No Foreign Exchange (Forex) Fee Credit Cards

No Foreign Exchange Fee Credit Cards

Travelers to foreign countries have sometimes been surprised to find they were charged foreign exchange fees when they used their credit cards overseas. Processing a purchase outside the United States normally carries a fee of about three percent, but using a no international fee credit card will help you avoid that extra fee and save money. Credit cards are convenient to use and make it possible to travel with a minimum of cash. However, if you must pay an additional one to three percent in fees every time you make a purchase abroad, the convenience can be costly.

For example, if your travel expense for airfare is $800, adding a two percent fee makes it $816, and adding a three percent fee makes it $824. A hotel bill of $1000 turns out to be $1020 or $1030 with the extra fee. Taxi fares totaling $100 grow to be $102 or $103 with the added fee. Meals may cost $600, but adding the foreign exchange fee makes that total $612 or $618. Shopping expenses of $1000 total $1020 or $1030 when you add a two or three percent fee. Those fees add up, so get the best credit card deals you can before leaving home.

Credit Card Foreign Transaction Fees are Common

Over 90 percent of all credit cards charge a foreign transaction fee averaging slightly less than two and one-half percent. That is a good incentive to plan well before your trip, and get a credit card without a foreign transaction fee. Capital One was formerly the main issuer of no foreign exchange fee credit cards, but Chase, American Express, HSBC, Citi and a few other major companies have begun offering them as well.

Credit card companies are learning that waiving foreign transaction fees for their travel credit cards helps them remain competitive. If your credit card company does not waive those fees, you may want to look for one that does waive them before you take your next trip abroad. Business travelers that use corporate credit cards are finding even those cards are beginning to eliminate foreign exchange fees. The Capital One Spark and AmEx Business Platinum cards are two of the first to implement the new practice.

The Best Credit Card Featuring No Foreign Transaction Fees

No single card can be the best for everyone due to the variety of needs for different people. Shop for a card with the rewards that will benefit you the most, and submit an application. Your credit standing will determine your qualification for the best cards, so if you do not qualify for your first choice, keep applying until you have success. When you can save between two and three percent in foreign fees, it will be worth completing several applications. For foreign travel, it is best to have a MasterCard or Visa, because they enjoy greater acceptance in more locations than the other cards have.

The following information may help you find the best credit card for you.

Travel-friendly International Credit Cards

Capital One Venture Rewards

Capital One Venture Rewards does not impose foreign transaction fees. It also pays two percent on purchases in the form of statement credit on travel purchases. You get credit for travel miles when you pay for them with Capital One Venture Rewards. If you have 40,000 miles, a flight costing $400 is free. There are no blackout dates or restrictions, and you can redeem your miles for any travel expenses. The annual fee is $59, but the first year is free. If you spend $1,000 during the first three months, you will receive 10,000 bonus points.

Chase Sapphire Preferred

The Sapphire Preferred is a travel rewards credit card that also waives international fees. It is the best Chase card for international travelers. There is no charge for the card the first year, but after that, the annual fee is $95. However, travelers find the card's benefits more than make up for the fee. When you use this card, you earn two points for every dollar you spend on hotels, airfare, cruises, train tickets, rental cars, taxis and any kind of dining, from fast food to fine dining. In addition, every other purchase you charge to your card will earn one point. You will also receive an annual dividend of seven percent on all the new points you earn, even if you have already redeemed them. When you redeem your points by booking travel with Chase Ultimate Rewards, they are worth 20 percent more. You can also transfer your points at their full value to participating frequent traveler programs. Spending $3000 during the first three months will give you an extra 50,000 points equaling $625 in travel expenses.

American Express Platinum

The AmEx Platinum card has a $450 annual fee, but frequent travelers feel the excellent benefits make the card worth the fee. The card does not charge fees for foreign transactions. You receive a credit of $200 toward incidental expenses with your choice of airlines and free access to airport lounges with your Priority Pass. When you pay with points through American Express, your Membership Rewards Points are worth 20 percent more. You will also receive 25,000 extra points if you spend $1,000 in your first three months.

Current List of No Foreign Transaction Fee Credit Cards

We continually update the following list.

American Express

  • Platinum
  • Centurion

Citi

  • Thank You Premier
  • Thank You Prestige
  • Executive AAdvantage World Elite MasterCard

Chase

  • British Airways Card
  • Hyatt Card
  • Priority Club Rewards Signature
  • Palladium
  • Ritz Carlton Rewards Card ($395 annual fee)
  • Continental Presidential Plus
  • Sapphire Preferred
  • Marriott Rewards Premiere

Discover

  • Discover cards have no fee, but they have limited acceptance internationally.

First National Bank of Omaha

  • Graphite American Express

Pentagon Federal

  • All cards
  • Their Pentagon Federal Promise card offers balance transfers for two years at 4.99 percent interest.
  • The PenFed Premium Travel American Express card gives five points for each dollar spent on airfare along with Priority Pass access to 600 worldwide lounges if you spend $15,000.

Capital One

  • All cards
  • Their Venture Rewards cards give two points for every dollar spent on airfare.

