Traveling abroad can be an exciting and rewarding experience. Whether you’re exploring Europe, relaxing on a beach in the Caribbean, or trekking through Asia, one thing is for sure: you’ll likely be using your credit card for a variety of expenses. But here’s the catch: many credit cards charge foreign transaction fees, which can add up quickly and eat into your travel budget.
Fortunately, there’s good news: travel credit cards with no foreign transaction fees are becoming more common, and they can help you save a significant amount of money while traveling. In this article, we’ll explore why foreign transaction fees are such a big deal, how these fees work, and the best travel credit cards to consider when you’re planning your next international adventure.
Why Should You Care About Foreign Transaction Fees?
Before diving into the options, let’s break down why foreign transaction fees should be on your radar when choosing a credit card for travel. Foreign transaction fees are typically charged when you use your credit card outside of the United States. They are usually between 1% and 3% of each transaction, which may not seem like much at first glance. But consider this: if you’re traveling for a couple of weeks and making regular purchases, those fees can easily add up to tens or even hundreds of dollars.
For example, let’s say you’re spending $2,000 on your trip to Europe. If your card charges a 3% foreign transaction fee, you’ll be paying an extra $60 just for using your card abroad. That’s $60 that could have gone toward an extra night in a hotel, a nice dinner, or an unforgettable experience.
How Do Foreign Transaction Fees Work?
Foreign transaction fees apply whenever you make a purchase in a foreign currency, even if the transaction is processed in U.S. dollars. Let’s say you’re in Mexico, and you use your card to buy a souvenir. The merchant might process the payment in pesos, but your card issuer will still charge a fee for converting the purchase into U.S. dollars. This conversion fee typically makes up the majority of the foreign transaction fee, though some cards may charge additional fees for international processing.
Not all credit cards impose these fees, however. Some issuers offer special travel cards that waive foreign transaction fees, which is a huge perk for frequent travelers.
The Benefits of Using Travel Credit Cards with No Foreign Transaction Fees
When you use a travel credit card with no foreign transaction fees, you can rest easy knowing that you’re not getting hit with hidden costs every time you swipe your card abroad. Some of the main benefits include:
- Saving Money: As mentioned earlier, not having to pay a 1%-3% fee on every purchase can save you a significant amount, especially during longer trips.
- Simplified Currency Conversion: With no additional fees, you’ll get a clearer idea of what your purchase will actually cost you in your home currency. No surprise charges means more predictable budgeting.
- Earning Travel Rewards: Many of the best travel credit cards with no foreign transaction fees come with valuable travel rewards programs. These rewards can be redeemed for flights, hotel stays, and other travel-related expenses.
- Travel Perks: In addition to waiving foreign transaction fees, some of these cards come with other travel benefits, like trip insurance, airport lounge access, and free checked bags. If you travel frequently, these extra perks can enhance your overall travel experience.
The Best Travel Credit Cards with No Foreign Transaction Fees
Now that you understand the importance of avoiding foreign transaction fees, let’s take a look at some of the best travel credit cards with no foreign transaction fees.
1. Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card is one of the top picks for travelers looking for a card that offers great rewards and no foreign transaction fees. Here’s what makes it stand out:
- Sign-Up Bonus: Earn 60,000 bonus points after spending $4,000 in the first 3 months (worth $750 in travel through the Chase Ultimate Rewards® program).
- Rewards: Earn 2x points on travel and dining, and 1x point on other purchases.
- Travel Benefits: Includes benefits like trip cancellation insurance, primary rental car insurance, and travel accident insurance.
- No Annual Fee for the First Year: The card comes with an annual fee of $95, but it’s waived for the first year.
2. Capital One Venture Rewards Credit Card
The Capital One Venture Rewards Credit Card is another great option for travelers. This card allows you to earn unlimited 2x miles on every purchase, making it a straightforward choice for those who want to rack up rewards quickly.
- Sign-Up Bonus: Earn 75,000 bonus miles after spending $4,000 on purchases within the first 3 months (worth $750 in travel).
- Rewards: Earn 2x miles on every purchase and redeem miles for travel expenses.
- Travel Benefits: Travel accident insurance, 24-hour travel assistance, and no foreign transaction fees.
- Annual Fee: $95.
3. The Platinum Card® from American Express
If you’re looking for a premium travel card with excellent perks, the Platinum Card® from American Express is a fantastic choice. While this card does come with a high annual fee, it offers tons of luxury benefits.
- Sign-Up Bonus: Earn 80,000 Membership Rewards® points after spending $6,000 on purchases in the first 6 months (worth $800 in travel).
- Rewards: Earn 5x points on flights booked directly with airlines or through American Express Travel, and 1x point on other purchases.
- Travel Benefits: Access to airport lounges, trip delay insurance, global entry or TSA PreCheck fee reimbursement, and more.
- No Foreign Transaction Fees and a high-quality travel experience come with the card, though the annual fee is $695.
4. Citi Premier® Card
The Citi Premier® Card is another great option for travelers. It offers solid rewards on travel-related purchases and no foreign transaction fees.
- Sign-Up Bonus: Earn 80,000 bonus points after spending $4,000 in the first 3 months (worth $800 in travel).
- Rewards: Earn 3x points on travel (including gas stations), 2x points on dining and entertainment, and 1x point on other purchases.
- Travel Benefits: Includes trip protection, extended warranty protection, and no foreign transaction fees.
- Annual Fee: $95.
5. Discover it® Miles
If you’re looking for a no-annual-fee option, the Discover it® Miles card could be just what you need. This card offers simple rewards with no foreign transaction fees.
- Rewards: Earn 1.5 miles for every dollar spent on purchases.
- Introductory Offer: Discover will match all the miles you’ve earned at the end of your first year.
- No Annual Fee and no foreign transaction fees make this a great card for budget-conscious travelers.
- Additional Benefits: No late fee on your first late payment, and Fraud Protection.
How to Maximize Your Travel Credit Card Benefits
To get the most out of your travel credit card, follow these simple tips:
- Use Your Card for Everyday Purchases: The more you use your card, the more rewards you’ll earn. If your card offers 2x or 3x points on travel and dining, those expenses will quickly accumulate points.
- Redeem Points for Travel: Many cards offer the best redemption value when you use points for travel. Consider booking flights, hotels, and experiences through your card’s reward portal.
- Take Advantage of Travel Perks: If your card offers perks like trip insurance, lounge access, or free checked bags, make sure you use them to enhance your travel experience and save money.
- Pay Off Your Balance in Full: To avoid interest charges, pay off your balance in full every month. This will help you maximize your rewards without getting stuck with extra debt.
Final Thoughts
Traveling internationally doesn’t have to be expensive, and with the right travel credit card, you can save a significant amount by avoiding foreign transaction fees. The cards mentioned above are some of the best options available, offering excellent rewards and benefits for travelers who want to save money while exploring the world. Whether you’re looking for a no-annual-fee option or a premium card with luxury perks, there’s a travel credit card for everyone. So, next time you plan your trip, make sure to choose the right card to maximize your rewards and minimize those pesky fees!