Best Credit Cards Without Foreign Transaction Fees

August 26, 2022 5 Min Read

Best Credit Cards — Photo by Avery Evans on Unsplash

A credit card is a must-have when traveling internationally. Not only will it save you from constantly having to convert cash at a bank in a different country, but the right credit card can save you a lot on foreign transaction fees. Foreign transaction fees are added onto your credit card transactions when you’re outside of the US. They’re charged to cover currency conversion fees, and usually cost about 3% of the transaction. Some credit cards — primarily in the travel credit card domain — offer no foreign transaction fees as a benefit. Even if you’re only traveling outside the country once in a while, having this type of card could be worthwhile.

Best overall credit card with no foreign transaction fees

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred® Card has one of the best value propositions of travel credit cards. It starts with no foreign transaction fees, but the rewards program and welcome bonus are also best in its class. Points are worth 1 cent each if you redeem them for a statement credit, but they’ll be worth 25% more if you redeem your rewards for travel booked through the Chase Ultimate Rewards portal. The Sapphire Preferred also includes trip cancellation and interruption insurance, an auto rental collision damage waiver and lost luggage insurance. While many travel credit cards offer some of this coverage, they rarely offer the full spread.

Check out more details in our full review of the Chase Sapphire Preferred Card.

Best welcome bonus with no foreign transaction fees

Discover it® Miles

The Discover it® Miles* card offers an excellent welcome bonus after your first year as a cardholder. All Discover cards have no foreign transaction fees, but this one ensures all your international spending is optimized for rewards — you earn 1.5 miles per dollar on all your purchases. While you don’t have to meet any minimum spending thresholds to unlock this welcome bonus like with most other credit cards, you do have to be patient to earn it. Discover will match all of the miles you earn over the course of the first year at the end of your first year.

A flat-rate travel rewards card

Capital One Venture Rewards Credit Card

Capital One loads the Venture Rewards Credit Card with plenty of travel perks to offset the $95 annual fee. Travel anywhere without any foreign transaction fees and earn 2x unlimited miles on all purchases. In addition, Capital One awards you up to a $100 statement credit for Global Entry or TSA PreCheck to help you speed through the airport lines. Venture Miles earned can be redeemed on flights and hotels or used to pay for Amazon.com and PayPal purchases. You can also transfer miles to over 15 hotel and airline programs.

Also Read 9 Tips to Help You Kick Off Your Self-Discovery Journey

Check out our full review of the Capital One Venture Rewards Credit Card.

Travel card with no annual fee

Bank of America® Travel Rewards credit card

The Bank of America® Travel Rewards credit card doesn’t come with foreign transaction fees or an annual fee. You’ll earn 1.5 points for every dollar you spend, with no limit. The introductory APR offer can provide you with some wiggle room to spread out your card payments without incurring interest charges.

See our full review of the Bank of America Travel Rewards card for more information.

For building credit while overseas

Capital One QuicksilverOne Cash Rewards Credit Card

Most cards with low fees and perks are reserved for individuals with stellar credit. The Capital One QuicksilverOne Cash Rewards Credit Card fills an important gap by giving people with limited or fair credit a chance to get started or build with responsible use. Use this card wisely — you’ll automatically get considered for a credit limit increase as soon as six months from approval, potentially boosting your credit score. Spend wisely, enjoy the cash back, make your payments on time and take advantage of unlimited access to your credit report through CreditWise. You’ll start to see over time how good financial decisions can impact your credit.

Tips for using a credit card when traveling internationally

Before you get on an airplane, there are a few steps you should take:

If you have a mag stripe card, request a chip credit card from your card provider in advance of your trip.
Set up a travel alert with your card issuer to notify them of what countries you will be visiting or your card may be flagged for fraud.
Take two credit cards and keep them in separate places, in case your wallet is lost or stolen.
Sign up for email or text alerts about charges to monitor your card purchases.
Use a credit card with no foreign transaction fees.
If your card has no transaction fees and you’re prompted to choose the payment currency, choose to pay in local rates instead of dollars — you’ll get your bank’s wholesale exchange rate, which would be more favorable than the merchant’s.
Get familiar with the exchange rate for the country you’re visiting so you have an idea of how much you’re actually spending.

FAQs

What are foreign transaction fees and when are they charged?

Card issuers or banks charge foreign transaction fees to cover the cost of exchanging a purchase from the foreign currency to US dollars. If you make a purchase in foreign currency, it’s likely you will be charged for the conversion unless you have a no-transaction-fee credit card.

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One way to avoid having to pay a foreign transaction fee when you’re traveling abroad is to choose to pay in US dollars. Many store credit card terminals will recognize your foreign card and prompt you to choose whether you’d like to pay in the local currency or US dollars. If you choose local currency, you may have to pay your bank or card issuer the transaction fee to exchange it. However, if you choose to pay in US dollars, there is no conversion to be performed.

Keep in mind that if you choose to pay in US dollars, you may save on the transaction fee but the foreign merchant bank may still tack on a commission for the exchange. The best way to avoid unnecessary fees is to pay with a credit card with no transaction fees.

Which credit cards work worldwide?

Mastercard, Visa, American Express and Discover are the four major credit card processors. Visa and Mastercard are the two most widely accepted credit cards across the world and your best bet if you intend on traveling overseas and paying for goods with a credit card.

American Express may be popular in the US, but it’s not as widely accepted abroad. Discover is even less accepted than American Express outside of the US. To be safe, it’s a good idea to carry a Mastercard or Visa as a backup if your primary card is an American Express or Discover.

Do I need a chip-and-PIN credit card when traveling?

Most of Europe has adopted the chip-and-PIN credit card system, which eliminates swiping of magnetic strips and signatures. Instead, card readers will prompt you to insert the card (or tap it for touch-free transactions) to read the chip and prompt you for a PIN as a form of verification. Before you travel overseas, ask your card issuer for a chip card. Otherwise, you may have trouble using a mag-stripe credit card for purchases abroad.

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