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Top Credit Cards with No Foreign Transaction Fees

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The sign-up offer for the Chase Sapphire Preferred card has been increased from 40,000 to 50,000 points after $4,000 spent within the first three months. You can earn an additional 5,000 points when you add an authorized user and make a purchase within the first 3 months as well.

Update: Some offers mentioned below are no longer available. View the current offers here –Barclaycard Arrival Plus World Elite MasterCard, Ritz-Carlton Rewards Visa, Citi ThankYou Premier, The Platinum Card from American Express, The Enhanced Business Platinum Card from American Express OPEN

It’s easy to focus on the big ticket aspects of award travel, like a first-class redemption or a suite upgrade. However, it’s often the little things that dictate just how far your points, miles, and dollars will take you. Today, new Tokyo-based TPG Contributor Richard Kerr looks at how to avoid one common (and nefarious) charge when you travel internationally.

International travel is supposed to be adventurous, and your average trip abroad will be full of surprises. The majority of them will be fun and exhilarating, but there are some less desirable (and entirely avoidable) surprises that could hurt your travel budget: credit card foreign transaction fees. Knowing how forex fees work—and getting a credit card that doesn’t charge them—will help you minimize costs and maximize your travels. In this post, I’ll explain what foreign transaction fees are and when you should watch out for them, and offer my picks for the best credit cards that waive these extra charges.

Use a card with no foreign transaction fees when you travel abroad. Phoro courtesy of Shutterstock.

Forex fees are extra charges of about 1-3% that get tacked on to transactions processed in foreign currencies. Basically, credit card networks charge the issuing bank a 1% fee for running a transaction in a foreign currency, and your card issuer then kindly passes that charge along to you (with a tidy markup). Forex fees apply to transactions processed in foreign currencies, not just those processed in a foreign country. Buying a Japan Airlines ticket (on jal.co.jp) from your desk in Cleveland will incur a foreign transaction fee, whereas buying an e-book from the Amazon US website while you’re vacationing in Tahiti won’t.

Another “gotcha!” charge akin to forex fees is dynamic currency conversion, which enables you to pay foreign merchants in the currency of your choice. Many hotels (like Hyatts in Asia) have a touchscreen at the checkout counter for you to select your preference. You might think the obvious choice is to pay in your native currency, but that’s not the case. The exchange rates used in dynamic currency conversion are up to 10% worse than the market rate, and you could still be charged forex fees on top of that! Always select the local currency and use your credit card company’s market rate.

Just what is that market rate? I called customer service for my own cards, and compared the rates of several major banks to the mid-market exchange rate—that is, the mid-point between the buy and sell rates on the global currency markets. A fair warning, my confidence in the answers I received varies wildly. Chase and AMEX agents immediately knew the answer and told me how to find their daily rate in the future. Other bank’s agents did not know the difference between currency exchange rates and foreign transaction fees. I have listed applicable quotes from some of the agents I spoke with alongside the rates as illustration. Here are the rates as of January 30, 2015 after the market has closed for Japanese Yen to US Dollars:

  • Mid-market rate: 117.54
  • Chase: 118.46
  • Barclaycard: 117.55—”We use Yahoo.”
  • AMEX: 117.80
  • US Bank: Four different agents unable to tell me
  • USAA: Very polite agents, but four different calls yielded no results
  • Citi: 117.53—”We use the Wall Street Journal Rate”
  • Capital One: 117.28

This actually matches my experience and expectations. I’ve always found living overseas that Chase’s exchange rates, have been the most favorable. I’ve also found the rate at USAA (which I use for everyday banking) to be favorable, even if the agents couldn’t tell me what that rate was.

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It’s a great time to be traveling abroad! Picture courtesy of Shutterstock.

Overall, it’s a great time to be traveling abroad. The US dollar is strong—the Yen has plummeted 20% against the dollar since I arrived in Japan in 2013, and it’s like having a discount coupon everywhere I go. Cuba is becoming more accessible, and great flight deals are popping up faster than a Whack-a-mole. There’s no reason to add a silly 3% to all of your expenses when it’s so easy to avoid.

Fortunately, I believe credit card companies are listening to their customers, as every year there are more cards available that don’t charge forex fees. In addition, more US cards are adding EMV technology, which offers better security encryption and is now a necessity in many parts of the world. Using my above research, and considering TPG’s monthly valuations of points and miles, international travel perks, and other listed card benefits, here is my list of the best cards you should use to avoid foreign transaction fees:

Top Travel Cards That Don’t Charge Foreign Transaction Fees

  1. Chase Sapphire Preferred
  2. Chase Ink Plus
  3. British Airways Visa Signature Card
  4. Platinum Card from American Express
  5. The Enhanced Business Platinum Card from American Express OPEN
  6. The Hyatt Credit Card
  7. Barclaycard Arrival Plus World Elite MasterCard
  8. Ritz-Carlton Rewards Visa
  9. Citi ThankYou Premier

