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Bankrate’s guide to no foreign transaction fee cards
Bankrate research helps you find the credit cards that best fit your needs, but that’s not all. In addition to analyzing the best cards with no foreign transaction fees, we also dig deep into the subject of international travel to reveal information that you can put to use on your next trip — and every trip.
Comparison of best no foreign transaction fee credit cards
What are foreign transaction fees?
When you use a credit card overseas to buy something in the local currency, your credit card issuer has to convert the money you’ve spent into U.S. dollars to properly bill you. It may seem like any other transaction from your perspective, but behind the scenes the credit card issuer pays various costs associated with currency conversion, transferring money through a foreign bank and so on.
Many issuers offset these costs by charging a foreign transaction fee for every overseas purchase.
The fee usually ranges from 3%-5% of the amount spent on each transaction, which means the cost to you can really add up:
| Foreign purchase in dollars |
+3% foreign transaction fee |
+5% foreign transaction fee |
| $50 |
$51.50 |
$52.50 |
| $100 |
$103 |
$105 |
| $500 |
$515 |
$525 |
Fortunately, a number of credit card issuers have stopped charging foreign transaction fees. A 2019 credit card fee survey by CreditCards.com found that more than half of the credit cards they analyzed waived foreign transaction fees. They were exceedingly rare on travel cards.
Why do banks charge a foreign transaction fee?
Overseas transactions require banks to convert the money spent into U.S dollars. So when you make a purchase online from an overseas vendor or make an international charge, the conversion process costs money, which is where the foreign transaction fee comes into play. The total fee that you pay often derives by adding the charge from the issuing bank (like Bank of America, Wells Fargo) and the processing fee from the payment networks (like Visa or Discover).
Foreign transaction fees and credit card rewards
Foreign transaction fees don’t apply to rewards spending since they’re not part of the purchase price. Using the chart above as an example, consider how it would work with a 1 point per dollar credit card charging a 5% foreign transaction fee. A $500 overseas purchase would show up as $525 on your bill, but you’d earn 500 rewards points instead of 525.
In other words, you could:
- Spend 444 euros (about $500 U.S.) for a hotel on a vacation to Barcelona
- Owe your credit card issuer $525 for that purchase, counting the foreign transaction fee
- Earn 500 rewards points, leaving a potential 25 points (5%) on the table
Who should get a no foreign transaction fee card?
If you’re commonly making overseas purchases or planning your future international trips, a no foreign transaction fee card could really be a beneficial perk to take advantage of. Those who could benefit from a no foreign transaction fee credit card include:
- Frequent international travelers
- Those who shop with international vendors online
- Owners of a small business that purchases from overseas sellers
Foreign transaction fees by issuer
Foreign transaction fees among credit card issuers vary according to different factors, including processing fees from payment networks. This chart shows how much several issuers charge for foreign transaction fees (for their cards that have them).
| Issuer |
Issuer fee |
Mastercard/Visa fee |
Total |
| American Express |
2.7% |
N/A |
2.7% |
| Bank of America |
2% |
1% |
3% |
| Capital One |
N/A |
1%; absorbed by Capital One |
0% |
| Chase |
2% |
1% |
3% |
| Citi |
2% |
1% |
3% |
| Discover |
N/A |
N/A |
0% |
Credit cards with no foreign transaction fees (by issuer)
Cards that don’t charge foreign transaction fees include:
American Express
Bank of America
Capital One
Chase
Citi
Discover
Business credit cards with no foreign transaction fee
Small business owners who don’t want to pay fees on foreign transactions have a number of credit card options to choose from. Top candidates for cash back and travel rewards include:
Business cash back
Business travel
*The Plum Card is a charge card rather than a credit card, meaning you’ll have to pay your balance in full every month without carrying anything over.
