How to Avoid Foreign Transaction Fees When Traveling Abroad

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Foreign Transaction Fees

Everything You Need to Know About Avoiding Credit Card Foreign Transaction Fees

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After two-plus years on hold, international travel is back on the docket for 2022 and beyond. But that brings about the return of one pesky part of a trip abroad: credit card foreign transaction fees.

Foreign transaction fees get passed on by many U.S. credit card companies – not by the store, retailer, or restaurant you're purchasing from – for transactions made outside the country, adding as much as 4% to any purchase you make abroad. These fees apply even if you're buying something online from a retailer based in another country.

Fortunately, avoiding these fees is fairly easy so long as you carry a credit card that doesn't charge foreign transaction fees – and as of 2022, most travel rewards credit cards waive these fees. But even with the right credit card in your wallet, there are other mistakes you can make when paying abroad that could cost you serious money.

So let's walk through some of our favorite credit cards that waive foreign transaction fees and some general tips for making payments and getting cash while traveling internationally.
 

 

Our Favorite Credit Cards Waiving Foreign Transaction Fees

These days, all the best travel rewards credit cards waive foreign transaction fees.

In many cases, these credit cards will have an annual fee of $95 or more a year … but not always. There's a growing list of no-annual-fee travel credit cards that don't charge foreign transaction fees. In fact, if you have any Capital One credit card, you're set: The bank doesn't charge foreign transaction fees on any of its credit card products!

Here is a list of some of our favorite credit cards that do not charge foreign transaction fees.
 

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred® Card is one of our favorite options when it comes to credit cards that waive foreign transaction fees. It's also one of our favorite beginner travel rewards credit cards.

The Sapphire Preferred is a Visa credit card, so it'll be accepted more broadly by merchants across the globe, no matter where you travel. And while the card does charge an annual fee of $95, it's a small price to pay when you factor in the benefits it provides. From the points to money-saving credits, you can easily come out way ahead.

  • Welcome Bonus: 60,000 Chase Ultimate Rewards points after spending $4,000 in the first three months of card membership. These points are worth at least $750 towards travel
  • 3x points per dollar spent on dining, including eligible delivery services
  • 3x points per dollar spent on online grocery purchases (excluding Target, Walmart, and wholesale clubs)
  • 3x points per dollar spent on select streaming services
  • 2x points per dollar spent on travel purchases
  • Earn up to $50 in statement credits each account anniversary year for hotel stays purchased through the Chase Ultimate Rewards Travel Portal
  • Earn 5x total points on travel purchased through the Chase Travel Portal, excluding hotel purchases that qualify for the $50 Anniversary Hotel Credit
  • Recommended Credit Score: Good-Excellent
  • Foreign Transaction Fees: None
  • Annual Fee: $95

Read More: A Full Review of the Chase Sapphire Preferred® Card

The Chase Sapphire Reserve® is another great option that doesn't charge foreign transaction fees. Think of it as the Sapphire Preferred's bigger sibling with more benefits, pushing the annual fee up to $550 a year.
 

Chase Sapphire Preferred Card 
 

Click Here to learn more about the Chase Sapphire Preferred® Card
 

The Chase Aeroplan Credit Card

Chase and Air Canada unveiled their new co-branded credit card for the U.S. market just a few months ago: The Aeroplan® Credit CardIf you're traveling internationally this summer and value Air Canada Aeroplan points for award travel, it might just be the single best card on this list.

That's because from July 1 through Sept. 30, 2022, you'll earn a whopping 10x points on international purchases. That's capped on up to $1,500 of spending through Sept. 30, which means you can earn up to 15,000 bonus points through the summer when traveling abroad. There's no registration required to earn that bonus.

Of course, you won't pay foreign transaction fees on those purchases as this card waives them. And as a Mastercard product, it should be accepted no matter where you go.

  • Welcome Bonus: 50,000 Aeroplan points after spending $3,000 in the first three months of card membership, then earn up to another 51,000 with a 10x bonus on travel and dining spending in the first six months of membership
  • 10x points total per dollar spent on international purchases from July 1 through Sept. 30, 2022
  • 3x points per dollar at restaurants worldwide
  • 3x points per dollar at grocery stores (excluding wholesalers like Costco as well as big-box stores like Target or Walmart)
  • 3x points per dollar on all Air Canada purchases
  • 1x points per dollar on all other purchases
  • Get 500 bonus points each month you spend $2,000 or more
  • Get a $100 fee credit toward Global Entry, TSA PreCheck, or even NEXUS
  • Free checked bag for yourself and up to eight travel companions on any Air Canada reservation
  • Foreign Transaction Fees: None
  • Annual Fee: $95

 

chase aeroplan card
 

Click Here to learn more about the Chase Aeroplan Credit Card
 

Capital One Venture X Rewards Credit Card

Like all Capital One credit cards, the Capital One Venture X Rewards Credit Card doesn't charge foreign transaction fees. But that just scratches the surface of the amazing benefits the card provides.

