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Banks are in business to make money, and there’s nothing wrong with paying a reasonable fee in return for a valuable service. Of all the charges that can be imposed by a credit card, though, foreign transaction fees are the most egregious. Most banks charge a 3% foreign transaction fee (Amex has a 2.7% fee on many of its cards), and customers don’t get anything in return for it.
The Case Against Foreign Transaction Fees
These types of fees are added to any charge that’s merely processed outside of the United States. They aren’t foreign exchange fees, so you can get hit with these charges even when you make foreign purchases in US dollars. In fact, you don’t even have to leave the US to get hit with this fee; if you make an online purchase from a foreign company — such as an airline ticket from an airline without a US website — you could find an additional 3% fee added to your transaction.
What do you get in return for your 3%? Nothing. There are no additional costs associated with processing a transaction from Toronto than there are with one from Tennessee. There are no special data centers being maintained on Christmas Island or any other remote places you might travel to. I’ve been studying this issue for years, and the only conclusion that I’ve been able to reach is that banks simply charge these fees because they can get away with it. In fact, you’ll find that major credit card issuers will also charge these fees to their foreign customers who make purchases in the United States.
Thankfully, an increasing number of credit card users are aware of this useless fee, and banks have responded by dropping the charge on more of their cards. If you don’t want to deal with these fees on your next international purchase, use one of our top foreign-transaction-fee-free picks for 2017.
Best No Foreign Transaction Fee Credit Cards:
- Chase Sapphire Reserve
- Chase Sapphire Preferred
- Citi ThankYou Premier Card
- Starwood Preferred Guest® Credit Card from American Express
- The Platinum Card® from American Express
- Capital One Venture Rewards Credit Card
- Bank of America Premium Rewards Credit Card
- Wyndham Rewards Visa Signature Card
- Chase Ink Business Preferred Credit Card
- Uber Visa
- Discover it® Miles
This premium travel rewards card became hugely popular when it was released in 2016, and there’s no way that its customers would have tolerated paying a foreign transaction fee. With this card, you earn 3x points on all travel spending, including airfare, hotels, car rentals and many other expenses. You also get 3x points on all dining purchases, and one 1 per dollar spent everywhere else.
Chase’s Ultimate Rewards points are most valuable when transferred to nine airline and four hotel programs and used for international travel. Alternatively, points can be worth 1.5 cents each toward travel and activities booked through Chase’s Ultimate Rewards Travel Center, which is often a better value than you might realize.
Other benefits include an annual $300 travel statement credit, a $100 Global Entry application fee credit and a Priority Pass Select membership that includes guests. There’s a $450 annual fee for this card.
Chase’s Sapphire Preferred card has always been one of the top options for international travelers, as it’s never had a foreign transaction fee. This card is currently offering 50,000 bonus points after spending $4,000 on purchases in the first three months from account opening. That’s $625 in travel when you redeem through Chase Ultimate Rewards. It features 2x points on all travel and dining purchases and 1 point per dollar spent elsewhere. There’s a $95 annual fee for this card that’s waived the first year.
The Citi ThankYou Premier Card waives foreign transaction fees and earns you 3x points on travel. This is another mid-range travel rewards card without foreign transaction fees that’s geared toward international travel. It features 3x points for all travel including gas, 2x points at restaurants and on entertainment and 1 point per dollar spent elsewhere. You can transfer Citi ThankYou points to 15 different programs or redeem them for 1.25 cents each toward airfare booked through Citi’s ThankYou Rewards Travel Center. This card is currently offering 50,000 ThankYou points after you spend $4,000 in the first 3 months of account opening. There’s a $95 annual fee for this card that’s waived for the first 12 months.
For years, this was the best travel rewards card to use at home for non-bonus spending, but it was terrible for international use due to its 2.7% foreign transaction fee. But in 2015, American Express finally removed this fee, and added some new benefits including Boingo Wi-Fi and complimentary premium in-room internet access.
And in 2016, Marriott acquired Starwood, allowing you to link your program accounts and transfer 1 Starpoint to 3 Marriott Rewards points. Currently, this card comes with a $100 statement credit after you spend $1,000 in purchases in the first three months. Plus, an additional $100 statement credit after your first purchase at participating SPG or Marriott Rewards hotels in the first six months. There’s a $95 annual fee for this card that’s waived the first year.
Not only does this card have no foreign transaction fees, but Amex also added a bonus category that makes it ideal for international airfare purchases. You’ll get 5x Membership Rewards points for all tickets purchased directly from the airline, equal to a 9.5% return based on TPG’s valuations. Benefits include a $200 annual airline fee credit, a $100 Global Entry fee credit and access to Delta Sky Clubs, Amex Centurion and Priority Pass Select lounges. You also get Gold status with Hilton Honors and Starwood Preferred Guest (and therefore Marriott Rewards). There’s a $550 annual fee for this card.
