Avoiding Foreign Transaction Fees on Points and Miles Earning Credit Cards

March 28, 2011

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3 min read

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If you aren't already aware, many credit card issuers charge ridiculous foreign transaction fees on every purchase you make on your credit card outside of the USA. In fact, you may even be charged this fee from within the US if the merchant processing the charge is based outside of the States. These fees - which generally range from 1-3% of your total purchases, can cost you dearly and completely negate the value of any miles or points you earn.

For example, if you go to Paris and spend $3,000 on your US Airways Mastercard, you will have to pay an additional $90 (3%), just for allowing Barclays bank the pleasure of processing your transactions. Even though you'd earn 3,000 miles, you can actually buy them cheaper directly from usairways.com for 2.75 cents each (and US Airways runs a lot of promotions, like their current 100% bonus, that makes buying miles as cheap as 1.38 cents each).

Before you travel abroad, make sure you know if your card currently has a foreign transaction fee. You can simply call your card company (the best bet since card issuers have been changing these fees lately), or check out this chart from creditcards.com. Tip: if you are applying for a new credit card, always click the Terms & Conditions link before you submit your application. Foreign transaction fees will be listed under Fees -> Transaction fees table (usually the last fee listed).

Barclays US Airways Mastercard Foreign Transaction Fee

While foreign transaction fees are a rip-off, the good news is that there are points and mileage earning cards that don't have these fees. If you travel abroad extensively, it's critical you get one of those cards. Here are some of the top miles/point earning credit cards that don't have foreign transaction fees. FYI: I've also added "No foreign transaction fees" on the Top Deals page to highlight this particular perk. I'm hoping there comes a day when these fees are history!

Top fee-free cards and sign-up bonuses:

50,000 miles for Capital One Venture card. $95 annual fee. Waived for the first year.
60,000 points for Amex Platinum. $550 annual fee.
50,000 Avios for Chase British Airways Visa Signature Card. $95 annual fee.
$100 statement credit for Chase United MileagePlus Club Card. $375 annual fee.
2 Free nights for Chase Hyatt Credit Card. $75 annual fee.
60,000 points for Chase IHG Rewards Club Select Credit Card. $49 annual fee, waived for the first year.
50,000 points for Chase Sapphire Preferred. $95 annual fee, waived for the first year.
60,000 points for Citi ThankYou Premier. $95 annual fee, waived for the first year.
$95 Statement credit for Chase Continental Presidential Plus card. $395 annual fee.