Further reading: Guide to the best business credit cards with no foreign transaction fees
Preparing for international travel: What you need to know
- Tell your bank about your travel plans ahead of time. Otherwise, you risk being locked out of your accounts. Banks will often freeze an account on suspicion of fraud if they detect unusual activity, such as a purchase being made thousands of miles from the cardholder’s address. You may be able to notify your bank through your mobile app, or you can simply call.
- Some regions do not accept certain credit card networks. Visa and Mastercard payment networks are usually your safest bets but are still not accepted in many parts of Asia, which is dominated by UnionPay. Discover and American Express are less often accepted overseas. Since acceptance varies even between different regions of the same country, it’s best to do your research ahead of time, carry credit cards from at least two different networks and always have cash on hand.
- EMV (Europay, Mastercard, and Visa) chip cards are standard in many countries outside the United States. Contactless cards, too, are becoming increasingly common in many European countries. According to Visa, more than half of retailers in Australia, Canada, the U.K. and France currently accept contactless payments. While magnetic stripe “swipe” cards might still work in some of these countries, using them may slow down the purchase or cause confusion. If you don’t have an EMV chip or contactless card yet, you can usually swap out your magnetic stripe card by calling your bank.
- Credit is probably the safest way to pay. If your credit card is lost or stolen, the maximum amount of fraudulent purchases you can be liable for is $50, thanks to the Fair Credit Billing Act. With debit cards, you can be liable for $500 or more, depending on how long it takes you to report the fraud. Cash, while convenient, is easy to misplace and there’s little you can do to replace it when stolen or lost.
- Never pay in U.S. dollars. Merchants may ask you whether you’d like to pay in U.S. dollars instead of the local currency. This option requires dynamic currency conversion, and while it may seem appealing to know how much you’re spending upfront, it’s nearly always a bad idea. With dynamic currency conversion, you pay a currency conversion fee upfront, usually much higher than foreign transaction fee rates charged by card issuers. But it doesn’t end there. Even if the purchase is made in U.S. dollars, banks may still charge foreign transaction fees if the purchase is processed by a foreign bank. So if you aren’t careful, you could end up paying a currency conversion fee and a foreign transaction fee. What is the easiest way to avoid this mess of fees? Pay in local currency with a no foreign transaction fee credit card card.
How to save money on future international travel
Avoiding foreign transaction fees should be at the top of your list when looking for a credit card to take with you on your future overseas trip. Here’s some advice to help save even more:
- Use a specialization strategy. If you venture abroad with multiple no-foreign-transaction-fee credit cards, think about using the right card to maximize your rewards. For example, the Capital One Savor has a rewards rate of 4 percent cash back on dining and entertainment. A second, flat-rate card such as the Capital One Quicksilver would earn more than the Savor (1.5 percent cash back vs.1 percent cash back) on other purchases. You could use Savor for dining and entertainment and make Quicksilver your general-purpose card.
- Know how your rewards programs define “travel” beyond airfare and hotels. Many rewards cards offer bonus points on smaller travel purchases, but issuers have their own definitions of travel. Some issuers put expenses such as rideshares and parking fees in the travel category, while others don’t. Pay attention to the specifics of your rewards program to earn the most points.
- Book through rewards portals or affiliate sites that add value. If you book a hotel room through the Chase Ultimate Rewards portal, you may be able to boost the value of your points by 25%-50% depending on which card you have. With certain cards, American Express offers credits up to $100 at Hotel Collection locations.
- Avoid ATM fees by researching your bank’s network of international ATMs ahead of time. While international ATM fees may be unavoidable with some issuers, others, like Bank of America, provide a list of international partner ATMS where you can withdraw cash without BofA fees.
- Know what kind of handy travel perks your credit card provides, such as car rental insurance, lost luggage insurance or a TSA PreCheck credit. Whether its a card you already have or its a card you’re hoping to acquire before your travels, make sure you’re utilizing the built-in benefits that can save you money.