Capital One is the rare card issuer that doesn’t charge foreign transaction fees on any of its cards. The Venture Rewards Card currently offers new applicants 50,000 bonus miles — worth $500 — after they spend $3,000 within three months of account opening. You also earn 2x miles on all purchases, and miles are worth 1 cent each as statement credits toward any travel purchase including airfare, hotels, car rentals and cruises. There’s a $95 annual fee for this card that’s waived the first year.
This card from Bank of America offers you plenty of perks, for a reasonable annual fee. You start off with 50,000 bonus points after spending $3,000 within 90 days of account opening, worth $500. You also earn 2x points on travel and dining, and a strong 1.5x points on all other purchases. Bank of America points can be redeemed for gift cards, cash back as a statement credit or travel reservations. Also, Bank of America Preferred Rewards clients receive a 25% – 75% rewards bonus on every purchase.
This card offers a $100 annual airline incidental statement credit and up to a $100 credit toward the TSA PreCheck or Global Entry application fee, every four years. There’s a $95 annual fee for this card.
Wyndham Rewards Visa Signature Card
In 2016 Barclays announced that it was finally dropping the foreign transaction fees on this card, which is currently offering an opportunity to earn 15,000 bonus points after your first purchase, and another 15,000 points after you spend $1,000 on new purchases within 90 days of account opening. With the Wyndham Rewards program, you only spend 15,000 points per night for an award stay at any property, meaning you get two nights from this sign-up bonus alone.
This card also offers 5x points on all Wyndham hotel stays, 2x points for all gas, utility and grocery store purchases and 1 point per dollar spent elsewhere. You also receive Platinum status in the Wyndham Rewards program, and 6,000 bonus points each year on your account anniversary. There’s a $75 annual fee for this card.
Chase introduced its Ink Business Preferred card in 2016, replacing the Ink Plus Business Card, which is no longer offered to new applicants. The Ink Business Preferred features 3x points on all travel purchases, as well as on shipping purchases, internet, cable and phone services, and on advertising purchases made with social media sites and search engines — but keep in mind that the 3x earning rate is limited to the first $150,000 spent per account year in combined purchases across these categories. You’ll earn 1 point per dollar on all other purchases. New applicants earn an 80,000-point bonus after spending $5,000 on their card within three months of account opening. There’s a $95 annual fee for this card.
This card offers you 4% back on restaurants, takeout and bars, including UberEats, and 3% back on airfare, hotel and vacation home rentals. You can also earn 2% back on online purchases including Uber, online shopping, video and music streaming services (certain online purchases are excluded, including third-party payment services) and 1% back on all other purchases. Plus, this is one of the few no annual fee cards that also has no foreign transaction fees.
There’s a $100 sign-up bonus after spending $500 on new purchases within 90 days of account opening. And each year you use your card to spend more than $5,000 in purchases, you’ll get a $50 statement credit automatically applied to online subscription services like Netflix and Hulu.
This card has no annual fee as well as no foreign transaction fees, and it earns you 1.5x miles on every purchase you make. Discover will match the miles you’ve earned at the end of your first year, meaning if you earned 50,000 miles, you’d end up with a total of 100,000 at the end of your first year. You can redeem miles at a rate of 1 cent apiece for travel such as airlines and hotels, with redemptions applied as a statement credit.
Best Credit Cards with No Foreign Transaction Fee
|Card||Best for||Current Bonus||Bonus Requirement|
|Chase Sapphire Reserve||Elite Travel Benefits, like lounge access||50,000 points||Spend $4,000 on purchases in the first 3 months|
|Chase Sapphire Preferred||Overall Travel Rewards||50,000 points||Spend $4,000 on purchases in the first 3 months|
|Citi ThankYou Premier Card||Airfare||50,000 points||Spend $4,000 on purchases in the first 3 months|
|Starwood Preferred Guest Credit Card from American Express||Hotel Room Benefits||25,000 points||Spend $3,000 on purchases in the first 3 months|
|Platinum Card from American Express||International Airfare purchases||60,000 points||Spend $5,000 on purchases in the first 3 months|
|Capital One Venture Rewards Credit Card||Hotels||50,000 miles||Spend $3,000 on purchases in the first 3 months|
|Bank of America Premium Rewards Credit Card||Signup Bonus||50,000 points||Spend $3,000 on purchases in the first 90 days|
|Wyndham Rewards Visa Signature Card||Gas and Groceries||30,000 points||15K points after first purchase; 15K points after you spend $1,000 in first 90 days|
|Chase Ink Business Preferred Credit Card||Shipping Purchases||80,000 points||Spend $5,000 on purchases in the first 3 months|
|Uber Visa||Restaurants and Bars||$100||Spend $500 on purchases in the first 3 months|
|Discover it Miles||Flat 1.5% return on all spending||N/A||N/A|
Featured image courtesy of Kathleen Finlay via Getty Images.
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel.
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards