MSN has partnered with The Points Guy for our coverage of credit card products. MSN and The Points Guy may receive a commission from card issuers.
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. Many credit cards charge a foreign transaction fee of around 3% 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’ll 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 foreign transaction fee added to your transaction.
What do you get in return for the foreign transaction fee? 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 many of their cards. If you don’t want to deal with these fees on your next international purchase, make sure to use a card without foreign transaction fees. Here are some of our favorite credit cards currently accepting sign-ups that don’t have any foreign transaction fees.
Best No Foreign Transaction Fee Credit Cards:
- Chase Sapphire Reserve
- Chase Sapphire Preferred Card
- Barclaycard Arrival Plus World Elite Mastercard
- Southwest Rapid Rewards Priority Credit Card
- Citi Premier Card
- The Platinum Card® from American Express
- Capital One Venture Rewards Credit Card
- Bank of America Premium Rewards credit card
- Chase Ink Business Preferred Credit Card
- Uber Visa
- Discover it® Miles
Major Credit Card Issuer Foreign Transaction Fees
Some issuers, including Capital One and Discover, don’t have foreign transaction fees on any cards. But most issuers charge foreign transactions fees on at least some of their cards. Before we discuss our favorite cards that don’t have any foreign transaction fees, here are the common foreign transaction fees charged by large credit card issuers. You cannot go wrong with these.
Chase Sapphire Reserve
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 Sapphire Preferred
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 60,000 bonus points after spending $4,000 on purchases in the first three months from account opening. That’s $750 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.
Barclaycard Arrival Plus World Elite Mastercard
Especially if some of your travel purchases are at smaller businesses like B&Bs, this card could be a great option. That’s because you can use miles to wipe any travel purchase from your statement, at a rate of 1 cent per mile. So if the types of travel you’re spending money on can’t be booked with points or miles, this card is a great tool in your arsenal. You’ll earn 2x miles on all spending, and you’ll get 5% of your miles back each time you redeem, so you’re effectively getting a 2.11% return on spending. This card’s currently offering a 70,000-mile sign-up bonus after you spend $5,000 in the first 90 days, so now’s a great time to apply. There’s an $89 annual fee that’s waived the first year.
Southwest Rapid Rewards Priority Credit Card
This is the newest (and most premium) of the three personal Southwest Rapid Rewards card, but it’s one of just two that waive foreign transaction fees. (The Southwest Rapid Rewards Premier Credit Card also waives these fees and has a lower $99 fee.) The Priority card has a $149 annual fee, and includes perks like a $75 annual Southwest credit, four upgraded boardings per year and 7,500 points every year after your card member anniversary. A great reason to sign up now is 40,000 point sign-up offer when you spend $1,000 in the first three months.
Citi Premier Card
The Citi Premier Card waives foreign transaction fees and earns you 3x points on travel, including most gas stations. This is another mid-range travel rewards card without foreign transaction fees that’s geared toward international travel. You’ll also earn 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.
The Platinum Card from American Express
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 10% return based on TPG’s valuations. Benefits include an up to $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 Venture Rewards Credit Card
Capital One doesn’t charge foreign transaction fees on any of its cards. The Venture Rewards Card currently offers new applicants 50,000 bonus miles — worth $700 based on TPG’s latest valuations — after they spend $3,000 within three months of account opening. You’ll also earn 2x miles on all purchases, although there’s one exception to the 2x earning: You’ll earn 10x miles when you use the Venture Rewards to book and pay for hotels at Hotels.com using a special link. The Venture Rewards Card has historically offered fixed-value miles that you can redeem for 1 cent apiece to offset travel purchases, but an exciting update is adding airline transfer partners to the picture — a significant enhancement to this already-valuable card. There’s a $95 annual fee for this card that’s waived the first year.
Bank of America Premium Rewards credit card
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.
Chase Ink Business Preferred Credit 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.
Discover it Miles
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.
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Source: Read Full Article