Key Link Chase Sapphire Preferred Visa.
- No foreign transaction fees.
- 40,000 points after spending $3000 within 3 months
- No fee the first year
- Double points on all travel and restaurant spend
- Points transfer to United, British Airways, Korean Airlines, Southwest, Amtrak, Hyatt, Marriott, Ritz-Carlton, and Priority Club.
My best credit card advice gets turned on its head when I leave the United States. For years I would tell people “put away the rewards cards, it’s not worth the 3% foreign currency transaction fee.” I actually found myself recommending Capital One cards because they didn’t add the 3% foreign currency charges to transactions outside the U.S.
And I still caution folks on rewards cards, because many of the best ones do add the fee. I love my Starwood American Express for most types of spending, basically for anything that isn’t bonused by another card and at merchants who accept American Express. But even though the card earns double points at Starwood hotel properties, I won’t use it at a Westin or Sheraton outside the United States because of the foreign currency conversion fee.
Fortunately, several cards – especially many Chase cards – have eliminated the fee. So you can earn rewards at the same time you’re avoiding the 3% surcharge on international transactions.
For the few months I had my Hyatt Visa before getting the Chase Sapphire Preferred I was in the awkward position of handing the Starwood or Hilton checkout clerk my Hyatt credit card. I wasn’t going to pay the darned fees even if I had to hand them Hyatt branded plastic!
Of course at any checkout desk the most important thing is to decline their offer to convert the bill to US dollars for you, instead of having your card company do it.
Remember that they are going to make the conversion at their own rate, and this is a profit center for them. Furthermore, cards that charge you 3% for foreign transactions generally do so regardless of the currency in which the transaction is made, they’ll usually apply the charges to any transaction originating outside the United States whether in dollars or some other currency. So if the hotel does it, you get whacked twice — an unfavorable exchange rate from the hotel and the 3% foreign transaction fee from the credit card company..
It goes without saying that while convenient to have the hotel exchange foreign currency for you, you won’t get an especially favorable rate, in general the best rates are going to be found taking money out of an ATM machine, where you’ll get your bank’s rate for the conversion. Of course you may be charged a fee by the ATM owner to use the machine, and possibly by your bank for using another bank’s ATM. I use a BankDirect checking account and they don’t charge me out of network ATM fees, and they rebate charges to use a competitor’s ATMs since they don’t have an ATM network of their own.
If I wind up taking out too much cash, I don’t convert it back to US dollars since I’d again incur a fee. I usually pay down my hotel bill with the excess local currency. Another trick is that in several countries you can add money to a US Starbucks card in the local currency, and let Starbucks do the conversion for you.
But anyone that travels internationally should have a no foreign transaction fee credit card in their arsenalEven if the card has an annual fee, you’ll cover a $90 fee after $3000 in spend outside the U.S. and that completely ignores the benefits of the points accrued from that spending.
My favorite no foreign currency transaction fee cards:
- Chase Sapphire Preferred Visa. This also happens to be one of my favorite cards for use in the United States, so it’s doubly valuable since I earn the same rewards and without a foreign transaction fee when traveling abroad. Double points on all travel and restaurant spend (which is most of my spending abroad anyway!). Visa acceptance. And points transfer to United, British Airways, Korean Airlines, Southwest, Amtrak, Hyatt, Marriott, Ritz-Carlton, and Priority Club. There’s no fee the first year and 40,000 bonus points after spending $3000 on the card in the first three months.
- American Express Platinum. A great card for the benefits, the lounge access benefits extend beyond just American, Delta, and US Airways because the card comes with a Priority Pass Select membership that offers access to lounges around the world. And no fee.
- Hyatt Visa. This was the very first no foreign currency transaction fee card I signed up for, the signup bonus is two free nights at any Hyatt property. Hyatt Platinum members also get confirmed suite upgrades, and Hyatt Diamonds get their free nights in a suite (I used mine at the Grand Hyatt Singapore). For the most part it’s been superceded in my wallet by the Sapphire Preferred card, but I keep it for the annual free night (up to category 4 hotels, which currently includes the Hyatt 48Lex in Manhattan, worth the $75 annual fee) and to earn 3 points per dollar at Hyatts. And rumor has it they’ll be improving the benefits of the card shortly.
- Chase Ink Bold Charge Card which gives 50,000 bonus points after $5,000 in spend within 3 months (and here are ways to make meeting your minimum spend easier), no fee the first year, points are the same as earned with the Chase Sapphire Preferred to equally valuable and flexible. This is my choice for small business credit card with no foreign transaction fees.
- British Airways Visa has the biggest signup bonus of any card with no foreign transaction fees, currently 100,000 points total — 50,000 after first purchase, 25,000 after $10,000 in spend during the first year, and 25,000 more after $20,000 in spend during the first year.
- United Club card earns 1.5 miles per dollar on all spend, comes with United club membership, also Hyatt Platinum and Avis Presidents Club statuses.
Some other cards that may be useful to some and which waive foreign transaction fees.
- Citi American Airlines Executive card
- Citi Thank You Premier
- Ritz Carlton Visa
- Fairmont Visa
- Priority Club Visa
- Marriott Premier Visa
- American Express Business Platinum
For folks who go outside the U.S. rarely, don’t spend a lot when they do, so the points-earning component of the card won’t matter it’s just about some savings on fees, Capital One Venture One is a no fee card with no foreign currency transaction fees.
Some folks will tell you that you need a card with a chip if you’re traveling to Europe. Sure, railway station kiosks perhaps. But for most of my travels I just don’t run into this. You won’t need a chip at a hotel or in restaurants.
There are two types of cards of this sort — chip and signature, these have a chip inside that verifies information for security, you still sign the transaction like any other. The Hyatt and British Airways cards from Chase are both chip and signature cards. This satisfies even most machine transactions.
But this has been all the rage in Europe, and there do exist terminals that will only accept chip and PIN, where you have a secret 4-digit PIN number that you enter rather than a signature. Some folks call desperately for this, I’d argue it’s a bit of a fetish amongst U.S. consumers who want to feel cutting edge or in the know, I’ve never tried to make a purchase yet that was rejected for lack of PIN.
I do have a Diners Club card, which since re-issued by the Bank of Montreal is now chip and PIN. But I really don’t like it. There’s less consumer protection with chip and PIN than with a standard card or one with chip that still requires signature.
That’s because you are responsible for safeguarding your PIN. If a card is used in a chip and PIN transaction and not by you, then a bank can claim that you must not have safeguarded your PIN, you’ll need to make the almost impossible case that you actually have and that your PIN was somehow hacked. It’s almost impossible to rebut this presumption once raised. This has been very commonplace in Europe.
I’ll hold out as long as I can against the notion of chip and PIN. It doesn’t appear to be on the verge of taking hold in the U.S., which I’m glad of. And until it’s truly global then areas tourists or international business folk frequent won’t be insisting on it for the most part, either.