How to Choose a Credit Card With No Foreign Transaction Fee

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If you ever leave the country, you will need a credit card that does not charge a foreign transaction fee. There are a lot of options, including some of cards that earn you rewards in the process.

When a credit card charges a foreign transaction fee, a percentage of every international purchase made will be added to the bill. For most cards the fee is around three percent. That might not sound like much, but it will add up.

For example, a $35 cab ride from the airport will typically incur a foreign transaction fee of about $1. Not that bad. More than likely, the spending will hundreds of dollars or more while on your trip. If you spend $600 on meals and local transportation, you’ll be billed an extra $18 just for having the wrong card.

If you put your hotel and car rental on that card too, you’re suddenly throwing away money to a credit card company for no reason. Spend just $2,000 and you’ll be throwing away an extra $60 just for the convenience of using your card in a foreign country.

There’s no reason to do that. There are a bunch of great travel rewards cards out there that don’t charge foreign transaction fees.

The best rewards cards are the ones that allow you to transfer your points to a variety of frequent flyer programs. That’s because they offer a the most flexibility and value.

The three big credit card rewards programs that offer flexibility are American Express Membership Rewards, Chase Ultimate Rewards and Citi ThankYou Rewards. These programs all offer cards that do not charge foreign transaction fees.

Best All-Around Rewards Cards With No Foreign Transaction Fee

There is nothing like the Chase Sapphire Preferred if you’re looking for a good general travel rewards card. This card is actually my all time favorite. Its standard welcome offer is a generous 50,000 Ultimate Rewards points, the annual fee is a reasonable $95 that’s waived for the first year. It has generous earning abilities with double points for travel and dining. It’s important to note that travel is generously defined to include almost everything from airfare and hotels to taxis and gas.

Chase Sapphire Preferred card

Chase Ultimate Rewards, which you have access to with this card, is an excellent program. Though it has the fewest airline transfer partners of the three big credit card rewards programs, its seven partners are all encompassing. They include two big U.S. carriers, United and Southwest. British Airways is excellent for short-haul redemptions. Singapore Airlines and Korea air for Asia. Other international carriers from Europe are Air France KLM and Virgin Atlantic.

With those partners, you’ll get access to all three of the major airline alliances: Star, oneworld and SkyTeam. With these partners, there is the ability to transfer and redeem your points for travel to anywhere in the word.

Sapphire’s runner-up is the also excellent American Express Premier Rewards Gold card. It may have a smaller welcome offers at 25,000 points and a higher annual fee at $195, but it also has few things going for it that the Sapphire does not.

American Express Premier Rewards Gold card

The card is part of a flexible program, American Express Membership Rewards. As part of that program, you can transfer your points to 17 different frequent flyer programs.In addition to getting access to British Airways, Singapore Airlines, Air France KLM and Virgin Atlantic, which also partner with Ultimate Rewards, you’ll be able to transfer points to five North American carriers: Delta, JetBlue, Virgin America, Air Canada and Aeromexico; luxury airlines Cathay Pacific, Etihad Airways and Emirates; European airlines Alitalia and Iberia; Japan’s ANA; Israel’s EL AL; and Hawaiian Airlines. You can earn triple points for all airfare and double points for gas, groceries and dining out. The Sapphire doesn’t offer a bonus for groceries, something most of us buy regularly.

Your other two options for personal cards that don’t incur foreign transaction fees and iffer smaller bonuses. The Citi ThankYou Premier offers 30,000 Citi thank you points. The Amex Gold card doesn’t come with a welcome offer.

While the ThankYou Premier card does have decent earning potential and a reasonable annual fee, the ThankYou Rewards program isn’t necessarily better than Chase’s Ultimate Rewards. Thank you rewards has more airline transfer partners, but a number of them are smaller international carriers that most people are unlikely to ever use. In fact, the only domestic carriers in its lineup are Virgin America and JetBlue. The transfer ratio for JetBlue is 1:2 .

Best Business Rewards Cards With No Foreign Transaction Fee

There are two business cards that don’t charge foreign transaction fees and allow you transfer your points directly to frequent flyer programs. You will have to be either a small business owner or an independent contractor to qualify. If you are, you have access to two excellent cards: Chase Ink Plus Business and Amex Business Gold Rewards. Both are great options, but Chase wins this round again.

Ink Plus has a much bigger welcome offer at 80,000 points, compared to the Business Gold Rewards’ 25,000 points. It also has a smaller annual fee of $95, though it’s not waived for the first year like the Amex card.

While an extra 55,000 points for a welcome offer is nothing to scoff at, the Chase card really shines because of its earning potential. It offers a remarkable 5x points for several categories of purchases that include some recurring bills: cell phones, land lines, internet, cable and office supplies. The card also get double points for gas and hotels.

The Business Gold Rewards card has decent earning potential, but nothing like Ink Plus. You get to choose one of five categories to earn triple points, and the remaining categories earn double. You can choose from airfare, advertising, gas shipping or computer equipment. These bonus earning categories probably won’t be as lucrative as Chase’s.

Which Card Is Best for You?

If you qualify for a business card, I’d look long and hard at the Chase Ink Plus with its high welcome offer and fantastic 5x earning potential. Chase Sapphire is also a great option with a welcome offer that is nearly as good and double points for all travel purchases, including commuting expenses and gas.

The Amex Premier Rewards Gold and Business Gold Rewards cards are worthy contenders, too. But their annual fees are nearly twice as much, and their welcome offers are about half as big.

David

David is the Author of Memoirs of Napoleon Streisand and the Founder of Wise Flys. He has been to 7 continents and loves to travel the world for cheap.