Heading abroad for vacation or a business trip? You’ll want to consider how you plan to pay for purchases in foreign countries. So, a No Foreign Transaction Fee Credit Card is crucial to spending less.
Many credit cards charge foreign transaction fees – usually around 3% – on any charges processed outside the United States. However, several cards waive this pesky fee, allowing you to avoid unnecessary charges when travelling internationally or shopping online at foreign merchants.
What Are Foreign Transaction Fees?
Foreign transaction fees, or currency conversion fees, are charges added onto credit card purchases made in a foreign currency. The fee is typically 2-3% of the total transaction amount. So if you make a $100 purchase in euros, and your card has a 3% foreign transaction fee, you’ll pay an extra $3 on top of the charge.
Some issuers also charge a flat fee per transaction instead of a percentage. This fee usually ranges from $0.50-$1.00.
These fees are how credit card issuers and networks (Visa, Mastercard, etc.) cover the costs of currency conversion. When you make a transaction in a foreign currency, the purchase amount needs to be converted into U.S. dollars before it can be processed and billed to your account. Issuers recoup the costs of this conversion via foreign transaction fees.
Why You Should Get a No Foreign Transaction Fee Credit Card
Foreign transaction fees can really add up if you travel frequently or make regular international purchases. Here are some reasons to consider getting a credit card that doesn’t charge these pesky fees:
- To avoid unnecessary costs
The most obvious benefit is avoiding the extra 2-3% on every foreign transaction. This saves you money, especially on expensive purchases like lodging, cruises, and fine dining. For frequent travelers, these savings add up quickly.
- Get better exchange rates
Some no foreign transaction fee cards offer more favorable exchange rates compared to the wholesale rates used by issuers that do charge these fees. This means you may essentially pay less for foreign currency conversions.
- Great for international shopping
If you regularly shop at foreign or international websites, a card with no foreign fees can save you money. Many Canadian and European websites charge in their local currency, so U.S. cards with no foreign fees are ideal.
4.You often get great travel perks
The best no foreign fee cards also tend to offer great travel perks like trip insurance, lost luggage reimbursement, airport lounge access, and bonus points/miles on travel purchases. If you travel a lot, look for a card that combines fee-free foreign transactions with useful travel benefits.
Our Top Picks for No Foreign Transaction Fee Credit Card
Here are some of the best credit cards that don’t charge annoying foreign transaction fees:
Capital One Venture Rewards Credit Card
With a $95 annual fee that’s waived the first year, the Capital One Venture card offers 2x miles on all purchases.
You can redeem earned miles towards any travel purchase, essentially making this a 2% cash back card for travelers. It has no foreign transaction fees and a current sign-up bonus of 75,000 bonus miles (worth $750 in travel) after spending $4,000 on purchases in the first 3 months.
Chase Sapphire Preferred Card
The Chase Sapphire Preferred is one of the most popular travel rewards cards with a $95 annual fee and a huge sign-up bonus. New cardholders can earn 80,000 bonus points after spending $4,000 on purchases in the first 3 months – worth $1,000 towards travel booked through Chase.
The card earns 5x points on travel purchased through Chase, 3x points on dining and streaming, and 1x points on everything else. Points can be transferred 1:1 to airline and hotel partners or redeemed for 25% more value towards travel through Chase. There are no foreign transaction fees.
Bank of America Travel Rewards Credit Card
This is a no annual fee card that offers an easy-to-redeem 1.5x points on all purchases with no foreign transaction fees. Each point is worth 1 cent towards travel, so it’s effectively a 1.5% cash back card for travel purchases.
New cardholders can earn an introductory 25,000 point bonus worth $250 in travel after spending $1,000 on purchases in the first 90 days. Points can be redeemed towards travel purchases made through Bank of America’s travel portal.
Citi Premier Card
At a $95 annual fee, the Citi Premier offers excellent earnings for travelers along with no foreign transaction fees – 3x points at hotels, gas stations, restaurants, supermarkets, and on air travel and 1x points on everything else.
New applicants can earn 60,000 bonus Thank-You points after spending $4,000 in the first 3 months. Points are worth 1 cent each towards travel redemptions or can be transferred to airline partners.
Wells Fargo Propel American Express Card
The Propel card from Wells Fargo is a no annual fee card that offers 3x points on eating out, ordering in, travel, transit, gas stations, streaming services, and phone plans. All other purchases earn 1x points.
Points are worth 1 cent each towards cash back or travel redemptions. New applicants can earn 20,000 bonus points, worth $200 in redemption value, after spending $1,000 on purchases within the first 3 months. There are also valuable travel protections and no foreign transaction fees.
What to Look for in a No Foreign Transaction Fee Card
Here are some key factors to consider when comparing credit cards without foreign transaction fees:
- Network acceptance
Visa and Mastercard have the best global acceptance rates. American Express and Discover are less commonly accepted outside the U.S.
- Annual fee
Make sure any fees are worthwhile based on the perks and rewards you’ll realistically use. Travel rewards cards sometimes charge higher annual fees but may offer credits and bonuses that offset the cost.
- Interest rate
This is less important if you pay balances off monthly but still worth comparing, since purchase interest rates vary quite a bit. Some travel cards have high interest rates.
- Rewards value
Look for cards that offer valuable rewards for your spending habits, like cash back, travel points/miles, or transferable points.
- Travel perks
Travel medical insurance, lost luggage coverage, rental car insurance, airport lounge access and credits can save you money when traveling abroad.
- Security features
Look for zero liability fraud protection, EMV chip cards, contactless payment capabilities, and enhanced verification security like biometric logins. These help protect your information when traveling internationally.
By considering these factors, you can find the best no foreign transaction fee card that suits your spending habits, travel needs, and budget.
Conclusion on No Foreign Transaction Fee Credit Card
The right credit card with no foreign transaction fees makes it cheaper and easier to travel abroad. Plus, you can earn valuable rewards points and miles along the way.
Consider getting a new card several months before an upcoming international trip to give yourself time to earn the sign-up and welcome bonuses.
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