Fee jungle abroad
Jun 17, 2024
You like traveling? Hey, so do we! And when we travel, it happens sometimes that we indulge in a little something. But when you spend money abroad, you deal with fees abroad. What’s behind it and how banks make money from it, we'll explain to you here.
Fees abroad
If you're in a shopping mood abroad, your bank can charge you various fees: Either for cash withdrawals or for transactions. Either you pay a fixed amount, or your bank charges you based on a percentage. When you pay with a credit card in a store or even online, it’s usually between 1.5% and 3% of the amount charged.
In addition to the fees just mentioned, there’s also the exchange rate surcharge. It's relatively hard to grasp. This is because it’s a non-transparent fee, not shown directly. When converting currencies, banks benefit from an interbank rate that is significantly lower than the exchange rate you see.
How high your bank's exchange rate surchage is, is often challenging to find out. Some banks declare it in a footnote in the detailed price lists. Others emphasize that you should call customer service, and they’ll tell you. You can also calculate your bank's currency conversion markup yourself. Each day's interbank rate is recorded on the currency converter oanda.com. There you can check and compare the exchange rate with the one your bank charged you.
What does that mean specifically?
Suppose you discover a bag on your Copenhagen trip that you absolutely must have. It costs 100 €. According to the exchange rate on June 17, 2025, the bag costs around 94 CHF. But now comes the exchange rate surcharge (for example, 3.5%) and the transaction fees (for example, 2.5%), because you pay by card. So, in the end, you don’t pay 94 CHF, but around 100 CHF. This means the bank earns around 6 CHF from your bag purchase.
At neon, we have competitively low (or no) fees and always show them transparently: With neon free, you pay a exchange rate surcharge of 0.35% abroad and with all other neon offers, such as plus, global, and metal, you pay nothing. There are no transaction fees for card use abroad. For cash withdrawals abroad, there are different fees per plan: with neon free it’s 1.5% per withdrawal, with neon plus 1.0%, with neon global 0.5% – for neon metal it’s free. Compare our prices in detail here.
