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Photo by Andres Rueda

A couple surprise 3% foreign transaction fees on my credit card bill prompted this article.

Having relocated within the last year to Europe, my check list of relocation to-dos is finally getting shorter. However, closing bank accounts and switching credit cards remained low on said list; way behind trying to join the 0.0005% of Swedish speakers in the world and mentally wrapping my head around upcoming decades of dark dreary winters.

So buying groceries at my local food store meant nonchalantly wiping out my US-issued Chase credit card for every purchase without dutifully monitoring my bills. It wasn’t until months later I realized buying a bag of tomatoes meant paying 3% in foreign transaction and exchange rate fees after noticing a couple “suspect” charges on my bill.

Foreign Charges by Credit Card

My foreign charges should have come as no surprise if I’d read the fine print. According to this impressive chart below compiled by NerdWallet.com, my Chase card has one of the highest fees for purchases made overseas.

Source: NerdWallet.com

Notorious for “skipping the fine print” when selling you new cards, I decided to bypass the big name company PR reps and put out a call to the travel community to share their experiences – from cards that net them beaucoup air mileage and hotel rewards to cards that cover travel insurance and – yes! – have no foreign transaction charges.

According to Tim Leffel, travel writer and author of Make Your Travel Dollars Worth a Fortune, there’s really only one right answer to this: Capital One. “…or a local credit union card because everyone else charges you at least 2%, most of them 3%.”

In addition to the popular Capital One cards, we’ve actually found more rival cards and here’s our verdict based on your feedback.

Overall Travel

Capital One No Hassle Rewards

Capital One offers the best credit cards for making purchases overseas because they don’t charge any additional foreign transaction fees. It’s always a good idea to call your credit card company and give them your itinerary before you jet off to a vacation destination. That way, your account won’t get frozen due to fraud detection alerts when you make credit card charges in unusual locations…Laura D. Adams, “Money Girl“.

The Capital One Venture Rewards card in particular has no foreign transaction fees, no annual fee the first year, earns you 2 miles for every $1 spent, earns you 10,000 bonus miles for spending $1,000 in the first 3 months, and miles can be redeemed at 1% toward all travel expenses, no matter where you book them. As with all promotional “no annual fee” cards, you need to start paying $59 per year after the first introductory year…NerdWallet.com

HSBC Premier Credit Card

The HSBC Premier Credit Card charges no international fees of any kind and no currency conversion fees, plus no ATM fees are charged when outside of New York…Alex Moazed

American Express PenFed Premium Travel Rewards

This card comes with no foreign transaction fee, no annual fee the first year, 5 points for every $1 spent on airfare, 3 points for every $1 spent on hotels and dining, access to 600+ luxury VIP global airport lounges after spending $15,000 / yr, Redeem points for travel on any airlines, with no black-out dates

The only downsides are that you need to have exceptional credit standards and applicants must join the credit union by donating $20 to NMFA, volunteering for the Red Cross, or being a member of the military, plus you have to start paying the $50 annual fee after the first year…NerdWallet.com

Accrual System

American Express Starwood Preferred Guest

While you do have to pay a 2.7% foreign transaction fee for this plastic, you’re guaranteed no annual fee the first year ($45/year after that), one Starpoint per $1 spent, and 2 Starpoints per $1 spent at Starwood hotels. Starpoints can be worth up to 2.3%, higher redemption than any other card.

Starwood Amex card is about as good as it gets for accruing frequent flyer miles because you can transfer to almost every major carrier and you get a 25% bonus for each 20,000 pt. transfer. Great deal!”…Tyler Tervooren, Professor of Riskology

You can also earn up to 25,000 bonus points in your first year. A major plus is that points can be transferred to 30 major airlines with no black-out dates…NerdWallet.com

American Express Delta Reserve Card

I’m a professional comedian who travels all over the world – last year, I flew 200,000 miles. By far, the best card is the American Express Delta Reserve Card. Not only do you get a free companion ticket, you also get double miles every time you book with the card on Delta’s website, you also accrue Medallion Qualifying Miles towards elite status which you can keep yourself or gift to a friend.

