Best Credit Cards With No Foreign Transaction Fee
However, foreign transaction fees are generally becoming less prevalent on today’s credit cards. Regardless of the type of card you are looking for, you can usually find one that meets your needs and also does not charge foreign transaction fees. These cards can help make foreign travel safer, less expensive and more convenient with their associated card perks and benefits.
The Best Credit Cards With No Foreign Transaction Fee
U.S. News selected the best cards with no foreign transaction fee across a wide variety of credit card types.
- Chase Sapphire Preferred® Card: Best for large travel spending and large sign-up bonus.
- Southwest Rapid Rewards® Premier Credit Card: Best for Southwest Airlines flyers.
- Marriott Rewards® Premier Plus Credit Card: Best for hotel spending.
- Ink Business Preferred℠ Credit Card: Best for business rewards and large sign-up bonus.
- Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®: Best for American Airlines flyers.
- Capital One® Quicksilver® Card – 0% Intro APR for 15 Months: Best for flat-rate cash back rewards with sign-up bonus.
- Journey® Student Rewards from Capital One®: Best for students with cash back rewards.
- Bank of America® Travel Rewards credit card: Best for low travel spending and sign-up bonus with no annual fee.
- Gold Delta SkyMiles® Credit Card from American Express: Best for Delta flyers.
Foreign transaction fees, or FX fees, are costs added onto your statement for purchases made outside the U.S that pass through a foreign bank or are made in a foreign currency. This includes online purchases from a seller in a foreign country that are not made in dollars. The fee is calculated as a percentage of the purchase price, usually between 2 and 3 percent.
When you make a credit card purchase in a foreign country, your credit network converts the foreign currency to dollars using its exchange rate process. It then charges your bank an FX fee based on that dollar amount, typically 1 percent, to offset that conversion cost and to address the added risk of fraud inherent to international transactions. Your bank passes that FX fee on to you and adds its own fee of 1 to 2 percent.
Through a process known as dynamic currency conversion, it is possible to be charged in dollars while traveling abroad, but for a variety of reasons, you should always avoid it.
Dynamic currency conversion
At the point of sale, a foreign merchant may ask if you want to be charged in dollars instead of local currency, so that you have a better idea of what the item you’re purchasing costs. While this dynamic currency conversion may sound like a good idea, it’s best to decline and pay in local currency.
Also, the fee that merchants tack onto your bill for the convenience of paying in dollars can be as high as 7 percent of the purchase price. As Business Insider points out, shopkeepers in busy stores in tourist areas may be unable or unwilling to inform you of the extent of their fee. Additionally, it might not save you from paying a foreign transaction fee, as some credit cards charge an FX fee even for foreign transactions in U.S. dollars, just at a slightly lower rate.
Finally, you’re much more likely to get a better exchange rate by letting your credit card provider do the currency conversion to dollars.
Choosing a Card With No Foreign Transaction Fee
Make sure the card is widely accepted overseas.
You should verify that the card can be used overseas. Visa and Mastercard are the most widely accepted, with the former serving customers in more than 210 countries and the latter serving more than 200 countries. It’s unlikely to find a merchant that won’t accept either card.
Due to higher processing fees, American Express and Discover have much lower acceptance rates worldwide than Visa and Mastercard. They’re fairly well-accepted in the U.S., Canada and Mexico, but less so elsewhere. For example, you can’t use a Discover card in some South American and European countries or most of Africa.
American Express doesn’t publish exactly where you can find merchants who accept its cards, but travel experts routinely caution against taking only an American Express card on an overseas trip. Still, American Express is improving its global reach and has joined Visa and Mastercard in partnering with Apple to allow customers to pay for purchases abroad through Apple Pay with any merchant equipped to handle NFC transactions, or mobile payments.
Make sure the card has an EMV chip for maximum usability.
Europay, Mastercard and Visa, or EMV for short, is a security technology that has only recently gained significant acceptance in the United States but has been widely used around the world for years. While the standard in Europe, Asia, Latin America, Australia and elsewhere are chip-and-PIN EMV cards, the U.S. has predominantly adopted chip-and-signature EMV technology.
Nevertheless, chip-and-signature cards should work in virtually all situations and should definitely be the cards you depend on overseas. Unchipped, magnetic-stripe cards should work; in fact, merchants who accept Visa and Mastercard are required to accept magnetic-stripe cards. But some merchants can be wary of them and may refuse to accept them, mistakenly thinking they will be held liable for fraudulent transactions on an unchipped card, even though that liability lies with your bank. Unattended service kiosks like those at train stations are also known to present problems for chipless cards, requiring travelers to seek out an attendant and potentially wait in long lines.
Look for useful travel benefits.
