If you travel often, you know the benefits of using a credit card instead of cash. Need to pay for something? Simply take that piece of plastic out of your wallet, swipe, and pay. But are credit cards the best option when you travel overseas? Only if you have the best credit cards with no foreign transaction fee.
But the simple answer is yes, especially if you choose one that does not charge you foreign transaction fees. This is because credit cards offer the best exchange rates for overseas travelers. You can save up to 11% by using your credit card instead of converting dollars into the local currency.
There are many credit cards that don’t charge these transaction fees, and they offer other benefits too.
What are foreign transaction fees?
Any time you make a purchase with a non-U.S. retailer, you can be charged a foreign transaction fee. So whether you are traveling overseas and use your credit card to make a purchase or you make purchases online from a foreign website, these fees may be charged. They are assessed by both your payment network (i.e. Mastercard or Visa) and your bank or other financial institution. The total is usually about 3% of your transaction amount.
Say you spend a great time in Europe with your family and rack up $10,000 in credit card charges for hotels, food and souvenirs. If you use a credit card with foreign transaction fees, that’s an extra $300 you have to pay back to your credit card company using the 3% average.
However, if you find a card issuer that absorbs the costs of foreign transaction fees to appeal to frequent travelers, you won’t face that additional cost.
Benefits of travel credit cards with no foreign transaction fees
Besides saving your money and getting a better exchange rate, there are other reasons to consider a travel credit card with no foreign transaction fees.
You can get more out of credit cards with cash-back rewards when you aren’t being charged foreign transaction fees. With most cash-back rewards programs, you earn back 1% to 5% of your purchases. However, if you were paying 3% in foreign transaction fees, you end up back at 2% or less.
Losing your credit card while overseas also isn’t as scary as having your cash stolen. Nowadays, a credit card can be replaced in as little as 24 hours. If you report it stolen, all unapproved transactions will be reversed.
Lastly, many of these cards have other perks for travelers.
Let’s take a look at our picks for the top cards available.
Best Credit Cards With No Foreign Transaction Fee
The Chase Sapphire Card is linked to one of the most flexible rewards programs available. Points are earned on all purchases and can be used for traveling, purchasing gift cards or redeeming for cash.
- If you spend $4,000 in the first three months after opening an account, you receive 50,000 bonus points. This converts to $625 when redeemed through Chase’s Ultimate Rewards program or $500 in cash.
- You could earn an additional 5,000 points by adding an authorized user and making a purchase within the first three months of opening the account.
- You will earn three times points on airline tickets purchased directly from the airline, two times points on travel and dining worldwide, and two times points on gas, groceries and dining in the U.S.
- All other purchases earn a point per dollar.
- All points earned can be transferred to a variety of airline or hotel loyalty programs.
- There are no restrictions on travel times.
- $95 annual fee, waived the first year.
- APR of 16.49% to 23.49%.
- Cash advance APR of 25.49%.
The Discover it Miles credit card has some excellent benefits for travelers. Earn rewards in the form of travel miles with every purchase made.
- Every dollar spent on purchases earns 1.5 times traveler miles.
- At the end of the first year, you are rewarded with a mile for mile match applied to all the rewards you have earned over that time.
- Any rewards you have earned can be redeemed for travel credit, cash or a statement credit. You receive $1 per 100 miles.
- Added bonus: you receive your credit score free each month.
- No annual fee.
- For the first 14 months, 0% annual percentage rate (APR) on purchases and 10.99% APR on balance.
- An APR of 11.49% to 23.49%.
- Balance transfers cost of 3%.
Spend $500 on purchases within three months of opening the Capital One Quicksilver credit card and receive $100 cash back.
- Get 1.5% cash back on all purchases (unlimited).
- No limit to cash-back rewards and they don’t expire.
- Get nine months with 0% APR on purchases.
- This card has no annual fee.
- APR varies from 13.49% to 23.49%
- If you make a cash advance, the APR will be 23.49%.
With the Capital One® Venture℠ Rewards credit card, you can earn a bonus of 40,000 miles ($400 in travel) if you spend $3,000 within the first three months of opening the account.
- Everyday purchases earn 2 times miles for each dollar spent.
- Zero restrictions on airlines or hotels when booking.
- No restrictions on travel time, so you can earn miles all year round.
- No limit on miles earned.
- Miles earned never expire.
- $59 annual card fee, waived the first year.
- An APR of 13.49% to 23.49%.
- Cash advance APR of 23.49%.
This card was named “Best Travel Rewards credit card” in Kiplinger’s annual “Best List.” New account holders who make $1,000 in purchases in the first 90 days receive 20,000 online bonus points. This equates to $200 credit toward travel.
- 0% introductory APR on purchases for 12 months.
- Each dollar spent earns 1.5 times points.
- Receive a 10% point bonus if you have other Bank of America products such as a savings or checking account. This bonus increases to 25% to 75% if you are a Preferred Rewards customer.
- No restrictions on the websites used to book your travel, dates, airlines or hotels booked.
- Points can be redeemed to pay for anything travel related, including flights, hotel, cruises, baggage fees, car rentals or full vacation packages.
- No annual fee.
- APR of 15.49% to 23.49%.
- Up to 29.99% penalty APR.
If you open a City Thank You Premier card and make $3,000 in purchases in the first three months, you receive 30,000 bonus points.
- Each dollar spent on travel earns three Thank You® points (including gas purchases).
- Each dollar spent on dining/entertainment earns two Thank You® points.
- All other dollars spent earn one Thank You® point.
- Pts never expire and there is no limit to how many you can earn.
- Points can be transferred into airline and hotel loyalty programs.
- Points can be exchanged for travel benefits, cash, gift cards and merchandise.
- An annual fee of $95, waived the first year.
- Balance transfer fee of 3% of the amount transferred.
- APR of 14.49% to 23.49%.
If you open a Barclaycard Arrival Plus™ World Elite Mastercard® account and spend $3,000 on purchases within the first 90 days, you receive 50,000 bonus miles. This equates to $500 that can be redeemed for travel.
- You will earn two times points on all purchases.
- Points can be redeemed for statement credits, merchandise or gift cards.
- By redeeming points, you receive 5% miles back that are used toward your next redemption.
- Keep your account active and in good standing and any miles accumulated will not expire.
- You receive an introductory APR of 0% for 12 months on balance transfers made within the first 45 days of the account opening.
- No annual fee for the first year, $89 thereafter.
- APR of between 16.49% to 23.49%.
- APR on cash advances of 25.74%.
All new Platinum Card from American Express® account holders earns 40,000 points when you spend $3,000 in the first three months.
- Five times Membership Rewards points for all airline tickets purchased directly with the airline or American Express® Travel.
- Annual $200 airline credit fee.
- Credit of $100 for Global Entry.
- Access to a variety of airport lounges.
- You receive gold status with several hotel loyalty programs, including Hilton Honors and Starwood Preferred Guest.
- An annual fee of $450.
Finding the right card
It can be difficult to make sure you choose the card that is right for you, especially as a frequent traveler.
To help you here’s our personal credit card page, where you can read reviews from others and compare card features to find the best one for you.
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.