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The Best No Foreign Transaction Fee Credit Cards for Travelers

BY 
Christine Krzyszton
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  1. Credit Cards  / 
  2. Strategies & Guides

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If you travel internationally frequently, you’re probably familiar with foreign transaction fees, those pesky fees charged by your credit card company on every purchase you make outside of the United States.

The fees can also be charged on transactions made with foreign banks, even if you’re making the purchase from the United States. For example, if you purchase an airline ticket from a foreign company, you may be charged a foreign transaction fee.

Foreign transaction fees are widely unpopular, especially with travelers frequently paying their foreign expenses with credit cards. As a result, the list of credit cards not charging these fees is growing as issuers introduce new products without the fees and remove the fees from some existing cards.

The Best Personal and Business Cards (ALL With $0 Foreign Transaction Fees)

Selecting a credit card that doesn’t charge foreign transaction fees is a real benefit for the traveler, but there are so many credit cards without these fees — the savvy traveler will want to choose a card that delivers more.

Let’s start by taking a look at our picks for the top credit cards for international travel that have no foreign transaction fees, and then continue with our guide to everything you need to know about transaction fees when you’re traveling.

American Express Credit Cards

Bottom Line: The American Express collection of no foreign transaction fee credit cards offers strong benefits for the frequent traveler and card options equally suited to those with loyalty to a specific brand. A combination of cards could offer the perfect umbrella of benefits for the frequent traveler.

Chase Credit Cards (Best Rewards)

Bottom Line: The Chase Sapphire Preferred® Card and The Chase Sapphire Reserve earn valuable Chase Ultimate Rewards Points that can be redeemed for travel at an increased value through the Chase Ultimate Rewards travel portal, or transferred to hotel and airline partners. 

Barclays Credit Cards

Bottom Line: The Barclays Arrival® Premier World Elite MasterCard® is a solid card to have in your wallet for everyday purchases or travel expenses, as it earns 2 miles for every dollar spent on the card.  

Business Credit Cards

Bottom Line: Select a no foreign transaction fee business credit card based on the spending profile of your business to maximize earning rewards. You’ll also want to make sure the spending levels of your business offset any annual fees, and that your travel is frequent enough to maximize the travel benefits offered with each specific card. 

Please note that the list of additional benefits we’ve provided is an abbreviated summary for general comparison purposes only.

All of the cards reviewed earn 1 point/mile per dollar spent on every purchase, so we’ve only included earnings in the additional benefits section that exceed this level.

A complete list of benefits and current card offers is provided when accessing each credit card summary page individually. Additional terms and conditions apply.

No Foreign Transaction Fee Credit Cards With No Annual Fee

No foreign transaction fee credit cards that offer the highest level of benefits and rewards typically charge an annual fee. However, there are plenty of no foreign transaction fee credit cards that do not charge an annual fee; here is a sampling of those cards.

Bottom Line: You don’t have to pay an annual fee to secure a credit card with no foreign transaction fees!

What You Should Know About Foreign Transaction Fees

What is a foreign transaction fee?

A foreign transaction fee is a fee assessed by your credit card issuer on any transaction that is processed through a foreign bank. A common foreign transaction fee is around 3% of the total foreign purchase, and there is no limit as to how much can be charged.

The fee is perfectly legal, but more and more credit card companies are now eliminating it, since informed travelers choose credit cards that do not charge foreign transaction fees.

How to find out if a credit card charges a foreign transaction fee

In some cases, the promotional summary for a credit card does not disclose whether there is a foreign transaction fee charged on the card. To find out for certain that no fee is charged, you’ll want to dig deeper.

Fortunately, all of the financial information you’ll need can be found in what is known as a Schumer Box. It is named after Charles Schumer,  the congressman responsible for the legislation that requires credit card companies to clearly disclose costs and terms associated with each card.

All credit card companies must use a standard format for the Schumer Box, so comparing cards became much easier after this legislation was passed in 1988.

For a credit card you’re considering, you can review the Schumer Box online for that specific card by clicking on a link titled:

  • Rates & Fees
  • Terms & Conditions
  • Pricing & Rates
  • Interest Rates & Fee Summary
  • …or a link with a similar name

Here’s what you’ll see in the Schumer Box if the credit card you’re researching does not charge a foreign transaction fee:

Here’s an example of a section of the Schumer Box for a credit card that does charge a foreign transaction fee:

Determining if your existing credit card charges a foreign transaction fee:

  • Call your credit card company – Contact your credit card company and ask whether your card charges a foreign transaction fee by calling the phone number printed on the back of your credit card.
  • Review your paper cardholder agreement – When you received your new credit card in the mail, a cardholder agreement was included. In the cardholder agreement, there is a chart similar to the ones illustrated above that lists all the fees assessed on your card.
  • Access your account online – Sign in to your online credit card account to access your cardholder agreement, which will include a breakdown of all fees/charges.

Bottom Line: While a 3% foreign transaction fee might not seem like much, it can add up quickly, whether you’re a frequent traveler or just take 1 big trip a year. In any case, by selecting a credit card without the fees, you won’t come home to a billing statement full of additional foreign transaction charges on your purchases!

Everything Else You Need to Know

Once you’ve selected a credit card that charges no foreign transaction fees, you’ll want to make sure you minimize the plethora of other fees you might incur when securing foreign currency abroad (or simply paying for your foreign purchase with a credit card).