In addition, it covers rental car damage (which I’ve already taken advantage of), it doubles the warranty on anything I buy (so I just got an iPad, I get a two-year warranty instead of one year), and if I drop it, or it gets stolen, or crushed or anything within the first 90 days, they’ll replace it. In addition, the card gives me admission to the Delta Sky Club. I absolutely love my credit card!…Dan Nainan, Comedian/Actor/Artist/”Computer Genius”

Other Travel Perks

Visa Cards

I have a Visa card that comes with collision/damage insurance when renting cars. And I used it to once in Oregon when someone broke into our rental car. They covered some things that went missing plus a replacement rental car that got us back into Canada…Carlo Alcos, Matador Trips

And the Worst Travel Credit Card?

I thought it was my Chase card, but not according to Jonathan Kraft below:

After travel to 20+ countries, I can tell you which one not to use…Frontier Airlines MasterCard.

We purchased plane tickets online through Delta.com but because our flights originated in Mexico (destination – US), they considered it a foreign transaction, and charged us foreign transaction fees twice for two tickets.

Maybe not helpful for your story, but if you do a “worst credit cards for travelers”, that one should be on the list.

Community Resources

NerdWallet.com helps you select the right credit card out of 600+ credit cards they’ve researched for your needs. Also check out the Credit Card Chaser for a list of travel credit cards suitable for you as well as a list of various exchange rate and foreign fees by card from Trans-Americas Journey.

This issue remains a hot topic as I also found out Maren Hogan of Travel Blog Exchange had the same question here.

So what credit card has served you well? Please share with us below.

 

 

About The Author

Lola (Akinmade) Åkerström

Lola (Akinmade) Åkerström is a MatadorU faculty member and Network contributor. Her work has appeared in National Geographic Traveler, Vogue, BBC, Fodors.com, and many more. Follow her photoblog at Sweden.se.

  • http://kristin5683.wordpress.com/ Kristin Conard

    This is incredibly helpful! I had to fight with my credit card company this summer while I was overseas – sometimes it would work, sometimes it wouldn’t – and then they randomly decided to upgrade my account – issuing a new card with a new card number that never got to me, nullifying the card I had with me. I spent $100 just in overseas phone calls, much less the stupidly high amounts of fees. Phew! That’s my vent! :) That was Citi Dividend Mastercard – beware!

    I’ll be switching to one of the ones here soon!

  • http://www.sophiesworld.net Sophie

    Also, have you noticed in some countries (e.g. Denmark), they add a fee to your bill when using any foreign credit (or debit) card? So, with the cards mentioned above, that would mean two fees – one to the shop and one to the credit card company. Could get expensive.

  • http://www.sweeneysays.com Nicole

    It’s funny how timely this article is. I just noticed a foreign transaction fee on my card. Am I in another country? No. I bought an Android app from a UK-based company. Since I’m hoping to head abroad for grad school next fall, I’m glad this article popped up while the subject was still fresh. (I have a BofA Visa…aka, the last card on that list. DEFINITELY something to ditch before I head overseas…)

  • http://www.hopeandjosh.com HKNunzio

    Useful info! My Wachovia card is charging me a whopping $8 for every ATM transaction here in Peru. Luckily, I use Banknorth as a backup (no ATM fees), but I was pretty shocked when I saw that charge on my statement…several times :(

  • http://www.matadortravel.com/traveler/ericaled Erica L.

    I love my Capital One card! I’ve taken it to almost 20 countries and have had no problems with it. They’ve even fixed their telephone service line so it’s super easy to report your upcoming travel destinations. I don’t work for Capital One, I swear.

  • Jabe

    Remember to not just check the foreign transaction fee percentage – check the exchange rate too. A poor exchange rate on a 0% foreign transaction fee card could make it no better than a 3% foreign transaction fee card with a good exchange rate.

    Also the definition of “foreign” is generally in terms of where you use the card rather than the currency of the transaction, so if you use your $ credit card in (say) Ecuador, whose currency is the $, you’ll still be charged a foreign transaction fee. Likewise for non-US vendors who are willing to accept (credit card) payment in $.

  • http://www.wanderlass.com Lilliane

    This is a curious read because I’ve never heard of foreign transaction fees in any of the credit cards issued in the Philippines. Visa & Master are 2 partners of most local banks.

  • http://velcro108.blogspot.com/ Chris

    I’ve been hit with 3% charges on both my Citi and Chase cards. My Discover card only charges 2%, but it isn’t taken everywhere. There is so much credit card/perks info out there, it’s great to see it summed up so simply here.

    I’ve resorted to using my bank’s Visa check card. My bank doesn’t charge any fees with it, but I believe the Visa fee is 2%.

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