🌍 Guide · 2 min

What Is a Currency Conversion Fee?

Whenever the currency you spend in differs from your card's settlement currency, a conversion happens — and that conversion carries a fee. Chinese Visa/Mastercard cards have a hidden trap: non-USD spending is often converted via USD first (double conversion), ~1%–1.5%; UnionPay converts directly and usually waives it.

When it applies

You pay in THB in Thailand but your card settles in CNY → THB ≠ CNY, conversion needed → conversion fee. If your card were a THB account, no conversion and no fee. Core rule: the fee applies when transaction currency ≠ card settlement currency.

Double conversion (watch out on Chinese cards)

On Visa/Mastercard rails, many non-USD currencies are first converted to USD, then USD to your home currency — two conversions, and the ~1%–1.5% in between is the conversion fee. UnionPay converts the local currency straight to your home currency, skipping a step and usually waiving it.

How to avoid: (1) in non-USD regions with a CNY card, prefer UnionPay; (2) use a card that states "no currency conversion fee"; (3) don't confuse it with DCC — DCC is an extra markup when you pick home currency (see DCC).

Do "all-currency" cards avoid it?

They avoid the conversion fee, but not DCC. An "all-currency" card converts the local currency directly to your home currency (no USD middle step), so it skips the ~1.5% double-conversion fee — that's its selling point. But DCC is separate: it's triggered when you pick "pay in home currency" at checkout, and the merchant adds 3%–7% regardless of your card. So even with an all-currency card you must still choose local currency, or you'll be DCC'd anyway. The foreign transaction fee depends on the specific card (some all-currency cards waive it, some don't).

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