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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.
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.
Best No Foreign Transaction Fee Credit Cards:
- Chase Sapphire Reserve
- Chase Sapphire Preferred Card
- Starwood Preferred Guest® American Express Luxury Card
- 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
Major Credit Card Issuer Foreign Transaction Fees
Here are the common foreign transaction fees that are charged by large credit card issuers. Some issuers waive the fee on certain cards and we have listed these cards above. Also, Barclaycard does not have a foreign transaction fee for any of its cards.
|Bank of America||3%|
|U.S. Bank||3% (2% for U.S. Dollar Transactions)|
Individual Assessments: Full Details
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 (excluding $300 travel credit), 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.
Believe it or not, Amex used to impose foreign transaction fees on the Starwood Preferred Guest® Credit Card from American Express and the Starwood Preferred Guest® Business Credit Card from American Express, but it rectified this situation back in 2015, long before the SPG Luxury Amex Card came along (also without foreign transaction fees).
Now that the Marriott-Starwood merger has been completed, this card earns points in the new Marriott program. The Luxury Card currently comes with a 100,000-point welcome bonus after you spend $5,000 in the first three months (available until Oct. 31, 2018), and it earns you 6x points on Marriott and SPG purchases; 3x points at US restaurants and on flights purchased directly from the airlines; and 2x points on everything else — unfortunately a 33% devaluation from the SPG Amex cards’ earning scheme pre-merger. The SPG Luxury Card offers up to $300 in statement credits each year for SPG and Marriott purchases, a free night award for stays that cost up to 50,000 points every year after your account anniversary, complimentary Gold elite status and more. There’s a $450 annual fee.
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 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.
Major Credit Card Issuer Foreign Transaction Fees
|Bank of America||3%|
|U.S. Bank||3% (2% for U.S. Dollar Transactions)|
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|
|Starwood Preferred Guest American Express Luxury Card||Hotel Benefits||100,000 points||Spend $5,000 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.
This card from Bank of America gets really interesting if you have a BofA checking, savings or investment account. Depending on the value of your combined accounts you can potentially get as much as 3.5x on travel/dining and 2.625x on other purchases making it the richest consumer banking bonus out there.
- Receive 50,000 bonus points- a $500 value – after you make at least $3,000 in purchases in the first 90 days of account opening.
- Earn unlimited 2 points for every $1 spent on travel and dining purchases and unlimited 1.5 points per $1 spent on all other purchases
- If you're a Bank of America Preferred Rewards client, you can get a 25%-75% rewards bonus on every purchase.
- No limit to the points you can earn and your points don't expire
- Flexibility to redeem for a statement credit, deposit into eligible Bank of America® or Merrill Lynch® accounts like checking, savings, and 529, for gift cards or use at the Bank of America Travel Center.
- Get up to $200 in combined airline incidental and airport expedited screening statement credits + valuable travel insurance protections
- No Foreign Transaction Fees
- Low $95 annual fee