Top credit cards with NO Foreign Transaction Fees

Printed with permission from US News and Report

When it comes to use outside the U.S., not all credit cards are created equal. Many credit cards carry a surcharge that is levied when cardholders make purchases while traveling abroad. Known as foreign transaction fees, these charges can quickly accumulate for cardholders who travel often, even to the point of canceling out any rewards earned through spending.
However, foreign transaction fees are generally becoming less prevalent on today’s credit cards. Regardless of the type of card you are looking for, you can usually find one that meets your needs and also does not charge foreign transaction fees. These cards can help make foreign travel safer, less expensive and more convenient with their associated card perks and benefits.

What Are Foreign Transaction Fees?

Foreign transaction fees, or FX fees, are costs added onto your statement for purchases made outside the U.S that pass through a foreign bank or are made in a foreign currency. This includes online purchases from a seller in a foreign country that are not made in dollars. The fee is calculated as a percentage of the purchase price, usually between 2 and 3 percent.
When you make a credit card purchase in a foreign country, your credit network converts the foreign currency to dollars using its exchange rate process. It then charges your bank an FX fee based on that dollar amount, typically 1 percent, to offset that conversion cost and to address the added risk of fraud inherent to international transactions. Your bank passes that FX fee on to you and adds its own fee of 1 to 2 percent.
Through a process known as dynamic currency conversion, it is possible to be charged in dollars while traveling abroad, but for a variety of reasons, you should always avoid it.
Dynamic currency conversion
At the point of sale, a foreign merchant may ask if you want to be charged in dollars instead of local currency, so that you have a better idea of what the item you’re purchasing costs. While this dynamic currency conversion may sound like a good idea, it’s best to decline and pay in local currency.
Also, the fee that merchants tack onto your bill for the convenience of paying in dollars can be as high as 7 percent of the purchase price. As Business Insider points out, shopkeepers in busy stores in tourist areas may be unable or unwilling to inform you of the extent of their fee. Additionally, it might not save you from paying a foreign transaction fee, as some credit cards charge an FX fee even for foreign transactions in U.S. dollars, just at a slightly lower rate.
Finally, you’re much more likely to get a better exchange rate by letting your credit card provider do the currency conversion to dollars.

Choosing a Card With No Foreign Transaction Fee

Determine what type of credit card you want.
There are many types of credit cards that don’t charge a foreign transaction fee. So when choosing a card with no foreign transaction fee, first figure out what type of credit card you want and then select the best one in that category with no fee.
If you have a below-average or poor FICO credit score, you will want to choose a credit card for bad credit that also has no foreign transaction fee.
Make sure the card is widely accepted overseas.
You should verify that the card can be used overseas. Visa and MasterCard are the most widely accepted, with the former serving customers in more than 210 countries and the latter serving more than 200 countries. It’s unlikely to find a merchant that won’t accept either card.
Due to higher processing fees, American Express and Discover have much lower acceptance rates worldwide than Visa and MasterCard. They’re fairly well-accepted in the U.S., Canada and Mexico, but less so elsewhere. For example, you can’t use a Discover card in some South American and European countries or most of Africa.
American Express doesn’t publish exactly where you can find merchants who accept its cards, but travel experts routinely caution against taking only an American Express card on an overseas trip. Still, AmEx is improving its global reach and has joined Visa and MasterCard in partnering with Apple to allow customers to pay for purchases abroad through Apple Pay with any merchant equipped to handle NFC transactions, or mobile payments.
Make sure the card has an EMV chip for maximum usability.
Europay, MasterCard and Visa, or EMV for short, is a security technology that has only recently gained significant acceptance in the United States but has been widely used around the world for years. While the standard in Europe, Asia, Latin America, Australia and elsewhere are chip-and-PIN EMV cards, the U.S. has predominantly adopted chip-and-signature EMV technology.
Nevertheless, chip-and-signature cards should work in virtually all situations and should definitely be the cards you depend on overseas. Unchipped, magnetic-stripe cards should work; in fact, merchants who accept Visa and MasterCard are required to accept magnetic-stripe cards. But some merchants can be wary of them and may refuse to accept them, mistakenly thinking they will be held liable for fraudulent transactions on an unchipped card, even though that liability lies with your bank. Unattended service kiosks like those at train stations are also known to present problems for chipless cards, requiring travelers to seek out an attendant and potentially wait in long lines.
Look for useful travel benefits.
Many cards with no foreign transaction fees stand out as great travel cards thanks to their extensive travel benefits. World Elite MasterCards and Signature Visa cards in particular offer perks like:
  • Trip cancellation/interruption insurance
  • Trip delay reimbursement
  • 24/7 concierge services
  • Lost luggage reimbursement
  • Car rental theft and collision coverage
  • Baggage delay insurance
  • Roadside assistance
  • 24/7 customer service
While these benefits are helpful for any trip, cards from both networks can prove extremely useful when traveling in a foreign country. For example, 24/7 concierge services can help you plan your international journey all the way down to details like dinner reservations. They also provide lots of emergency services, which are detailed below in Advice for Traveling Abroad With Your Credit Card.

The Best Credit Cards With No Foreign Transaction Fee

U.S. News selected the best cards with no foreign transaction fee across a wide variety of credit card types.
  • Chase Sapphire Preferred Credit Card
  • Bank of America Travel Rewards Credit Card
  • Chase United MileagePlus Explorer Card
  • Citi / AAdvantage Platinum Select World Elite MasterCard
  • Chase Southwest Rapid Rewards Premier Card
  • Bank of America Virgin Atlantic World Elite Black MasterCard
  • Chase Marriott Rewards Premier Credit Card
  • Chase Ink Business Preferred Credit Card
  • Quicksilver from Capital One
  • Journey Student Rewards from Capital One

Share this:



Post a Comment