How to Compare Credit Card Offers with No Foreign Transaction Fee
Updated: October 11, 2018
You just got back from a pricey international trip and while reviewing your credit card statement, you noticed the expected airfare, lodging and food charges, but also “foreign transaction fee” charges. What’s that all about?
Traveling is expensive enough. Save money with a credit card that has no foreign transaction fee. Whether you’re sampling local cuisine or shopping online abroad, these cards give you one less thing to worry about. And for even more travel perks, check out our list of travel cards from our partners.
Many credit cards charge a foreign transaction fee, but there are some that don’t. If you are a frequent traveler or shop online with overseas vendors, it might be worth your while to find a card without a foreign transaction fee. To get to our top picks, we evaluated over 50 credit cards without a foreign transaction fee using the following criteria: other rates and fees, general rewards rates, sign-up bonuses, point values, redemption options, customer service and other miscellaneous travel benefits. Here are our results, along with helpful tips to help you make a decision on the right card.
We not only explain what you need to know about foreign transaction fees, but also how to plan for your overseas travel financial strategy, and pick the right card to accompany your travels. Take a look below:
Our top picks for 2018: Best no foreign transaction fee credit cards
|Card Name||Best For:||Foreign Transaction Fee||Issuer's Regular Foreign Fee||Annual Fee|
|Capital One® VentureOne® Rewards Credit Card||Easy travel redemption||0%||None||$0|
|Bank of America® Travel Rewards credit card||Online bonus||0%||3%||$0|
|Capital One® Quicksilver® Card||Flat-rate cash back||0%||None||$0|
|Chase Sapphire Preferred® Card||Flexible travel rewards||0%||3%||$0 intro for first year, then $95|
|HSBC Cash Rewards Mastercard® credit card||Easy sign-up bonus||0%||3%||$0|
|Wells Fargo Propel American Express® Card||No annual fee||0%||3%||$0|
|Capital One® Venture® Rewards Credit Card||Hotel purchases||0%||None||$0 intro for first year, then $95|
|Discover it® Cash Back||Rotating bonus categories||0%||None||$0|
|Capital One® Savor® Cash Rewards Credit Card||Dining and entertainment||0%||None||$0 intro for first year, then $95|
|Discover it® Miles||First year miles match||0%||None||$0|
Our Research Methodology
No foreign transaction fee credit cards analyzed: 938
Criteria used: Rates and fees, rewards rates, rewards categories, sign-up bonuses, point values, redemption options, redemption flexibility, credit needed, travel benefits, transfer partners, international customer service, security, ease of application
Editor's notes on our top no foreign transaction fee cards
Capital One® VentureOne® Rewards Credit Card
With its hotels.com offer, this card pulls ahead of the pack, even with its lukewarm 1.25X miles on all purchases. There's a 20,000-mile sign-up bonus after $1,000 in the first 3 months of card membership, as well.
Miles don't expire for the life of the account and there's no limit to how much you can earn. You also get Visa Signature benefits, such as extended warranty and complimentary concierge service.
Bank of America® Travel Rewards credit card
The Bank of America Travel Rewards' 1.5X points on all purchases has the VentureOne Rewards beat, although the sign-up bonus of 25,000 points after a $1,000 spend within the first 90 days is comparable.
There's no expiration on points and you can earn up to 75% bonus as a Preferred Rewards customer. If you like the idea of redemptions on a multitude of travel purchases, no loyalty necessary, this is a good option.
Capital One® Quicksilver® Card
This card from Capital One is competing head-on with cards like the Chase Freedom Unlimited®; it gets 1.5% back on all purchases and has a sign-up bonus of $150 for spending $500 in the first 3 months.
What makes the Quicksilver pull ahead is that it has no foreign transaction fee, while the Freedom Unlimited has a 3% foreign transaction charge.
Chase Sapphire Preferred® Card
The Sapphire Preferred's 2X points on worldwide travel and restaurants not only includes hotels and airfare, but also taxis and trains. There's also the 50,000 points after a $4,000 spend in the first 3 months of card membership.
