There are many hidden expenses when it comes to traveling overseas. And one of them comes from the plastic in your wallet. Most credit cards charge a fee for making transactions in foreign currencies, an amount which is usually between 1 and 3% of your purchase price. Fortunately, one of the benefits of the Credit CARD Act has been to make these kinds of fees more transparent to consumers. So, at least now when you’re traveling, you should be aware of how much extra your charges are costing you, as any exchange fees should be broken out separately on your credit card statement.
That’s not to say that you should avoid using your credit card while you’re on vacation. Charging your purchases to a travel credit card while you’re abroad does have a few very significant advantages. Among the most important is the convenience and security of not having to carry too much cash. And you may be pleased to find out that even if you are being charged a fee for using your card, you’ll still almost certainly come out ahead versus changing your money at the airport or hotel, since the exchange rates that credit cards use are quite competitive.
Still, wouldn’t it be better to not be charged the fee at all? Fortunately there has been a trend towards offering this benefit on many cards, typically targeted to more affluent customers more likely to be frequent travelers.
Read on to find a list of credit cards and charge cards that do not charge foreign transaction fees:
Alitalia American Express card – $89 annual fee, waived first year
Centurion Card – $2500 annual fee + $5000 initiation fee
The Platinum Card – $450 annual fee
The Harvard World MasterCard – no annual fee
All Capital One cards
Please see each card’s terms and conditions for current rate and fee information.
British Airways Visa Signature® Card
Chase Sapphire Preferred®
Continental Airlines Presidential Plus Card (expired offer)
Fairmont Visa Signature® Credit Card
The Hyatt Credit Card
The JP Morgan Select Card
Marriott Rewards® Premier Credit Card
Priority Club® Select Visa®
United MileagePlus® Club Card
The Ritz-Carlton Rewards® Credit Card
Southwest Airlines® Rapid Rewards® Premier Card
Citi Hilton HHonors Reserve Card – $95 annual fee
Citi ThankYou Premier Rewards Card – $125 annual fee, waived first year
Citi ThankYou Prestige Card – $500 annual fee
Citi Executive / AAdvantage Card – $450 annual fee
HSBC Premier – no annual fee, but requires maintaining $100k in combined deposit and investment balances
Pentagon Federal – all its cards, including:
PenFed Premium Travel Rewards American Express – no annual fee
PenFed Promise Visa – no annual fee
PenFed Visa Platinum Gas Cash Rewards Card – no annual fee
Other Banks/Credit Unions
- Associated Credit Union – no annual fee, open membership
- Cy-Fair FCU – no annual fee, membership info (parts of Houston, TX)
- ELGA Credit Union Visa – no annual fee, membership info (Michigan-based)
- ESL Federal Credit Union Visa – no annual fee, membership info (Rochester, NY-based)
- Kirtland FCU Visa – no annual fee, membership info (military, NM-based)
- Northrop Grumman FCU MasterCard – no annual fee, membership info
- Reliant Community Credit Union Visa – no annual fee, membership info (upstate NY-based)
- Stanford Federal Credit Union Classic Visa – no annual fee, membership info
- Taylor Model Basin FCU Visa – no annual fee, (membership limited to employees of the Naval Surface Warfare Center, Carderock, MD)
- Texas Dow Employees Credit Union (TDECU) – no annual fee, membership info (Houston, Texas-based)
- Truliant FCU Visa – no annual fee, membership info (NC, SC, VA, OH-based)
- UMe Federal Credit Union – no annual fee, Burbank, CA-based
- United Bank Visa Platinum – no annual fee
- Virginia Credit Union – no annual fee, membership info (Virginia-based)
- Vystar Credit Union – no annual fee, membership info (Florida-based)
What about the exchange rate that is used?
Several years back, I ran an experiment to compare the difference, if any, between the underlying exchange rates used by different networks, such as American Express and Visa/Mastercard. My goal was to determine whether the credit card companies were padding their profits by using favorable exchange rates, in addition to tacking on the foreign transaction fee surcharges.
Ultimately, I concluded that, given how much freedom the networks had given themselves in terms of determining the conversion rate, everything looked reasonable. Instead, it was far more practical and productive to focus upon finding cards with the lowest advertised foreign transaction fees, such as those listed above.
Want to keep up with the latest credit card deals?
- PenFed Removes Foreign Transaction Fees From All Its Credit Cards - October 5, 2011
- PenFed Premium Travel Rewards Amex - November 16, 2009
- Navy Federal Visa Signature Flagship Rewards: Get 60,000 Points Worth $600 Towards an Airline Ticket - October 14, 2013