Guide to overseas credit card payments: comparisons on FCC, CBF and FX charges

With the rise in online shopping, credit cards have become the go-to method for many individuals making international payments. Despite their convenience and efficiency, credit card transactions can incur various fees that directly impact the total amount paid. For businesses engaged in cross-border transactions, procurement, employee expenses, and more, using credit cards for international payments may be essential. This article will explore the specific fees related to credit card transactions on international platforms, such as Foreign Currency Conversion (FCC) fees and Cross-Border Fees (CBF) for foreign currency payments. It will also compare different bank credit cards, emphasising the Airwallex Borderless Visa Card for its fee exemptions.

What fees are involved in foreign credit card payments?

When using a credit card for overseas transactions, you may be charged ‌the following fees:

1. Foreign Currency Conversion Fee (FCC): This fee is charged by the bank or credit card issuer when you make purchases in a foreign currency to cover the cost of currency conversion.

2. Cross Border Fee (CBF): This fee applies to overseas online transactions paid in HKD.

3. Dynamic Currency Conversion (DCC): This fee is charged when you opt for physical merchants abroad to settle transactions in HKD.

4. Exchange rate discrepancies: Different credit cards may have varying exchange rates, directly affecting your final payment amount.: 

Foreign Currency Conversion Fee (FCC)

The Foreign Currency Conversion Fee (FCC) is specifically for foreign currency transactions. When you use a credit card issued by a Hong Kong institution to make purchases in a currency other than HKD, most credit cards will charge this fee, typically ranging from 1.95% to 2%. The purpose of this fee is to cover the costs associated with converting foreign currency into the local currency.

In which situations do you need to pay the FCC?

• In-store purchases at overseas merchants: using your credit card at local restaurants, shops, or hotels while on business trips or travelling, and making payments directly in the local currency.

• Online shopping on foreign websites: purchasing goods or services on websites that settle transactions in a currency other than HKD.

Cross Border Fee (CBF)

The Cross Border Fee (CBF) is an additional charge incurred when you choose to have a merchant settle a transaction directly in HKD while making purchases in-person at overseas locations or on the online platforms of overseas registered merchants. The merchant's system will convert the foreign currency transaction into HKD for immediate payment by the customer.

In which situations do you need to pay the CBF?

• Settlement in HKD: When a merchant lists products in foreign currencies but provides the choice to settle transactions in HKD, and you opt to pay in HKD, a CBF will be applied. Some merchants or online platforms may automatically set the transaction settlement to HKD, resulting in unintended additional charges.

Common overseas merchants that often offer settlement in HKD

Common overseas merchants that often offer settlement in HKD include:

• Hotels: particularly in popular tourist destinations, hotels often provide the option to settle transactions in HKD.

• Subscription services: popular monthly subscription services such as Netflix, Spotify, etc.

• eCommerce platforms: some cross-border eCommerce platforms like Amazon or eBay.

The importance of exchange rate discrepancies

In addition to FCC and CBF, the exchange rate used by credit cards is also a factor that affects your final payment amount. Due to frequent fluctuations in exchange rate, paying credit card balances at different times can‌ result in increased total costs, making it more challenging for businesses to effectively control expenses.

Comparison of fees for overseas transactions with credit cards

Below is a comparison table of the commonly seen credit cards on the market in terms of transaction fees when used for overseas transactions:

*The information above was retrieved from various card companies in January 2025. This data is for reference only. For more details, please visit the official websites of each company.

Which credit cards waive overseas transaction fees?

Various credit cards offer different benefits. While options like UnionPay cards have low transaction fees, their coverage may be limited. Certain banks have now introduced credit cards with 0% FCC and CBF fees, to cater to different customer needs. However, few cards completely waive these fees.

The Airwallex Borderless Card stands out by offering a 0% overseas transaction fee and competitive exchange rates, making it ideal for businesses engaging in frequent international transactions. Its fee-free policy enables businesses to effectively cut costs, whether for employee travel expenses or online transactions.

Airwallex Borderless Card: 0% foreign card transaction fees

The Airwallex Borderless Card is tailored for businesses involved in frequent international transactions. When utilised for cross-border payments, funds are directly debited from the corporate account. Here are its key features:

1. Global coverage: issue multi-currency cards in 40 markets.

2. $% foreign transaction fees: Regardless of foreign currency transactions or cross-border Hong Kong dollar payments, no additional fees are charged, and there are no hidden costs.

3. Favourable exchange rates: Businesses can hold multiple currencies in one account, getting rid of currency conversion fees when paying in different countries. In case of insufficient funds in the required currency, Airwallex automatically applies competitive market exchange rates, converting available funds into the local currency, minimising exchange expenses.

4. Convenient management tools: Through ‌Airwallex’s mobile application, businesses can manage all employee cards and transaction records anytime, reducing the risk of errors.

Airwallex offers various flexible payment solutions for corporate users to meet different cross-border needs. The Borderless Card can be used for payments at any location accepting Visa, ensuring convenient usage. Businesses can easily open corporate and employee cards within minutes; they can also track and record employee expenses in real-time, effortlessly managing expenditure.

When using a credit card for overseas transactions, understanding the fee structure is crucial. If you wish to reduce unnecessary expenses during international transactions, the Airwallex Borderless Card is one of the favourable options in the market. With Airwallex, you can significantly save on overseas transaction fees, manage cross-border fund flows more efficiently, and improve the operational efficiency of your global business. For companies that often engage in overseas transactions, this card not only helps save costs, but also improves the flexibility and security of payments, making it a worthwhile consideration as a primary tool for international spending.