Business card FX fee calculator: what non-sterling spend really costs you

Skip to the calculator if you already know your card’s fee. The sections below explain where the number comes from and the one mistake, dynamic currency conversion, that no card protects you from.

What a non-sterling transaction fee is

When you pay in a foreign currency, two things happen. The card network, Visa or Mastercard, converts the amount into pounds at its own wholesale rate for that day. Then your issuer, the bank whose name is on the card, adds a percentage of the converted amount as a fee. That second step is the non-sterling transaction fee, sometimes called a foreign exchange fee, foreign usage fee or non-sterling purchase fee. It is a charge for nothing: the conversion has already been done by the network at no cost to the bank.

The fee usually applies whenever the transaction is not in pounds, and often when the merchant is based abroad even if it bills in pounds. It applies to card-not-present payments, so a software subscription billed from the US in dollars attracts it every month, just as a hotel in Lisbon does. On most statements it is folded into the converted amount rather than listed separately, which is why so many businesses have no idea what it adds up to.

How banks charge it: a percentage on top of the scheme rate

The structure is the same across the high street. Take the network rate, add a fixed percentage, round to the penny. There is no allowance, no cap and no tapering for volume. A business paying £2,000 a month in non-sterling spend on a 2.95% card pays £708 a year in fees, and a business paying ten times that pays ten times the fee.

Cash is worse. Foreign ATM withdrawals on a credit card typically attract the cash advance fee, the non-sterling fee and interest from the day of withdrawal. Even cards with 0% purchase FX often keep a fee on cash. The Capital on Tap fees page sets out its own cash rules, which are unusually light on fees but still charge interest from day one.

The exchange rate itself is a separate cost, and the calculator deliberately leaves it out. Visa and Mastercard rates are close to the interbank rate but not identical, and they differ slightly from each other. A card advertising 0% FX still converts at that rate. Only accounts that do their own conversion at interbank, such as Revolut Business within its monthly allowance, get closer, and they come with plan fees and limits of their own; the Revolut Business comparison works through that trade-off.

Typical figures, from each issuer’s own page

Every figure in the calculator’s table was read from the issuer’s page, linked in the table and in the sources at the foot of this page. The pattern is clear. The big banks’ business credit cards charge NatWest 2.95%, Lloyds 2.95%, HSBC 2.99% and Barclaycard Select 2.99%. American Express states 2.99% across its UK cards. Business debit cards from the same banks charge 2.75%. Expense platforms are little better: Pleo charges 2% on its entry plan and less on dearer plans.

The exceptions are worth naming. Barclaycard Premium Plus charges 0.99% for a £150 per account fee. NatWest Business Plus charges 0% on purchases for £70 per card. Santander’s Business Cashback card charges 0% on purchases in the local currency for £30 a year. Metro Bank is 0% in SEPA Europe; 2.99% elsewhere. Debit cards from Starling and Monzo charge 0% on card spend, and Revolut Business is 0.6% above its allowance. Capital on Tap charges 0% non-sterling transaction fee with £0 annual fee, which is why it anchors the comparison; the high-street bank comparison puts all of these side by side on the other fees too.

Where it bites an agency

The traditional picture of FX fees is travel. For a UK digital agency, or almost any modern small business, the bigger exposure is at the desk. Software is priced in dollars: design tools, hosting, analytics, AI services, project management, email platforms. Some bill in pounds, but a surprising number still charge in USD from a US entity, and each monthly renewal takes the fee. Overseas contractors invoiced in dollars or euros and paid by card go the same way. Advertising platforms let you pick a billing currency, and an account set up years ago in USD or EUR quietly pays the fee on every spend.

These are not large individual amounts, which is exactly why they hide. Ten subscriptions at £50 each is £500 a month; at 2.95% that is £177 a year for nothing. Put ad spend on top and it is not unusual for an agency to be paying several hundred pounds a year in a fee it has never consciously noticed.

Two practical checks. First, look at your last three months of statements for any merchant with a US, Irish or Dutch billing entity, which is where most SaaS companies invoice from, and total the sterling amounts. Second, check the billing currency setting on your ad accounts and any marketplace you sell through. If the total is meaningful, the calculator above tells you what moving it to a 0% card is worth. If you also want cashback on that spend, the cashback calculator adds the 1% on top.

The DCC trap: always pay in the local currency

Dynamic currency conversion is the offer, at a foreign till, ATM or increasingly an online checkout, to be charged in pounds rather than the local currency. It sounds helpful. It is the single most expensive way to pay abroad. The merchant’s payment provider sets the exchange rate, typically several percent worse than the Visa or Mastercard rate, and keeps the margin. Because the merchant is overseas, many issuers still add their non-sterling fee on top. And because the transaction is now in pounds, your 0% FX card cannot help you: there is no conversion left for it to do at the network rate.

The rule is simple and has no exceptions: when asked, choose the local currency. Euros in Spain, dollars in the US, kroner in Denmark. Let your card do the conversion. Brief staff who travel with employee cards accordingly; the employee cards guide has a checklist. For online purchases, if a checkout has defaulted to GBP for a foreign merchant, look for a currency switch before paying.

One more thing no calculator can fix: a fee-free card only helps if the business you pay it from is eligible. Capital on Tap is for limited companies, LLPs and PLCs, not sole traders; the eligibility checker takes a minute, and the Amex comparison covers the sole-trader-friendly BA Accelerating card, which does charge FX.