1. Chase Sapphire Preferred
Current Bonus: 40,000 points
when you spend $4,000 on purchases in the first 3 months.
Benefits: This card regularly makes TPG’s list of the top travel credit cards thanks to compelling benefits like earning 2x points on travel and dining, primary auto rental insurance, and the ability to transfer points to 11 transfer partners including British Airways, Southwest, United, Hyatt, and Marriott.
Annual Fee: $95, waived the first year.
Reasons to get it:  Chase recently made some changes to this card. The sign-up bonus spending requirement recently increased from $3,000 to $4,000, and Chase eliminated the 7% annual points dividend for new cardholders (and eventually for current cardholders). On the positive side, the card’s trip cancellation coverage was bumped up to $10,000, and the Sapphire Preferred now offers primary rental car insurance instead of just secondary coverage.

For more information, see these posts:

The Chase Ink Plus makes the list again thanks to great ongoing benefits.
The Chase Ink Plus earns 5x points at office supply stores.

2. Chase Ink Plus
Current Bonus: 60,000 points after spending $5,000 in 3 months.
Benefits: Earn 5 points per dollar at office supply stores, cell phone, land line, internet, and cable TV services (on up to $50,000 in spending annually), and 2 points per dollar spent at gas stations and on hotel accommodations (again, on up to $50,000 in spending annually).
Annual Fee: $95.
Reasons to get it: This business card comes loaded with benefits, including 5x and 2x category spending bonuses, and the ability to earn points that you can transfer to any of Chase’s 11 travel partners. In TPG’s most recent monthly valuations, Ultimate Rewards points are valued at 2.1 cents apiece, which means the sign-up bonus is worth $1,050 in award travel.

For more information, see these posts:

The British Airways Visa currently waives the annual fee for the first year.

3. British Airways Visa Signature Card

Current Bonus: 50,000 Avios after spending $3,000 in the first 3 months.
Benefits: Spend $30,000 in a calendar year and receive a Travel Together Ticket good for two years. Earn 2.5 Avios for every $1 spent on British Airways purchases, and 1.25 Avios for every $1 spent elsewhere. 10% off British Airways ticket purchases with CARDOFFERU cardholder code, now extended through 2015.
Annual Fee: $95
Reasons to get it: The main reason this card is high on the list at the moment is that the $95 annual fee is waived for the first year, which usually isn’t the case. It also has some great perks like the 10% discount on BA fares (now good through 2015), the ability to spend your way to a companion ticket, and an everyday earning rate of 1.25 Avios per dollar.

For more information, see these posts:

American Express Platinum 100,000 sign-up bonus through CardMatch
*Offer seen Feb 3, 2015. Check CardMatch to see if you’re eligible for the 100,000 point offer!

4.  Platinum Card from American Express Targeted offer available through the CardMatch tool.

Current Bonus: 100,000 points when you spend $3,000 in the first 3 months.
Benefits: This card also comes with an array of valuable benefits, including a $200 annual airline rebate, access to Delta and Priority Pass lounges (as well as the Amex Centurion Lounges), and a Global Entry or TSA PreCheck application rebate (see posts below for more info).
Annual Fee: $450
Reasons to get it: Though the annual fee on this card is among the highest on the market, it has several valuable perks that you can learn more about in the posts I’ve linked to below. If you can maximize benefits like the $200 annual airline rebate, lounge access, Fine Hotels & Resorts perks and credits, and Global Entry or TSA PreCheck fee refunds, you’ll come out way ahead. As of January 5, 2014, some folks have reported getting targeted 100,000 point sign-up bonus offers for this card through the CardMatch Tool, so be sure to check there.

For more information, check out these posts:

Killing time is a joy at the Dallas Centurion lounge.. enoying a micro brew after my spa treatment on my last visit in December
The Business Platinum Card from American Express includes access to four U.S. Centurion Lounges (and counting).

5. Amex Business Platinum

Current Bonus: 40,000 points when you spend $5,000 in the first 3 months.
Benefits: Includes all of the same benefits as the above Platinum card, with the addition of American Express OPEN savings.
Annual Fee: $450
Reasons to get it: There are also 100,000 point offers floating around for this card; if you get one of those, you should definitely take it. According to TPG’s valuations, even the 40,000 point sign-up bonus is worth $760, which more than covers the annual fee.

I was surprised to see no award availability at the Park Hyatt in Paris for my desired travel dates
The Chase Hyatt Visa gets you two free nights at any Hyatt property, including top tier hotels like the Park Hyatt Paris Vendome.