Because of the Sapphire Preferred's unique position as a Chase Ultimate Rewards card, you can earn a 25% bonus when redeeming points for travel on the Ultimate Rewards portal. You can also transfer rewards from Chase Freedom and Freedom Unlimited cards and still enjoy that boost. A little-known benefit of the Sapphire Preferred – you can get primary rental car waiver damage, which means this insurance is used even before your personal auto insurance.
HSBC Cash Rewards Mastercard® credit card
This card has the usual 1.5% back on all purchases and $150 bonus after a $500 spend in the first 3 months of card membership. What makes this card stand out from the others is the 10% anniversary bonus on all cash rewards each year.
Also, this cash rewards card separates itself with the no foreign transaction fee feature, which some cash back cards don't offer, as well as numerous travel and shopping benefits, including travel accident insurance and price protection refunds.
Wells Fargo Propel American Express® Card
This card is a great option to take abroad. Not only does it come with no foreign transaction fee, its 3x points per dollar spent on travel (and dining) is a surefire way to rack up rewards on your business trip or vacation.
If you know you'll be making a major international trip soon, you'll want to take advantage of its 30K point sign-up bonus for spending $3,000 in the first 3 months. By selecting this card over competing options, you could also save a great deal long-term as the Propel offers all of these benefits with no annual fee.
Capital One® Venture® Rewards Credit Card
The Venture Rewards' greatest asset is now the 10X miles on hotels booked and paid through hotels.com/Venture. Also new to the card is the $100 credit for Global Entry or Pre-Check.
This card has a sign-up bonus of 50,000 miles after a $3,000 spend in the first 3 months of card membership, as well as 2X miles on all purchases. But it's this card's hotel rewards feature that puts it in its very own class.
Discover it® Cash Back
With Discover's famous cashback match, this card's rewards are tough to beat. You can earn up to $300 for the year if you use the 5% rotating categories to the maximum of $1,500 a quarter (activation required), then another $300 back the end of your first year.
Keep in mind that Discover cards are accepted at fewer international locations than a credit card in the Visa or Mastercard network. If you have upcoming trips to a specific destination in mind, it's a good idea to do some research on how commonly accepted Discover is in that region.
Capital One® Savor® Cash Rewards Credit Card
With its other features so prominent, you could almost miss the fact that the Savor comes with no foreign transaction fee. Indeed, the Savor is a great choice for travel abroad; its 4% cash back on dining and entertainment can really shine if you take it with you on vacation.
It's also great as a daily driver in addition to international trips. While there are some better cards for shopping, 2% back at grocery stores is nothing to scoff at. But perhaps best of all, it comes with a big $500 cash sign-up bonus which you can reach by spending $3,000 in the first 3 months.
Discover it® Miles
The Discover it Miles card is a neat option if you are looking for a straightforward card that earns miles at one consistent rate. It earns an unlimited 1.5X miles per dollar on every purchase, which can then be redeemed as a statement credit towards travel purchases—with no blackout dates.
As an added bonus, Discover automatically matches all the miles you've earned at the end of your first year; this can be quite lucrative if you make a large sum of purchases during that time. In addition to having no foreign transaction fee, it also has no annual fee.
What is a foreign transaction fee?
Foreign transaction fees are charges – usually around 3 percent of the total amount – that many credit card issuers and payment networks place on purchases made in a foreign currency or on purchases that involve a foreign bank.
Usually, foreign transaction fees are a percentage of the amount of each foreign currency purchase, with no minimum or maximum. The card issuing bank may choose to pass that fee along to consumers; most do, and some tack on their own fees.
Banks can add foreign transaction fees onto any credit card charge that’s processed outside of the United States. These aren’t foreign exchange fees, so you can find these charges on your credit card statement even when you make overseas purchases in US dollars. In fact, you don’t even have to leave the country to get hit with foreign transaction fees; if you so much as place an online order from a foreign company, including something as innocuous as booking an airline ticket from a carrier that doesn’t have a US-based website — you could find yourself with an additional 3 percent fee rolled into the total cost of your transaction.
