Use this guide to the PayPal MasterCard foreign transaction fee that applies whenever you transact internationally - and don’t forget to check out the Wise card as an alternative you can use at home and abroad with low fees and the mid-market exchange rate.

Sources:

Sources checked on 11.21.2023

*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.