Bank of America cash rewards programs attract many travelers who want to earn on everyday spending, but confusion often surrounds foreign transaction fees. Understanding whether these fees apply can save cardholders money when using their card abroad or on international purchases.
This article breaks down how Bank of America cash rewards interact with foreign transaction fees, helping you maximize benefits while avoiding surprise charges on your statements.
| Card Type | Foreign Transaction Fee | Cash Rewards Eligibility | Best Use Case |
|---|---|---|---|
| Bank of America Customized Cash Rewards | Yes, 3% | Earn rotating 3% in categories | Optimized quarterly category rotation |
| Bank of America Travel Rewards | Yes, 3% | Earn 1.5 points per dollar | Consistent travel point earning |
| Bank of America Premium Rewards | Yes, 3% | 2 points per dollar on travel | Travel focused premium benefits |
| Bank of America® Advantage SafeBalance Banking | Yes, 3% | Not designed for rewards | Banking-focused, minimal fees |
Understanding foreign transaction fees on cash rewards cards
Foreign transaction fees appear on statements when you make purchases in a currency different from the card’s billing currency. Bank of America applies this fee across nearly all its consumer credit products, including cash rewards variants, at 3% of the transaction amount.
Because the fee is charged per transaction, frequent international travelers or those shopping on foreign sites see the cost add up quickly. Checking the foreign currency conversion policy helps you choose the right payment mix while traveling.
Even with cash rewards, you still pay the fee, so it is important to factor it into your spending decisions and rewards calculations.
How cash rewards programs work with foreign purchases
Bank of America cash rewards programs calculate earnings based on the transaction amount in the billing currency before the fee is applied. This means you earn rewards on the original purchase, but you also incur the 3% foreign transaction charge.
For example, a $100 purchase abroad in euros might earn you 1.5 or 3% cash back depending on the card, while a separate $10 fee appears for the foreign transaction. Rewards and fees are tracked separately, so you still net fewer dollars in your pocket.
Reviewing your card’s specific rewards structure helps you estimate the true cost and benefit of using it internationally.
Strategies to minimize foreign transaction costs
Choosing the right payment method abroad can significantly reduce the impact of foreign transaction fees. Some travelers use no-fee cards from other issuers for daily expenses and reserve Bank of America cash rewards cards for purchases where rewards outweigh the cost.
Paying in the local currency instead of opting for dynamic currency conversion at point of sale avoids additional markups. Setting up travel notifications also prevents fraud alerts that could interrupt your spending while you are away.
Tracking your cash rewards earnings versus fees helps confirm whether your card remains the best option for your travel spending pattern.
Evaluating rewards versus fees for international use
When deciding whether to use a Bank of America cash rewards card abroad, compare the percentage you earn in rewards against the 3% fee. High travel spending in bonus categories can still make a card valuable even with the fee attached.
Low spending travelers may find it more cost-effective to use a card without foreign transaction fees, even if it offers lower or no cash rewards. Consider your typical international purchase volume and category mix when choosing your payment approach.
Periodic reviews of statements help you spot patterns where fees outweigh benefits, prompting a switch in strategy or card usage.
Key takeaways for using cash rewards cards abroad
- Expect a 3% foreign transaction fee on most international purchases.
- Cash rewards still earn on the original transaction amount before the fee.
- Compare rewards earnings against fees for your typical spending patterns.
- Use no-fee cards for everyday spending abroad to reduce overall costs.
- Set up travel notifications and pay in local currency to simplify transactions.
FAQ
Reader questions
Do I still earn cash rewards on purchases made outside the United States?
Yes, you earn cash rewards based on the transaction amount in the merchant’s currency, but the 3% foreign transaction fee is also applied.
Is the foreign transaction fee applied before or after rewards are calculated?
The fee is applied to the transaction, and rewards are calculated on the original purchase amount before the fee is deducted from your payment.
Can I avoid foreign transaction fees by paying in US dollars while abroad?
No, choosing to pay in US dollars typically triggers dynamic currency conversion, which often carries its own higher fees and unfavorable rates.
Will contacting Bank of America lower the foreign transaction fee on my cash rewards card?
Bank of America generally does not waive the foreign transaction fee on standard cash rewards cards, so fee negotiation is unlikely to change your rate.