If you often travel internationally, you probably know that many credit cards hit you with a fee every time you swipe your card in a foreign country. Part of this fee is for the transaction itself (both Visa and MasterCard charge 1% of the purchase price for all transactions made in a foreign currency); however, many credit card issuers add 2%-3% more to that basic processing charge. If you are using your card regularly when you travel, these little fees can add up.
Luckily, some travel-centered credit cards don’t charge any fees for transactions made in foreign countries or in other currencies. The downside: most of these cards come with an annual fee.
The Chase Sapphire Preferred card is ideal for international travel. It does not charge users anything if they use their card outside of their home country. In addition, the annual fees are quite low and the are waived for the first year. The Sapphire Preferred carries a $95 annual fee. Discover Card has a similar policy. However, because it does not use the Visa or MasterCard networks to process transactions, it is difficult to find businesses outside the US that accept Discover.
The American Express Platinum Card is the card that every serious traveler wants to have in their wallet. Its $450 annual fee is a bit steep, but its perks are valued at more than $450, so serious miles-collectors and upgrade-seekers will find themselves making a profit by the time the year is over. The card has no foreign transaction fees and also offers access to a global concierge service. Of course, other American Express cards are known for their extra perks, etc, but the majority have a 2% foreign transaction fee, making them a little less attractive than the Platinum when it comes to serious international travel.
The Citi AAdvantage Card also carries a $450 annual fee. However, it has many of the perks that the AmEx Platinum does, plus a few extras for people who regularly fly American Airlines. AA fliers get access to the airline’s first class lounges and concierge service. There is no transaction fee for purchases made outside of the country.
Another no-foreign-transaction-fee Citi offering is the Citi Thank You Premium Rewards Card. Like most other cards that waive foreign transaction fees, the ThankYou has an annual fee. It is regularly $125 per year, but this charge is waived for the first year. However, users get a free annual companion airline ticket and also don’t have to worry about points caps and points expiration dates.
There are other reasons to find a foreign-friendly credit card if you travel abroad. Every credit card will handle the exchange from a foreign currency to your currency, but it can be difficult to find out what exchange rate they are giving. Most companies simply put the charge on your statement in your own currency. Foreign-friendly cards will generally put the price of the charge in both currencies or at least let you know what exchange rate they are using to figure the price.
If you are getting cash from an ATM abroad, be aware that even if the bank or credit card company may be giving you a good interest rate on the money, they may be charging you extra fees for using out of network/out of country ATMs. You have to read the fine print or even call your credit card company to ask them about these extra fees.
Some foreign businesses may ask if you want to figure your charge in dollars instead of local currency. This is generally not a good idea since the business then has control of the rate of exchange and this “service” could actually end up costing you more than any currency conversion fees.