With an annual fee of $395, it doesn't come cheap. But you can easily get your money's worth out of that annual fee from just a few benefits … and then some. First and foremost, you'll get a $300 travel credit each and every year you hold the card to use for flights, hotels, or rental cars booked through Capital One. Use that up and the annual fee looks more like $95.

It's issued through the Visa payment network – the most broadly accepted card around the globe.

Here's a look at the full benefits the card provides:

  • Welcome Bonus: 75,000 Capital One Venture Miles after spending $4,000 in the first three months of card membership. These points are worth a minimum of $750 for travel
  • Receive up to $300 each year in statement credits when booking through Capital One Travel
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first cardmember anniversary
  • Earn unlimited 10x miles on hotels and rental cars booked through Capital One Travel and 5x miles on flights booked through Capital One Travel, plus unlimited 2x miles on all other purchases
  • Lounge access including a Priority Pass membership, Plaza Premium, and Capital One Lounge access
  • Get a $100 fee credit towards Global Entry or TSA PreCheck
  • Complimentary Hertz President’s Circle Status
  • Free additional cardholders
  • Foreign Transaction Fees: None
  • Recommended Credit Score: Excellent/Good
  • $395 Annual Fee

Read More: A Full Review of the Capital One Venture X Card
 

capital one venture x 
 

Click Here to learn more about the Capital One Venture X Rewards Credit Card

 

Capital One Venture Rewards Credit Card

The Capital One Venture Rewards Credit Card is another great credit card option that doesn't charge foreign transaction fees.

It doesn't offer as much in terms of benefits as the Capital One Venture X does, but it also doesn't cost as much either with an annual fee of only $95. Again, like all Capital One cards, it is issued through the Visa payment network which is the most accepted card around the globe.

Here is a look at the full list of benefits the Venture Card provides:

  • Earn 75,000 miles after spending $4,000 on purchases within the first three months of card membership. These points are worth at least $750 toward travel
  • Earn 2X miles per dollar on every purchase. There is no cap to the number of miles you can earn each year
  • Earn 5X miles on hotels and rental cars booked through Capital One Travel
  • Up to a $100 credit for Global Entry or TSA PreCheck
  • Fly on any airline or stay in any hotel with no blackout dates
  • Foreign Transaction Fees: None
  • Recommended Credit Score: Excellent/Good
  • $95 Annual Fee

Read more: A Full Review of the Capital One Venture Card
 

Capital one venture 
 

Click Here to learn more about the Capital One Venture Rewards Credit Card

 

Capital One VentureOne Rewards Credit Card

The Capital One VentureOne Rewards Credit Card is a great no annual fee travel rewards credit card that doesn't charge foreign transaction fees. It won't offer much in terms of benefits, but again, there is no cost to have the card in your wallet.

Here is a full look at the benefits of the VentureOne card:

  • Earn 20,000 miles after spending $500 on purchases within the first three months of card membership. These points are worth at least $200 towards travel expenses
  • Earn 1.25X miles per dollar on every purchase. There is no cap to the number of miles you can earn each year
  • Earn 5X miles on hotels and rental cars booked through Capital One Travel
  • Fly on any airline or stay in any hotel with no blackout dates
  • Foreign Transaction Fees: None
  • Recommended Credit Score: Excellent/Good
  • No Annual Fee

 

capital one ventureone card 
 

Click Here to learn more about the Capital One VentureOne Rewards Credit Card

 

American Express® Gold Card

Last but not least on the list of our favorite credit cards that waive foreign transaction fees is the American Express® Gold Card. While many Amex travel cards waive them, we like the Gold card as it offers one of the best returns you'll find on your everyday spending along with many other great benefits.

First and foremost, you'll earn 4x points per dollar spent at restaurants around the globe, and 4x points per dollar spent at U.S. supermarkets on up to $25,000 spent each year (then 1x). That is an incredible return in both categories.

But be warned, just because the Gold card waives foreign transaction fees doesn't mean you'll be able to use it abroad. While Amex is generally becoming more widely accepted across the globe, there are still plenty of international merchants who don't accept it as a payment method. So you might want to have a backup card in your wallet.