Compare different payment options for foreign purchases and travel
No single payment option offers an ideal solution for every possible set of circumstances, especially when you’re traveling abroad. Consider the pros and cons of your various options. Depending on your destination and personal preference, you may find that a combination of payment methods proves most useful.
Credit cards
- Pro: They’re safer than cash or a debit card. With a credit card, you can dispute and resolve fraudulent charges before your statement closes or freeze your card before thieves get a chance to use it.
- Con: They’re not accepted everywhere, particularly in rural areas.
Debit cards
- Pro: Convenience is probably their best attribute.
- Con: Even though they’re safer than cash, they have fewer protections against theft than credit cards — and a worse exchange rate.
Cash
- Pro: Cash is still king in some settings, including open-air markets where chip readers can be hard to come by.
- Con: Unlike electronic payment methods, cash is untraceable. If your wallet is stolen, the cash inside is likely gone forever.
Cryptocurrency
- Pro: It’s very fraud-resistant, since it doesn’t involve giving a merchant access to your full credit line.
- Con: A number of countries don’t recognize cryptocurrency as a legal medium for transactions. Be sure to do your research ahead of time. Plus, you may be able to use it for foreign online purchases.
Travelers checks
- Pro: (Yes, they still exist.) They’re secure, replaceable if lost or stolen and accepted at many places worldwide.
- Con: You may lose money through fees or the exchange rate. Also, debit and credit cards solve many of the same security problems that travelers checks do, while being far more convenient.
Can you use no foreign transaction fee cards for online and non-travel purchases?
Yes, you can certainly use your no foreign transaction fee credit card for online and non travel purchases. You can use your card for online purchases when buying from an overseas merchant. If the items you’re interested in buying are listed in a foreign currency, that could mean that you’re on an international sellers website, and you may be able to take advantage of your no foreign transaction fee credit card.
However, this can vary by the card issuer and the bank. It’s imperative that you do your research before making any online overseas purchases so you don’t get slapped with an unexpected fee or a declined transaction. You can check the terms and conditions by visiting your card issuer’s website. If you can’t locate the needed information on the website, you can always pick up the phone and call the customer service number on the back of your credit card.
Business credit cards with no foreign transaction fee
Small business owners who don’t want to pay fees on foreign transactions have a number of credit card options to choose from. Top candidates for cash back and travel rewards include:
Business cash back
Business travel
*The Plum Card is a charge card rather than a credit card, meaning you’ll have to pay your balance in full every month without carrying anything over.
How we chose our list of best no foreign transaction fee cards
Bankrate uses a comprehensive system to evaluate credit cards and produce a 5-star score. In the case of no-foreign-transaction-fee cards, we’ve emphasized the criteria most relevant to consumers looking to maximize the value of their international purchases.
Annual fee
Most cards on our list are free of both annual fees and foreign transaction fees. However, some annual-fee cards offer incentives, like a large welcome or introductory offer, that offset the yearly cost of membership. For this category, we evaluated whether the total value justifies the cost of using the card.
Rewards value
We place priority on cards that put money back in your wallet — regardless of whether you’re using it in Tucson or Tuscany. For each card, we’ve evaluated the earnings rate and corresponding redemption value to identify the cards that accomplish more than just offering a line of credit.
Additional perks
Travel perks may not be your main motivation for getting a no foreign transaction fee card, but they often provide additional benefits that increase the card’s total value. Several credit card issuers offer additional features, like travel accident insurance or trip delay insurance, to make their cards more useful to consumers.
More information on overseas travel and credit cards
If you still need to do some research, check out these resources from Bankrate:
Senior Editor Barry Bridges has been writing about credit cards, loans, mortgages and other personal finance products for Bankrate since 2018. His work has also appeared on websites including Nasdaq.com, Zillow.com and The Simple Dollar. He was previously an award-winning newspaper journalist in his native North Carolina. Send your questions about credit cards (and fantasy baseball) to bbridges@bankrate.com.
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