Quick Summary:
- Foreign-issued cards may incur fees when processed by a US merchant.
- Paying in USD can help avoid dynamic currency conversion mark-ups.
- Deposit pre-authorisations can be larger and may affect pending totals.
- Check your card terms and carry a fee-free backup credit card.
Hola’s credit-card-only car hire model is designed to keep pick-up smooth, but it can raise a common traveller concern, will your foreign-issued credit card trigger foreign transaction fees in New York? The accurate answer is that Hola does not add a “foreign fee” itself, but your card issuer may, because the rental charge is processed by a US merchant. Understanding what triggers fees, and what the charge at the counter can look like, helps you avoid surprises.
In New York, most car hire payments are taken in US dollars, by a rental counter or parking facility whose merchant account is based in the United States. If your card is issued outside the US, many banks classify that as a foreign transaction even when no currency conversion is involved. Some issuers charge a percentage fee, others do not. The key is that the fee decision is made by your card issuer using the transaction’s location, currency, and merchant category.
Why foreign cards can be charged “foreign transaction” fees in New York
Foreign transaction fees are usually set by your card issuer, and they are often a percentage of the amount billed, sometimes plus a fixed amount. They are commonly triggered by either of these situations: the transaction is processed outside your home country, or the transaction is billed in a foreign currency. In New York car hire, the “processed outside your home country” condition is the one that often applies.
Even if you pay in USD and your card converts at a fair exchange rate, your bank may still add an overseas usage fee because the merchant is located in the United States. That can apply to prepayments, counter payments, and any later adjustments such as tolls, fuel, damage, or admin charges.
How Hola’s credit-card-only payment typically works for car hire
With most New York car hire, you will see one or more of the following card events:
1) A rental charge, either prepaid online or charged at pick-up, depending on your selected option and the supplier’s rules.
2) A security deposit pre-authorisation, often taken at the counter, to cover incidentals. This is not a completed charge, but it reduces your available credit temporarily.
3) A finalisation or adjustment at return, when the rental is closed and the pre-authorisation is released, sometimes replaced by a final charge if required.
Issuers can apply foreign transaction fees to completed charges, and some issuers also apply them to pre-authorisations that later drop off. If your issuer does that, you might see a temporary fee line in your app that disappears when the hold is released, or you might see a fee that remains and is later reversed. This is one of the main reasons travellers feel surprised at pick-up even when the underlying rental cost has not changed.
If you are collecting near the main airports, the merchant descriptor will normally relate to the rental brand or airport location. For example, travellers comparing options around JFK often start with car rental at New York JFK, where charges are typically processed by the on-site rental operator in the US.
Dynamic currency conversion, the fee you can actually avoid
A separate issue from “foreign transaction fees” is dynamic currency conversion (DCC). This is when you are offered the option to pay in your home currency at the point of sale, rather than in USD. It can appear on a payment terminal as “Pay in GBP/EUR?” with an exchange rate shown.
DCC is not a bank fee, it is a conversion service with a built-in margin. In many cases the exchange rate is worse than your card’s normal conversion rate, and you can end up paying more even if your card has 0% foreign transaction fees. For New York car hire, the simplest way to reduce the risk of extra cost is usually to choose to pay in USD if asked, and let your card issuer handle the conversion.
When fees may show up at pick-up, and why amounts look “wrong”
At the counter, it is common to see a pre-authorisation taken for the deposit plus the estimated rental. This can be larger than you expect, particularly if you have chosen optional extras, one-way drop-off, or if a higher deposit applies to certain driver profiles. If your card issuer charges a percentage fee on overseas transactions, that fee is calculated against the authorised amount, not just the final rental cost.
If you are flying into Newark and picking up nearby, you may see the merchant location listed as New Jersey rather than New York. That does not change the fee logic for most foreign-issued cards, it is still a US transaction, but it can help you reconcile the charge in your app. Hola travellers often compare Newark options such as car rental in New Jersey EWR before heading into Manhattan.
Practical steps to avoid surprises with a foreign-issued credit card
Check your card’s overseas fee setting before travel. Many UK and EU banking apps display “non-sterling transaction fee” or “foreign transaction fee”. Look for the percentage, and whether the card is fee-free in the US.
Bring a back-up credit card in the same driver’s name. Some counters require the main driver to present the card used, or at least a credit card for the deposit. A second fee-free card can help if the first card is declined or has a low available limit after the deposit hold.
Avoid paying in your home currency at the terminal. If DCC is offered, choosing USD often reduces the likelihood of paying an inflated exchange rate.
Allow extra credit headroom for deposits and holds. Deposits can be substantial, and pending holds can take days to release after return. Factor this into spending plans for New York.
Does the rental brand or location matter for foreign fees?
Your issuer’s foreign transaction fee is driven mainly by where the merchant is based, not the brand name. A charge processed by a US-based rental company in the New York area generally qualifies as an overseas transaction for a UK-issued card, even if you booked from home. The brand can matter indirectly, because different suppliers have different deposit levels, and a higher authorised amount can increase the size of any percentage-based fee.
If you are comparing suppliers around Newark, pages like Avis car rental in New Jersey EWR and Dollar car rental Newark EWR help you understand which operator you are paying at the counter and where pick-up occurs, which can help with planning your payment approach.
How to recognise foreign fees on your statement
Foreign transaction fees may appear as a separate line item, or they may be bundled into the exchange rate used. Common wording includes “non-sterling transaction fee”, “overseas service charge”, or “foreign usage fee”. If you pay in USD and your statement still shows an extra percentage fee, that confirms your issuer charges based on merchant location.
If you see two pending entries, one for the rental and one for the deposit hold, that is also normal. The deposit hold should release after the rental is closed, but release times vary by issuer and can take several working days.
FAQ
Will Hola charge me a foreign transaction fee for car hire in New York? Hola does not set your card’s foreign transaction fee. If a fee appears, it is typically applied by your card issuer because the transaction is processed by a US merchant.
If I pay in USD, can my UK card still charge an overseas fee? Yes. Many UK-issued cards charge a fee based on the merchant being outside the UK, even when you pay in USD and no DCC is used.
What is dynamic currency conversion, and should I accept it? DCC is when the terminal offers to charge you in your home currency. It often uses a worse exchange rate, so paying in USD is usually the safer choice for keeping costs predictable.
Can a security deposit trigger extra fees even if it is only a hold? It can. Some issuers apply fees to pre-authorisations and later reverse them, while others do not charge fees on holds. Your bank’s policy determines what you see.
How can I reduce the risk of payment problems at pick-up? Bring a credit card with sufficient limit, ideally one that is fee-free for US transactions, and keep a second card available in the main driver’s name in case of declines or high deposit holds.
