Conde’ Nast Traveler‘s Wendy Perrin asks in the comments,
I would like to know which are the best credit cards that waive foreign-transaction fees while also offering the biggest payoff when it comes to miles/points.
The short answer: Chase Sapphire Preferred Card, which does not hit you with any foreign transaction fees and gives you double points on all travel and dining charges (which are quite a bit of the expenses you’re likely incurring outside the U.S.). And the best small business card is the Ink Plus which has no foreign transaction fees plus double points on hotels.
The longer answer…
This is an important question for people who travel outside the United States. Most credit cards tack on a fee – such as 2.7% or 3% – for purchases originating outside the U.S.
And it’s even an important question for people who make purchases that are processed outside the U.S. even if they are made sitting in your living room or office.
Card companies tack on a fee to convert whatever currency you make a transaction in back to U.S. dollars. Sure, they may use a good rate for the conversion but this surcharge is a killer.
And they even charge the fee if the vendor bills you in dollars. Say your hotel in Thailand bills you in dollars, your credit card may still tack on this same fee because the transaction originated outside the U.S.
- Cards that have no foreign transaction fees can save you a bundle (just how much depends on how much money you spend outside the United States).
- Converting your hotel, restaurant, or other bills from local currency to dollars does not save you money. And you’re likely getting a bad exchange rate when you do it, so it’s costing you real money. Do not ever do this.
Always pay non-US dollar charges in the local currency, and use a credit card that does not charge foreign transaction fees to make the payment.
Chase Has the Most and Best Cards With No Foreign Transaction Fees
The reason I recommended the Chase Sapphire Preferred Card for foreign transactions is because it both waives those fees and offers among the most useful rewards and bonuses expenses most likely to be incurred internationally.
- 40,000 point signup bonus after $3000 spend within 3 months. An additional 5000 points for adding an authorized user on the account and making a purchase.
- Double points on all travel and dining
- Annual 7% bonus on all points earned
- Points transfer to United Airlines, Korean Air, British Airways, Virgin Atlantic, Southwest Airlines, Hyatt, Marriott, Ritz-Carlton, IHG Rewards and Amtrak
Probably my personal favorite card, the Ink Plus Business Card, has no foreign transaction fees and earns double points on hotels as well. Points transfer the same way that they do for Chase Sapphire Preferred.
There are several other Chase cards that waive foreign transaction fees, the bank as an overall strategy was an early adopter of waiving these fees – presumably they see it as a strong marketing sales point for attracting high spend customers, and certainly survey suggest such fees are a pain or annoyance point for customers.
- The IHG Rewards Club Select MasterCard — which is worth holding for an annual free night (well worth the $49 annual fee) and the rebate on IHG Rewards redemptions — has no foreign currency transaction fees but I do not consider it to be a good card for spending.
- British Airways Visa Signature® Card has no foreign transaction fees and earns 1.25 points per dollar on all spend. $30,000 in spend on the card earns a ‘travel together’ ticket, second passenger flies for no additional points when redeeming award travel, although since award availability has to be found on British Airways flights only and since award space has gotten much tougher to come by especially from U.S. West Coast gateways and to Africa, the usefulness of that ticket is probably less than it was a couple of years ago.
American Express Offers Fewer Options, But is Beginning to See the Light
The Platinum Card® from American Express was the first major offering that Amex made with no foreign currency transaction fees. Coupled with the card’s $100 credit for the Global Entry application fee, they clearly want to position it as a strong card for international travelers (who tend to be high net worth and high spenders). Here’s my review of the card from earlier in the week.
But they’ve historically kept no foreign transaction fees as a limited, premium benefit.
I love my Starwood Preferred Guest Card from American Express, I’ve had it for about 13 years. But I won’t use it at any Starwood hotels outside the U.S. because even though I would earn double points, the foreign transaction fees negate that benefit. I pay for Starwood hotels with a Chase card instead.
It seems like American Express may slowly be expanding out their no foreign transaction fee offerings, though, as eliminates those fees effective May 1. They’ll also covert to chip cards as well, making them easier to use abroad and especially in Europe.
Other Cards to Consider
If you do not value points that are best for premium cabin international awards, if you tend to redeem your points for domestic travel, then I’d suggest the Barclaycard Arrival PlusTM World Elite MasterCard®. It earns an effective rebate of 2.2% towards travel (2 points per dollar on all spending, a 10% rebate when redeeming points for travel, and no foreign currency transaction fees).
The BankAmericard Travel Rewards® Card is probably the best no annual fee option.
If you aren’t going to get a strong travel rewards card like Chase Sapphire Preferred anyway, and you don’t travel internationally enough to make it worth doing so just for international use, then I’d recommend a no fee card like this one. It earns an effective rebate towards travel of up to 1.5% as well.
Meanwhile, the Citi Executive / AAdvantage World Elite MasterCard has no foreign transaction fees and also has a current offer of $100,000 bonus miles after $10,000 spend within 3 months. Its $450 annual fee is only worthwhile on an ongoing basis after year one if you would otherwise purchase American’s Admirals Club membership and/or you want to earn 10,000 elite qualifying miles for $40,000 spend.
For more on purchases outside the U.S., see Will Your Credit Card Work in Europe? What’s a “Chip” Card, and Do You Need a PIN. And note that the Chase Sapphire Preferred Card is now issued with an EMV chip.
(Note that cards in this post offer credit to me if you’re approved using my links. The opinions, analyses, and evaluations here are mine. The content is not provided or commissioned by American Express, by Chase, by Citibank, US Bank, Bank of America, Barclays or any other company. They have not reviewed, approved or endorsed what I have to say.)
- You can join the 30,000+ people who see these deals and analysis every day — sign up to receive posts by email (just one e-mail per day) or subscribe to the RSS feed. It’s free. You can also follow me on Twitter for the latest deals. Don’t miss out!