The bottom line is that, like baggage and passports, foreign transaction fees have been a standard part of international travel for years. Banks can get away with these fees… so they do, both ways: Our international counterparts are also being charged these fees on their foreign credit cards whenever they make purchases from US companies and on American soil.
Fortunately, the average consumer has gotten more and more savvy to these hidden costs, and credit card companies are dropping their fees in response.
If you’d like to avoid paying these unnecessary fees on any potential foreign transactions you make (including buying a postcard stamp in Canada) – you’ll want to consider a no foreign transaction fee card similar to the ones we introduce below. Here are the ins and outs of this fee, and advice on avoiding extra charges when traveling abroad.
How much is the typical foreign transaction fee?
Most foreign transaction fees vary between 2 percent and 3 percent of the purchase. Often, the fee has two parts: one charged by the payment network, such as Visa and Mastercard, and one charged by the card issuer, which can be anything from a bank like Chase, or a brand like Hilton.
Networks Visa and Mastercard typically charge a 1 percent fee for each foreign transaction. Issuers might tack on an additional 1 to 2 percent. American Express, which doesn’t use Visa or Mastercard’s payment system, often tacks on a foreign transaction fee of 2.7 percent onto its cards.
Again, a foreign transaction can be a purchase processed through a foreign bank (such as when you buy something from a non-U.S. retailer website), or when you travel overseas, including when you use an ATM. Note that there can actually be multiple fees at a foreign ATM, including a flat-rate international ATM surcharge as well as an ATM access fee.
Foreign transaction fees by card issuer
Below are the standard foreign transaction fees for top issuers. Some issuers, like Capital One and Discover, elect not to charge a foreign transaction fee on any of their credit cards. Of course, even different cards from the same brand can vary in their fees. Many issuers have cards that are exceptions to their standard foreign transaction fee.
|Card Issuer||Foreign Transaction Fee|
|Bank of America||3%|
|U.S. Bank||3%; 2% for U.S. dollar transactions|
Foreign transaction fees demystified: comments from our credit card experts
Credit card holders are typically charged foreign transaction fees when they purchase items while overseas or when they make purchases that use an overseas bank to process the transaction.
Why? “Because banks have to convert your money spent into U.S. dollars so they can charge your account,” said Victoria L. Fillet, a financial adviser with Blueprint Financial Planning in Hoboken, New Jersey. That conversion costs money, and some card-issuing banks pass that cost along to consumers in the form of foreign transaction fees.
According to Nessa Feddis, vice president and senior counsel for the American Bankers Association, foreign transaction fees also help banks offset the greater fraud risks associated with international transactions. "There are risks and costs associated with any money conversion,” she said.
This trend of disappearing foreign transaction fees is expected to continue, according to industry experts, which is good news for consumers.
“It’s called ‘competition,’” ABA’s Feddis said. “Cards without foreign transaction fees are widely available in a highly competitive market as banks fight to attract and keep customers. For people who don’t travel abroad it may not be important, but there are many for whom it might be very important. So you will see banks respond. It’s the customers who drive the credit card features and terms.”
Tips for spending internationally (before, during and after travel)
- Diversify. “My biggest tip for spending overseas is to diversify; always carry both cash and credit,” says Lyn Alden, world traveler and founder of Lyn Alden Investment Strategy. “Credit cards are safer, more convenient and give better rewards, so I use them as my primary spending method. But when you're outside of your country, it's critical to have backups, and to have alternate ways to spend.” Some travel experts recommend that you carry 2 cards with different issuers and different networks.
- Know your card terms. If you can't readily find information about foreign transaction fees, pick up the phone and call the number on the back of your card. It should also be displayed with your “rates and fees” clause. Note that terms of cards from the same issuer can vary. If you travel often, it may make sense to apply for a credit card that does not charge foreign transaction fees.