Here is a full look at the Gold Card's benefits:

  • Earn 60,000 Membership Rewards Points after spending $4,000 within the first six months of card membership … but see if you qualify for a 75,000- point offer via CardMatch with the same spending requirement
  • Earn 3x points for flights booked directly with airlines and at amextravel.com
  • Earn 4x points at restaurants on an unlimited amount of spending
  • Earn 4x points at U.S. supermarkets on up to $25,000 of spending per calendar year. 1x points per dollar spent after that
  • Earn 1x points on other purchases
  • Up to a $120 annual dining credit split up monthly in $10 increments for charges at GrubHub, The Cheesecake Factory, Goldbelly, Milk Bar, Wine.com, and Participating Shake Shack locations
  • Up to $120 in Annual Uber Credits split up into $10 monthly amounts. These can be used for Uber rides or for Uber Eats food delivery
  •  Amex Gold cardholders get a free year of Uber Eats Pass – Uber Eats’ paid membership with unlimited $0 delivery fees, 5% off all food deliveries over $15 at eligible restaurants or on eligible restaurant purchases.
  • No Foreign Transaction Fees
  • $250 annual fee (see rates & fees)

 

amex gold card
 

Click Here to learn more about the American Express® Gold Card

 

3 Tips for Making Payments Abroad

Having a credit card that waives foreign transaction fees is a great first step if you plan to do any sort of international travel. But there are a few other things that you'll want to be aware of before heading abroad…

 

Always Pay in the Local Currency

This is an important one.

When you use your credit card abroad, you may be faced with a decision to pay in U.S. dollars or in the local currency. Always pick the local currency.
 

point of sale device 

The reason? Something called dynamic currency conversion. While payment platforms might allow you to pay in U.S. dollars, the conversion rate is poor – you'll always wind up paying more. And since you're not paying foreign transaction fees anyway, you might as well pay in the local currency.

While it may seem convenient to pay in U.S. dollars when using your credit card, it will simply cost you more. Pay in the local currency and save yourself some money.

 

Get a Debit Card With No Foreign Transaction Fees, Too

Having a credit card that doesn't charge foreign transaction fees is essential for traveling abroad, it is also a good idea to have a debit card that doesn't charge ATM fees or foreign transaction fees for when you need some cash.

If you plan to travel abroad even semi-regularly, you need the Charles Schwab debit card. This free international checking account is a must in any traveler’s wallet because it means you’ll never pay ATM fees, in the U.S. or internationally, and you won't pay foreign transaction fees.

We don’t get paid to promote this card. It’s just the best solution for travelers to get money while on the road.
 

charles schwab debit card 

The Schwab debit card allows you to take out cash from any ATM anywhere in the world and refunds 100% of any withdrawal or ATM fees you pay at the end of each month. This is a foolproof way to avoid international ATM fees and get the best currency exchange rate possible.

Read more: No International ATM Fees: Get the Charles Schwab Debit Card

 

Don't Rely on American Express

While American Express has some great travel rewards credit cards like The Platinum Card® from American Express and the American Express® Gold Card that waive foreign transaction fees, it is still a good idea to make sure you have a Visa or Mastercard in your wallet before you head abroad.

That's because you may still find that many merchants abroad still don't accept American Express.

The reason? American Express has historically charged much higher merchant fees – the fees stores have to pay to card payment networks like American Express when they accept their cards for a transaction. Fees for Visa, Mastercard, and Discover cards generally range from 1.5% to 2.5% of each transaction, while American Express fees were in the 2.5% to 3.5% range.
 

amex platinum and gold cards 

Due to those higher fees, fewer merchants in the U.S. and abroad accept American Express compared to Visa or Mastercard. But that is changing. In 2018, American Express lowered those merchant fees, bringing them on par with other payment networks. But it will take time: Even four years later, many merchants still don't accept Amex cards.

In another four years, we may see Amex as broadly accepted as other credit cards. But for now, make sure you have a Visa or Mastercard that doesn't charge foreign transaction fees at your disposal.

 

Bottom Line

Having a credit card that waives foreign transaction fees is an essential part of traveling internationally if you want to save some money. But there's more to it than that if you want to save while traveling abroad.

Make sure to follow these tips to make paying for things cheaper and easier on your next trip abroad.

 

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

2 Responses

  • I recently opened a Wise account too in order to pay with a debit card using the local currency. Great for avoiding exchange fees altogether and the exchange rates are stellar

  • If I run into a place that charges fees, I try to use the local currency instead. If I have some cash left, I pay my last hotel bill with it and then charge the balance.
    Another technique is to maximize your ATM withdrawals- don’t do frequent small withdrawals to reduce your costs. Often there is a transaction fee you are charged each time.

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