Harvard World MasterCard

HSBC Premier

  • You may be required to have nearly $100,000 deposited at HSBC to qualify for their credit card.

Credit Unions

  • Most credit unions charge only the one percent that Visa charges them. Some do not impose any fee for foreign transactions. Following is a list of credit unions that do not charge foreign transaction fees. Many credit unions have restrictions regarding membership while others are open to anyone.

Aerospace Credit Union

  • Members must work on Los Angeles AFB or for Aerospace Corporation.

Apple Federal Credit Union

  • Apple is open to people associated with many of Northern Virginia’s school systems.

Associated Credit Union

  • Anyone can be an Associated Credit Union member.

Burbank Community Federal Credit Union

  • Members must be residents of Burbank, California.

CoastHills Federal Credit Union

  • Members must live in either San Luis Obispo or northern Santa Barbara County in California.

Cy-Fair Federal Credit Union

  • People living in parts of Houston, Texas, in the Cy-Fair ISD region are eligible for membership.

ESL Federal Credit Union

  • Members must be residents of upstate New York.

Elga Credit Union

  • Members must live in Livingston, Oakland, Shiawassee, Lapeer, Saginaw or Genessee County in Michigan.

Kirtland Federal Credit Union

  • Membership is open only to Arizona military affiliates on Kirtland AFB, in the Reserves or the NM National Guard.

Northop Grumman Federal Credit Union

  • Any contributor to the Southern California Historical Aircraft Foundation can be a member.

Pacific Oaks Federal Credit Union

  • Ventura County, California, residents can be members.

Reliant Credit Union

  • Membership is open to residents of Wayne, Ontario and Monroe Counties in New York.

Stanford Federal Credit Union

  • A $15 to $20 donation to either of two organizations qualifies anyone for membership.

Taylor Model Basin Federal Credit Union

  • Naval Surface Warfare Center employees can be members.

Texas Dow Employees Credit Union

  • Membership is open to anyone living in the metro Houston area.

Truliant Federal Credit Union

  • Residents of many regions of South Carolina and Virginia as well as near Greeneville, South Carolina, are eligible for membership.

Virginia Credit Union

  • People living in many areas of Virginia are eligible for membership.

Vystar Credit Union

  • Members must be Florida residents.

Credit Card Acceptance Outside the United States

Most places around the world that accept credit cards will accept MasterCard and Visa. Merchants in many places accept American Express, but cards in the MasterCard and Visa networks are more popular with them. However, only about one fourth of the areas that honor MasterCard and Visa accept Discover cards.

Your days of using the magnetic stripe credit cards in foreign countries may be limited. Many countries are favoring the chip and pin technology because of the better fraud protection it provides. The new cards have data on an embedded microchip, and users must input their Personal Identification Numbers matching the chip’s data to authorize transactions. Although your magnetic stripe cards will still work most of the time, they may not work in some vending machines or airport and train station automated kiosks. When using a credit or debit card in some countries, you may be required to prove your identity by showing your passport as well.

Tips for Foreign Travel

Cheapest Currency Conversion

Using a credit card for purchases is the cheapest way to convert currency when traveling in foreign countries. If you use a MasterCard or Visa network card with no foreign exchange fee, you can save as much as 7.9 percent by not converting to cash at local banks and as much as 14.7 percent by not using the services at airports. When you make purchases with a credit card, the conversion is free and simple because it is automatic.

Apply for a credit card with no foreign transaction fee well in advance of your trip. You can incur fees even when using credit cards at home, so make all purchases with your new card if a foreign merchant will process them.

Pack your credit card number and the card company’s toll-free number in a safe place, but do not keep them with your card. You will need those numbers to notify the company if you lose your credit card.

Inform your credit card company about the countries you plan to visit, so your card will work in those areas.

Do not accept merchants’ offers to change their prices to US Dollars. Simply using your no-fee credit card will save money for you.

You may need to keep your passport with you for identification when using your credit card in some countries.

Cash advances on credit cards are costly because of their fees and interest, so use an ATM or debit card instead when you need some cash. You may have to pay foreign transaction fees when you use them, so find the best deals on these cards before leaving home.

Do Your Homework Before You Go

Contact your credit card companies and your bank when you plan a trip abroad. Ask about ATM and debit card fees as well as foreign transaction fees. Your cardholder agreement will have these details, but there may have been some changes after it was printed. Banks must notify you about their fees, but most people do not read all the fine print, so the fees may seem hidden. It is best to call if you want to avoid finding expensive surprises on your bill when you return. When your current cards have fees, you may want to shop for cards that offer better deals.

No Foreign Exchange Fee Credit Cards Provide Valuable Savings

When you travel abroad, your trip will cost more than necessary if you plan to use a credit card with a fee for foreign exchange. Because of the added fee, you will typically pay an extra two to three percent for everything you purchase. Therefore, an average trip totaling $3500 will cost $3570 to $3605. Shopping for a no foreign exchange fee credit card in advance of your trip will be worthwhile if you like to save money.

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