- Research your overseas bank network. Check if your bank is part of a global ATM network that you can use to access cash overseas for free – or at least at a lower cost.
- Always pay in the local currency. Sometimes, foreign merchants will offer to convert your purchase to U.S. dollars before you pay with your card. Decline so that you avoid dynamic currency conversion costs that you’ll have to shoulder. “So many places try to say ‘convenience,’ but the rate is not favorable to the traveler,” says travel blogger Suzanne Wolko of PhilaTravelGirl.com.
- About those traveler's checks. “Don’t bother; they are too much of a hassle,” says Wolko.
- Call your bank. Make sure they are aware that you may use your ATM card in the country you will be traveling to, says Wolko.
- Use only credit abroad. Some travel experts actually advise that you not use a debit card in a foreign country. That’s because you are protected when there is an unauthorized charge on your credit card, and you might be protected if a product isn’t delivered as promised. A debit card, with your PIN, can mean free money for the bad guys, if your bank doesn’t have protections in place for you. Check with your financial institution.
- Try local apps. Wolko advises that you use apps tied to your credit card to avoid dealing with cash or credit cards, such as Uber, Lyft or MyTaxi.
How to choose the right credit card with no foreign transaction fee
- Does the card fit your lifestyle? OneSavvyDollar.com founder Ogechi Igbokwe says he knew that once he graduated from grad school, he planned to travel overseas, so a card with no foreign transaction fee made sense.
- Does it come with an annual fee? Says Igbokwe: “Golden rule when making a purchase: The cost of getting a thing must never outweigh the benefit.” So, make sure you will recoup on the annual fee or that the card has an advantage that makes the fee worthwhile.
- Is it widely accepted? “A no foreign transaction fee card is only good if it is accepted everywhere you go,” says Natasha Rachel Smith of TopCashback.com. For example, she says, while 2 of the major card networks are less common outside of the U.S., Visa and Mastercard are more popular overseas.
- Any rewards? Because there is such a wide range of cards offering no foreign transaction fee, you’ll want to look at rewards that are offered. However, “Prior to applying for any card, check the terms and conditions to make sure the card allows you to receive rewards on international purchases,” says Smith.
- What other features are there? Krista Canfield McNish, of travel website and blog FoodWaterShoes.com, has a card that covers up to $1,500 in trip cancellation/trip interruption insurance per trip for nonrefundable expenses due to personal or family injury, illness, or death if you booked your trip with your card, which she says is a handy bonus. “I also love that the card doesn’t require me to call [the issuer] or to log in online to notify them of upcoming travel before I take off,” McNish says.
- Chip and PIN or chip and signature? Most U.S.-based cards are chip and signature (for now), while in other parts of the world, such as Europe, they use chip and PIN. Both are designed for increased safety. (If your card is exclusively magnetic stripe, (the old, common system) that could be an issue for overseas travel – best to apply for a card that carries the chip technology, called EMV.) For the most part, chip and signature will work fine overseas, provided there is a cashier, but if this is an issue for you, check with your bank to see if your card uses a PIN.
- Have you done your research? “Keep in mind that not every country is U.S. credit card-friendly (for example, European cards are more likely to work in countries like Cuba than U.S. credit cards), so it's a good idea to do your homework before you take off,” says McNish.
More information on specific travel rewards categories
Once you narrow your choice down to a few products, you can find product-specific reviews for travel cards, hotel cards and airline cards. Use these reviews to help make your final application decisions!
Robin Ratcliff is the managing editor for reviews on CreditCards.com. Before CreditCards.com, she worked as a analyst and editor, and still brings that same analytical rigor to her card recommendations today. You can reach Robin at firstname.lastname@example.org.
Tracy Brackman is a credit card news editor at CreditCards.com, writing breaking news stories on card updates and new card launches. You can reach Tracy at email@example.com.
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