6. Chase Hyatt Visa

Current Bonus: 2 Free nights at any Hyatt Property worldwide after spending $2,000 in the first 3 months.
Benefits: Earn 3 Gold Passport points per dollar spent at Hyatt, 2 points per dollar spent at restaurants, on airline tickets bought directly from the airline, and at rental car agencies. Get a free night at category 1-4 properties on your account anniversary. Earn 2 stays and 5 nights toward Diamond status when you spend $20,000 in a calendar year on the card, or an additional 3 stay credits and 5 night credits if you spend $40,000 per calendar year. The card includes EMV Chip and Signature technology.
Annual Fee: $75
Reasons to get it: Chase recently upgraded the features of this card in October of last year. You get Hyatt Gold Passport Platinum elite status as soon as you have the card. Two free nights without category restrictions at any Hyatt property can be an incredible deal when looking at top tier Hyatt properties, this card offers excellent value for a relatively low minimum spending requirement.

The Arrival Plus is one of the top all-round travel credit cards out there.
The Arrival Plus is one of the top all around travel credit cards out there.

 

7. Barclaycard Arrival Plus World Elite MasterCard
Current Bonus: 40,000 miles after spending $3,000 in 90 days.
Benefits: Earn 2 miles per dollar spent on all purchases, and receive 5% of your miles back when you redeem for a wide range of travel expenses. Chip and Pin technology.
Annual Fee: $89, waived the first year
Reasons to get it: The sign-up bonus alone is worth approximately $440 in travel statement credits, and if you’re stocked with cards from other major issuers like Amex or Chase, this is a good option. The versatility of its miles is excellent, since you can redeem them for non-traditional travel rewards like train tickets and tourist attractions.

For more information, check out these posts:

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The Ritz-Carlton Rewards Visa gives you automatic Gold status for the first year.

8. The Ritz-Carlton Rewards Visa

Current Bonus: 140,000 points when you spend $3,000 in the first 3 months.
Benefits: Earn 5x points per $1 at Ritz-Carlton and Marriott properties; 2x points per $1 on airfare, car rentals and dining; and 1 point per $1 on other purchases. No foreign transaction fees. 10% annual points dividend on all points earned. Three annual Club Level upgrades on stays of up to 7 days. $100 credit for incidentals on paid Ritz-Carlton stays of 2 days or more. Automatic Gold status for the first account year, and every year thereafter that you spend at least $10,000 on purchases. Upgrade to Platinum elite status when you spend $75,000 or more in a cardmember year. $300 annual fee rebates for airline incidentals and Global Entry application. Membership in Lounge Club.
Annual Fee: $395
Reasons to get it: With a sign-up bonus of 140,000 points along with the other benefits this card offers, now is a great time to get this card. Those 140,000 points are enough for two nights in a top-tier Category 5 property like Bachelor Gulch or Hong Kong, or almost 5 nights in a Tier 2 property like Rancho Mirage, Berlin or Shanghai. If you stay at Ritz-Carlton properties a lot, that $100 stay credit is useful and Club Level upgrades can be extremely valuable, while automatic Gold status (or even spending $10,000 a year for it) confers even more valuable perks like 25% bonus points, complimentary room upgrades, and free premium internet during stays.

The $300 annual airline/travel fee rebate can also wipe out much of that $395 annual fee, and Lounge Club access comes in handy for frequent travelers. All in all, if Ritz is your chain, or if you’re looking for a new luxury hotel chain to patronize, this offer is the best out there. Read a full card review here.

The ThankYou Premier has gotten a lot more compelling lately.
ThankYou Rewards continues to add new transfer partners, making each point more useful.

9. Citi ThankYou Premier
Current Bonus: 50,000 ThankYou points when you spend $3,000 in the first 3 months.
Benefits: Rotating bonus spend categories (through 4/18/2015, earn 3 ThankYou Points for every dollar spent on dining at restaurants and entertainment, and 2 points per dollar on airfare and hotels). Earn 1 point per dollar on all other purchases. Citi ThankYou also now has 11 transfer partners including Virgin Atlantic, Air France/KLM Flying Blue, Cathay Pacific Asia Miles, Singapore Airlines Krisflyer, and Hilton HHonors. This card also features EMV chip technology and Citi Price Rewind.
Annual Fee: $125, waived the first year.
Reasons to get it: Citi made a ton of improvements to the ThankYou program in general last year, and the trend appears to be continuing, so there are plenty of reasons to consider the Citi ThankYou Premier, including the current sign-up bonus and the category spending bonuses on dining, entertainment, airfare, and hotels.

British Airways Visa Signature® Card

Apply Now
  • 50,000 bonus Avios after you spend $3,000 on purchases within the first 3 months of account opening.
  • Every calendar year you make $30,000 in purchases on your British Airways Visa card, you'll earn a Travel Together Ticket good for two years.
  • In addition to the bonus Avios, you will also get 3 Avios for every $1 spent on British Airways purchases and 1 Avios for every $1 spent on all other purchases.
  • Pay no foreign transaction fees when you travel abroad.
  • Chip Technology allows you to use your card for chip based purchases in Europe & beyond, while still giving you the ability to use your card as you do today at home.
Intro APR Regular APR Annual Fee Foreign Transaction Fee Credit Rating
N/A 16.24%-23.24% Variable $95 0% Excellent Credit