May 2, 2018 - 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 are the best cards that give you one less thing to worry about. And for even more travel perks, check out our list of travel cards from our partners.
See the best no foreign transaction fee credit card offers from our partners below.
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Updated: May 2, 2018
You just got back from a pricey trip abroad 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:
We not only explain what you need to know about foreign transaction fees, but also overseas travel and picking the right card. Take a look here.
|Card||Best For:||Annual Fee||Welcome Bonus||Bonus Spend Requirement|
|Capital One® Venture® Rewards Credit Card||Best for hotel purchases||$0 intro for first year, then $95||50,000 Miles||$3,000 / 3 months|
|Chase Sapphire Preferred® Card||Best for flexible travel rewards||$0 intro for first year, then $95||50,000 Bonus Points||$4,000 / 3 months|
|Capital One® VentureOne® Rewards Credit Card||Best for no annual fee||None||20,000 Miles||$1,000 / 3 months|
|Bank of America® Travel Rewards Credit Card||Best for online bonus||None||20,000 Bonus Points||$1,000 / 90 days|
|HSBC Cash Rewards Mastercard® credit card||Best for anniversary bonus||None||$150||$500 / 3 months|
|Capital One® Quicksilver® Cash Rewards Credit Card||Best for flat-rate cash back||None||$150 Cash Bonus||$500 / 3 months|
|Discover it® Cashback Match™||Best for rotating bonus categories||None||Discover will match all the cash back earned at the end of your first year, automatically||Automatic|
|Capital One® Savor® Cash Rewards Credit Card||Best for foodies||None||$150 Cash Bonus||$500 / 3 months|
|Chase Sapphire Reserve® Card||Best for airport lounge access||$450||50,000 Bonus Points||$4,000 / 3 months|
|Discover it® Miles||Best for flat-rate bonus miles||None||Match Mile For Mile: We'll match all the Miles you've earned at the end of your first year||Automatic|
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
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.
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.”
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.
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!
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