Many cards with no foreign transaction fees stand out as great travel cards thanks to their extensive travel benefits. World Elite Mastercards and Signature Visa cards in particular offer perks like:
- Trip cancellation/interruption insurance
- Trip delay reimbursement
- 24/7 concierge services
- Lost luggage reimbursement
- Car rental theft and collision coverage
- Baggage delay insurance
- Roadside assistance
- 24/7 customer service
While these benefits are helpful for any trip, cards from both networks can prove extremely useful when traveling in a foreign country. For example, 24/7 concierge services can help you plan your international journey all the way down to details like dinner reservations. They also provide lots of emergency services, which are detailed below.
Advice for Traveling Abroad With Your Credit Card
Access to Cash
- Contact your bank. Let them know you’re going to be traveling so that they don’t freeze your account as a fraud prevention measure. Ask for your credit card PIN, just to have in case you need it because of issues with the EMV technology.
- Find out about partner banks and ATMs. Because you can get hit with costly ATM fees at ATM machines not branded by your bank, you need to know if there are any branches near your destination and if your bank has partnerships with any banks in the area. For example, Bank of America allows customers to avoid fees when using the ATMs of Barclays in the United Kingdom and Deutsche Bank in Germany and Spain.
- Carry a debit card. Debit cards are much more advisable for ATM withdrawals abroad than credit cards. Using a credit card to withdraw some local currency could subject you to an out-of-network ATM fee and a processing fee from the ATM operator. Plus, credit card ATM withdrawals are treated like cash advances, which often carry exorbitant rates of interest with no grace period, which means interest begins accumulating immediately.
- Get educated about the exchange rate. Credit card networks typically provide exchange rates that are very close to the fair market rate, but you should have a frame of reference before you travel. You can install an app like XE Currency App on the iPhone for on-the-spot conversion.
Using Your Card
- Remember to avoid dynamic currency conversion. You risk paying a much higher conversion rate on top of additional fees.
- Make sure your card has an EMV chip. If not, inquire about switching to a chipped card at least two weeks before your trip date to allow your bank time to mail you a new card.
- Bring photocopies of your cards. Having a photocopy of the front and back of your credit card(s) gives you easy access to the customer service number to call and cancel it. Black out details like the cardholder name, expiration date and CVV number.
- Carry a backup card. If you don’t have a debit card, or if your primary card is from Discover or American Express, carry an additional Visa or Mastercard.
- Research your card’s travel benefits. Depending on your card, you might be entitled to benefits that can help you deal with travel mishaps like lost luggage, trip delays, broken-down rental cars and more. Certain travel cards can also get you perks like discounted or free entry to airport lounges, priority boarding, free checked bags and free in-flight WiFi.
In Case of Emergency
- Know what your card issuer can do if something goes wrong. If your credit card is lost or stolen, both Visa Signature and World Elite Mastercard provide 24/7 global services for help and expedited card replacement. Visa also offers an emergency cash advance or Western Union wire transfer that can be made within two hours of approval by your bank.
- Visa also provides a 24/7 benefits administrator who can provide medical referrals, contact loved ones on your behalf and arrange for payments in emergency situations. It also provides translation services, legal referral assistance, prescription assistance and other emergency services.
- Consider travel insurance. Your personal insurance may cover your care at a number of hospitals around the world, but if not, travel insurance can help you with out-of-pocket medical costs, or a delayed or cancelled trip.
- Your card issuer may offer travel insurance for a fee, above and beyond the card’s included protections. World Elite Mastercard offers users up to $1 million of coverage for both international travel accident and medical expenses, as well as protections for trip inconvenience protection and lost luggage.
- Common Carrier Travel Accident Insurance provided by Visa Signature offers cardholders and their immediate family members up to $500,000 for accidents involving the airline, train or cruise ship. And its 24-Hour Travel Accident Insurance provides coverage for injury, dismemberment or loss of life up to $100,000.
- Even if you forego travel insurance, your personal car insurance policy probably won’t cover foreign travel, so you’ll need to purchase auto insurance in your destination country if you plan to rent a car. You’ll also need an International Driving Permit to legally drive in certain countries, which you can purchase from AAA or the American Automobile Touring Alliance for a $20 fee with a valid driver’s license, two passport pictures and a completed application.
- Visa Signature and World Elite Mastercard both offer auto rental collision damage waivers that provide reimbursement over and above any primary insurance you have for theft or damage to the car up to its full cash value. You have to refuse the collision damage waiver at the car rental counter to take advantage of this benefit. Be sure to take photos and keep copies of the accident report, rental agreement and receipt, repair estimate and police report in case you need to file a claim.
- Consult the State Department. Travel.state.gov offers travelers a wealth of information, from travel alerts and warnings to best practices to embassy contact information. In an emergency, officials at the local U.S. embassy can help you deal with medical emergencies, arrest and detention, natural disasters and more.
Editorial opinions are those of U.S. News and have not been previously reviewed, approved or endorsed by any other entities, such as banks, credit card issuers or travel companies.
