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Q&A: Options for avoiding foreign transaction fees

Summary

If you plan to travel internationally, you shouldn’t be paying the 3 percent foreign transaction fee. There are now plenty of cards with no annual fee and no foreign transaction fee you can sign up for

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QuestionDear Cashing In,
I’m going to Mexico in a couple months with my mother and sister. I only have a couple credit cards that I’m using to build up my credit. I have read that foreign countries charge fees when you buy something there on a credit card. How do I avoid those fees? – Julian

AnswerDear Julian,
Foreign transaction fees can indeed be a nuisance. A lot of credit cards charge those fees, which usually add 3 percent of the cost to the transaction. In the past few years, the number of cards waiving that fee has risen – particularly those that are elite travel cards that charge substantial annual fees.

Seasoned travelers and those with excellent credit often already have cards in their wallet that waive the fees. But if you’re just starting out with credit and don’t have those premium cards, or if you don’t travel internationally that much and haven’t had the need for a card with no foreign transaction fee, then what do you do?

The good news is that there are now a number of credit cards that have no foreign transaction fees that are aimed at all kinds of customers – not just those with the best credit. By my tally, there are now at least 11 credit cards from major issuers that waive foreign transaction fees and also don’t charge annual fees.

For somebody in your situation, that might be the way to go: Apply for a card with no annual fee that doesn’t charge foreign transaction fees. You might also think about how much you’re going to spend in Mexico. If you’re going to put, for example, $1,000 on a credit card, your foreign transaction fees would total just $30. So, consider if it makes sense to apply for a card and have a credit inquiry on your credit report to save $30.

Here’s a list of cards from major issuers that, as of September 2017, charge no foreign transaction fee, listed by issuer in order of annual fee from least to most. The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of card offers.

American Express

Gold Delta SkyMiles ($95, waived first year)
Starwood Preferred Guest ($95, waived first year)
Premier Rewards Gold ($195, waived first year)
Platinum Delta SkyMiles ($195)
Delta Reserve ($450)
Platinum ($550)

Bank of America

Travel Rewards (no annual fee)
Royal Caribbean (no annual fee)
Celebrity Cruises ($69)
Alaska Airlines ($75)
Amtrak Guest Rewards ($79)
Virgin Atlantic ($90)
Asiana ($99)

Barclaycard

Wyndham Rewards (no annual fee)
Princess Cruises Rewards (no annual fee)
Holland America Rewards (no annual fee)
Carnival World MasterCard (no annual fee)
JetBlue (no annual fee)
Priceline Rewards (no annual fee)
Arrival Plus ($89, waived first year)
Hawaiian Airlines World Elite MasterCard ($89)
Lufthansa Miles & More ($89)
AAdvantage Aviator Red ($95)

Capital One

* No Capital One cards have foreign transaction fees, including:
Quicksilver Rewards (no annual fee)
Venture One Rewards (no annual fee)
Quicksilver One Rewards ($39)
Venture Rewards ($59, waived first year)

Chase 

Amazon Rewards (no annual fee)
IHG Rewards Club Select ($49, waived first year)
Hyatt ($75)
Marriott Rewards Premium ($85)
Chase Sapphire Preferred Card ($95)
United MileagePlus Explorer ($95)
British Airways Visa Signature ($95)
Southwest Rapid Rewards Premier ($99)
Chase Sapphire Reserve ($450)
United MileagePlus Club ($450)
Ritz-Carlton Rewards ($450)

Citi

AAdvantage Platinum Select ($95, waived first year)
ThankYou Premier ($95, waived first year)
AAdvantage Executive ($450)
Prestige ($450)

That’s a long list for you to choose from. Capital One cards might be appealing, because none charge foreign transaction fees, and cards are aimed at all types of customers. If you do decide to apply for a new card, be sure to check out our reviews so you choose a card that works best for your lifestyle.

One side note: When you are traveling, and are asked if you’d like the amount on your card charged in dollars or the foreign currency, always say the foreign currency. You’ll probably get a better exchange rate.

There are plenty of ways to keep those fees low. Safe travels!

See related: Are airline cards worth the annual fee?

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