Yahoo Finance 3 Credit Cards Without Foreign Transaction Fees
Countless Americans throw away hundreds of dollars unnecessarily each time they travel outside of the country, and most people have no idea they're doing it.
The good news is that it's easy to stop.
All you have to do is pick the right credit card -- one that comes without so-called foreign transaction fees.
What are foreign transaction fees?
Banks charge foreign transaction fees whenever you use your U.S. credit card in a foreign country or make a purchase through a foreign bank. For example, if you buy a bottle of Chianti from an Italian winery's website and a Lionel Messi soccer jersey from FC Barcelona's website, you might have to pay foreign transaction fees, even if you place the orders from your home here in the U.S. But Americans most often run across foreign transaction fees when they are traveling overseas.
The fee typically equals 2 to 3 percent of the transaction, but it won't appear as a separate line item on your statement. It will simply be added to the total cost of the purchase. And while 2 to 3 percent may not seem like a lot when you're buying a baguette in Paris, it adds up quickly when you consider just how expensive an overseas vacation can be, especially for a family of four. You could be talking about $150 in extra charges on a $5,000 vacation. Bump the cost up to $10,000, and those extra fees could run as high as $300. That's real money.
In years past, most cards came with these fees. Fortunately, that's no longer the case. Here are some of the no-foreign-transaction-fee cards to consider for your next overseas adventure.
Barclaycard Arrival Plus World Elite MasterCard
This is typically the top card I recommend for any international traveler. First, it has no foreign transaction fees. It is also one of the few widely available chip-and-PIN credit cards, which will help you avoid possible headaches during your European adventure. The card's APR starts as low as 14.99 percent and offers double points on all purchases. The $89 annual fee is waived in the first year. And there's a 0 percent balance transfer offer for the first 12 months.
The card also comes with a 40,000-point signup bonus when you spend $3,000 in the first 90 days. Those 40,000 points can be redeemed for $400 in statement credits toward a travel purchase. As an added bonus, when you redeem points toward a purchase, you get a 10 percent refund. That means that after you give the 40,000 points for the $400 statement credit, you'll actually get 4,000 points back immediately.
Capital One Venture Rewards Credit Card
This is another good option for foreign travelers. Like the Barclaycard, this card comes with a 40,000=mile bonus once you spend $3,000 in the first three months. It also gives you double miles for every dollar spent and waives the annual fee ($59 in this case) for the first year. Plus, the card's interest rate starts as low as 12.9 percent.
One reason I can't recommend this over the Barclaycard: It's a chip-and-signature card, not a chip-and-PIN card. That means while it might be accepted more often than a magnetic stripe card, it won't be as widely accepted as a chip-and-PIN card. Thus, if I'm looking to pick just one card to take on a European vacation, it would have to be a chip-and-PIN card.
Still, this card is a perfectly fine second option -- especially given the low APR and annual fee.
Chase Sapphire Preferred
This card also comes with a 40,000-point bonus after three months. But unlike the previous two cards, this requires $4,000 in spending rather than $3,000 during that time.
Many travelers swear by this card, in part because you can transfer rewards points from this card to travel partners on a 1-to-1 basis. For example, 40,000 points earned with this card would be worth 40,000 miles in Southwest's Rapid Rewards program. Not every card provides that option. In addition, you can save 20 percent when you use the card to book travel through Chase's Ultimate Rewards portal, another way to stretch your rewards point value.
It also comes with no foreign transaction fees, double points for purchases, an APR as low as 15.99 percent and a $95 annual fee that is waived for the first year. Like the Capital One card, it is a chip-and-signature card.
Options Abound
More and more issuers are offering cards that are free from foreign transaction fees, and that trend isn't likely to end anytime soon. That's great news for travelers and means that by shopping around you should be able to find a card that fits your needs and can save you some money.
After all, foreign travel is expensive enough. Why pay 2 to 3 percent extra for everything if you don't have to?
Matt Schulz is the senior industry analyst at CreditCards.com, a site dedicated to helping people make smart decisions about obtaining and using credit. You can follow him on Twitter at @matthewschulz.
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