You may be surprised to learn that you can be hit with several fees as a result of 1 simple foreign transaction!

Cash Advances Abroad

While using your no foreign transaction fee credit card for purchases when traveling is a smart move, using that same credit card to secure a cash advance when you’re traveling can trigger additional fees and interest charges.

Using your no foreign transaction fee credit card for cash advances can still trigger fees.
You’ll also incur interest rate charges on cash advances from your no foreign transaction fee card.

In an emergency, it’s good to know that a cash advance is an option…but it’s also important to know what it can potentially cost you, even on a card that doesn’t charge a foreign transaction fee.

Currency Conversion Fees

The term “currency conversion fees” is frequently used interchangeably with “foreign transaction fees,” but there is a difference.

Converting foreign currency costs money. When your bank is charged by the processing network (such as Visa or MasterCard) for converting your purchase made in foreign currency to U.S. dollars, it passes the expense on to you.

In some cases, the foreign transaction fee your bank charges you will include the currency conversion fee they have been charged (usually around 1%). The bank can also tack on additional fees, bringing the total to around 3%.

Bottom Line: Foreign transaction fees are just one of the charges you need to be aware of when paying for foreign purchases with your credit card and securing foreign currency while traveling. Referencing your credit card’s Schumer Box before traveling can help you avoid some of these fees. 

Dynamic Currency Conversion

When you check out of your hotel or are presented with your dining bill in a foreign country, it might seem convenient that the total amount is already converted from the foreign currency to U.S. dollars. There’s no need to do any calculations to determine how much you’ll be paying — it’s been done for you!

This practice of presenting the bill in your home credit card’s currency (in this case U.S. dollars) is known as “dynamic currency conversion.” While it might seem convenient and harmless, the end results are not in your favor.

For example, let’s say you receive your foreign restaurant tab and there are 2 options for paying: you can select $106 U.S. or 86€ (Euro). You might do a quick calculation, think the totals make sense from a conversion perspective, and just pay the bill in U.S. dollars.

Unfortunately, if you had paid the 86€, your U.S. bank would process the currency exchange based on the current rate — which in this case is closer to $96 (versus the higher $106 option on your bill).

Paying in U.S. dollars abroad adds a layer of cost to the transaction: U.S. dollars have to be converted to the local currency to pay the merchant, then back to U.S. dollars to bill you on your credit card.

When using a credit card, always pay your bill in the local currency of the country you’re in to ensure you get the best currency conversion rate.

Bottom Line: Never pay in U.S. dollars when using your credit card in a foreign country! If your bill is presented in U.S. dollars, ask that it be voided and changed to reflect the amount in local currency. If both options are available on the receipt, be sure that U.S. dollars is not already checked as an option before you sign the receipt. 

Foreign ATM Fees

You may think you could avoid foreign transaction fees by using your debit card to withdraw money from foreign ATMs when traveling abroad. This is a logical assumption, plus ATMs are usually conveniently located and facilitate an easy transaction. But foreign ATMs can charge exorbitant fees!

Even if the foreign ATM fee is reasonable, your bank may add on foreign transaction fees, currency conversion fees, an out-of-network ATM fee, or other transaction fees.

Some banks (such as Charles Schwab Bank and CapitalOne 360) reimburse these fees, and other banks allow a limited number of fee-free transactions per statement period.

You can incur bank charges in addition to credit card foreign transaction fees.

Bottom Line: To minimize bank charges when abroad, review the fee disclosures associated with your debit card before you travel, and try to limit your withdrawals to 1 per trip. You can also open an account that reimburses ATM fees or allows a limited number of fee-free withdrawals per month.

Final Thoughts

With the vast selection of credit cards that do not charge foreign transaction fees, it should be easy to find an appropriate card for your travel expenses that avoids these fees.

Remember to look at the Schumer Box for any credit card you’re considering, and learn about the fees charged on your current credit card before you travel.

With just a small amount of research, you can minimize the fees that make international travel more expensive and avoid returning home to a credit card statement full of unexpected charges.

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The Best No Foreign Transaction Fee Credit Cards For Travelers (A Head to Head Review)

FAQ

How do foreign transaction fees work?

A foreign transaction fee is a fee charged by your credit card issuer on every purchase you make that is processed through a foreign bank.

You can even be charged a foreign transaction fee if you’re in the United States and make a purchase with a foreign merchant in foreign currency. The fee is calculated as a percent of your total purchase, usually around 3%.

How can I avoid foreign transaction fees?

You can avoid foreign transaction fees by always using a card for your foreign purchases that does not charge this fee.

Which credit cards have no foreign transaction fees?

The majority of credit cards today charge no foreign transaction fees, and we’ve put together a collection of the best credit cards for frequent travelers in this post.

There are certain credit card issuers (such as Discover and Capital One) that do not charge a foreign transaction fee on any of their cards. For other cards, you’ll need to review the terms and conditions or rates/fee chart.

How can I find out if a credit card charges foreign transaction fees?

Credit card issuers are required to disclose any fees they charge on their credit cards. For an existing credit card, you can call the number printed on the back of your card, review the paper cardholder agreement that came with your card, or access your credit card account online.

For a credit card you are considering, a list of all of the fees/charges can be found via a link on the summary page or application page.

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