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Traveling is always popular during the summer months and around the holidays, but how you intend to pay for your vacations could mean the difference between hundreds of dollars. If you pay with cash –or directly from your checking account- you know the cost will be as-is. However, if you pay with a credit card, the costs could be more than what you see on your statement.
Credit cards with no annual fee are valuable to cardholders because nobody wants to pay to carry. But what’s even more valuable, especially for those that love to travel, are credit cards that come with no foreign transaction fees.
What Are Foreign Transaction Fees?
Foreign transaction fees apply when a credit card is used internationally and can range from 1-3% per transaction, although on rare occasions I’ve seen them go as high as 4% per transaction. Be sure to check the terms and conditions of your credit card so you know how much you're assessed. Foreign Transaction fees can be applied by both the card issuer, like Citi or Chase, and also by the processor, such as Visa or MasterCard.
When making purchases in foreign countries, consumers may have the option to pay in their own country’s currency using Dynamic Currency Conversion (DCC). DCC is a service offered to merchants who can convert the purchase price into another currency using an exchange rate, and it usually comes with a service fee. According to Visa, consumers have the option to refuse DCC, so the transaction would then be billed in the merchant’s local currency using Visa’s conversion rate. Most warn against opting to use DCC.
Consumer Cards with No Foreign Transaction Fees
No foreign transaction fee credit cards are attractive to cardholders who would like the convenience of using credit cards for their purchases while abroad without being charged interest. Many travel rewards credit cards don’t come with foreign transaction fees. In fact, among the 12 largest credit card issuers, approximately 37% of consumer credit cards are free of foreign transaction fees. Thank goodness, because traveling to foreign countries is expensive enough without the added costs!
If you are a traveler that does not typically carry cash, foreign transaction fees can be expensive. You may have considered carrying and converting cash to the currency at your final destination, however, there is a more suitable option; credit cards that don’t have these fees.
Below is a list compiled of popular consumer credit cards that come without foreign transaction fees, so you may enjoy your international travels without any added fees.
- All Capital One consumer cards
- All Discover consumer cards
- American Express® Premier Rewards Gold Card
- BankAmericard Travel Rewards® Credit Card
- Barclaycard® Arrival Plus World Elite MasterCard®
- Barclaycard® Arrival World MasterCard®
- Barclaycard® Ring MasterCard®
- Chase Sapphire Preferred®
- Citi® Hilton HHonors Reserve Card
- Citi Prestige® Card
- Citi ThankYou® Premier Card
- The Platinum Card® from American Express
- British Airways Visa Signature® Card
- Hyatt Credit Card
- IHG® Rewards Club Select Credit Card
- Marriott Rewards® Premier Credit Card
- Southwest Airlines Rapid Rewards® Premier Credit Card
- United MileagePlus® Club Card
- United MileagePlus® Explorer Card
Business Credit Cards with No Foreign Transaction Fees
Business owners may elect to carry one of the business credit cards that offer no foreign transaction fees, which can become even more expensive if you have employee-issued credit cards as well. Some of these credit cards may also feature no annual fees as well as offering free employee business credit cards.
Below is a short list of popular business credit cards that come without foreign transaction fees.
- The Business Platinum Card® from American Express
- All Capital One Business Credit Cards
- Gold Delta SkyMiles® Business Credit Card from American Express
- Ink Plus® Business Card
Although no foreign transaction fee credit cards are becoming more popular, these fees have yet to completely disappear.Consumers can avoid these charges altogether, by carrying a credit card that does not penalize cardholders for purchases made overseas, is one every traveler should consider.
How to Avoid Extra Costs When Traveling
There are six more ways you can avoid paying extra fees besides carrying a credit card that comes with no foreign transaction fees.
1. Buy foreign currency ahead of time, which locks in your exchange rate
2. Pack multiple forms of payment such as your bank card, credit card, cash, and travelers checks
3. Inform your bank you’re traveling and let them know where
4. Use your bank’s international partners
5. Pay your bills before you leave so you’re not hit with accidental overdraft fees
6. Prepare your PIN before leaving the country
Before you travel, don’t forget to notify your bank!
* Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.