Find the Best No Foreign Transaction Fee Credit Cards

A credit card with no foreign transaction fees is an international traveler’s best friend. If you’ve ever felt like you’re getting ripped off when you use your credit cards overseas, you’re probably right: most take an extra 1-3% in fees every time you make a purchase abroad. Thankfully, there are a number of international credit cards with no foreign transaction fees that let you shop, eat and experience to your heart’s content.

It’s becoming standard for travel credit cards to waive foreign transaction fees, so you should look askance at one that doesn’t. Even corporate credit cards that cater to business travelers are jumping on the bandwagon, most notably the AmEx Business Platinum and Capital One Spark cards. Below, we discuss our favorite travel-friendly cards, followed by a more extensive, constantly updated list.

A Few of Our Favorite International Credit Cards

The Capital One® Venture^℠ Rewards Credit Card is one of our favorite credit cards, period. In addition to not charging any foreign transaction fees, it pays 2% back on all purchases. And while this 2% isn’t redeemable for straight-up cash back, it is redeemable for statement credit against travel purchases. Spend $300 on a flight? Use 30,000 miles and it’s gone. This means no restrictions, no blackout dates, and you’re not required to stay loyal to a single airline or hotel, so the rewards system couldn’t be easier. It does carry a $59 annual fee (waived the first year).

The Chase Sapphire Preferred^℠ Card is another great travel rewards credit card, and our favorite in Chase’s lineup with a $500 signup bonus. The card gives 40,000 Ultimate Rewards Points, worth $500 of travel, when you spend $3,000 in the first 3 months. In addition, you earn 2x points (or 2%) on airfare and hotels and a 7% dividend bonus every year on the rewards you earn, and points are worth 25% more when you redeem them for travel booked with Chase. You can also transfer these points 1:1 to a handful of frequent flyer and hotel rewards programs. All this in addition to waived international fees (there is a $95 annual fee, waived the first year).

The The Platinum Card^® from American Express is not a card we recommend lightly, given its $450 annual fee. But for serious globe-trotters, the benefits more than outweigh the cost. You pay no fees on foreign purchases, you get a $200 annual credit toward incidentals on your favorite airline, complimentary access to airline lounges through Priority Pass (worth $400 by itself, if you find yourself waiting in a lot of international airports), and the Membership Rewards Points you earn are worth 20% more when you “Pay with Points” through AmEx. If you spend $1,000 in the first 3 months, you’ll get 25,000 additional points to spend at your leisure.

Credit Cards With No Foreign Transaction Fee

These are all credit cards that charge no foreign transaction fees at all. Are we missing anything? Let us know in the comments below.

List current as of May 9, 2012.

• American Express Platinum and Centurion (as of April 2011)
• Bank of America Privileges with Travel Rewards
• Bank of America Travel Rewards
• Bank of America WorldPoints Travel Rewards for Businesses
• All Capital One credit cards, including:
• Capital One® Venture^℠ Rewards Credit Card
• Capital One® Cash Rewards - $100 Cash Back Bonus
• Capital One Spark for Business suite
• Capital One® Cash Rewards for Newcomers, for recent immigrants looking to build credit
• Citi ThankYou Premier and Citi ThankYou Prestige (as of December, 2010)
• Citi Executive AAdvantage World Elite MasterCard  (as of July, 2011, carries a $450 annual fee)
• Chase British Airways Card (as of November 2010)
• Chase Priority Club Rewards Signature (as of July 2010)
• Chase Hyatt Card
• Chase Palladium, if you’re one of the fortunate few (we’re not)
• Chase Ritz Carlton Rewards Card (as of June 2011, though this has a $395 annual fee)
• Continental Presidential Plus from Chase
• United Mileage Plus Club Visa from Chase (this card no longer seems to be offered, after United’s 7/19/11 credit card revamp)
• Chase Sapphire Preferred
• Discover credit cards, effective 11/6/11, though their international acceptance is still limited
• First National Bank of Omaha Graphite American Express
• Marriott Rewards Premiere from Chase (as of March 2011)
• All Pentagon Federal cards, including the Pentagon Federal Promise (currently offering 4.99% balance transfers for 2 years) and PenFed Premium Travel American Express (5x points on airfare & Priority Pass lounge access when you spend $15k+ at 600 lounges worldwide)
• Harvard World MasterCard
• HSBC Premier (you have to have something on the order of $100,000 deposited with them to qualify)
• Schwab’s Invest First Visa (one of the best credit card deals of all time, but no longer available)
• Most credit unions offer up no fees other than the 1% Visa charges them. Some even have “no foreign transaction fee”, including
  • Northop Grumman Federal Credit Union (anyone can join by making a contribution to the Southern California Historical Aircraft Foundation)
  • Vystar Credit Union (must live in FL)
  • ESL Federal Credit Union (must live in upstate NY)
  • Texas Dow Employees Credit Union (TDECU) – anyone in the metro Houston area can join
  • Truliant Federal Credit Union (membership open to many regions of VA, SC, and near Greeneville, SC)
  • Associated Credit Union (membership is open to everyone)
  • Kirtland Federal Credit Union (membership is tough here, you have to be affiliated with the military in Arizona, either on Kirtland AFB, Reserves, or NM National Guard)
  • Reliant Credit Union (Monroe, Ontario and Wayne counties in New York)
  • Aerospace Credit Union (you have to work for Aerospace Corporation, or on Los Angeles AFB)
  • CoastHills Federal Credit Union (for residents of San Luis Obispo and northern Santa Barbara counties in CA)
  • Stanford Federal Credit Union (Anyone can join by donating $15-20 to one of two organizations)
  • Pacific Oaks Federal Credit Union (Open to residents of Ventura County, California)
  • Burbank Community Federal Credit Union (Open to residents of the City of Burbank, California)
  • Elga Credit Union (Open to residents of the Michigan Counties of Genesee, Saginaw, Lapeer, Shiawassee, Oakland, or Livingston)
  • Cy-Fair Federal Credit Union (Open to residents of parts of Houston, in the Cy-Fair ISD area)
  • Taylor Model Basin Federal Credit Union
  • Virginia Credit Union (Open to residents in many areas of Virginia)
  • Apple Federal Credit Union (Open to those associated with many of the school systems in Northern Virginia)

Are Stated Foreign Transaction Fees Representative of Reality?

Now, in addition to what the banks claim they will charge you in terms of “foreign transaction fees”, you are also faced with the exchange rate that your credit card issuer uses to convert the currencies. And if you’re a cynic like me, you may wonder if they charge you hidden fees and unfair exchange rates on top of the disclosed rates.

We reached out to our readers in April 2010′s Hong Kong Dollar FX survey and Euro FX survey, and were able to buy the same item at the same time with 10 credit cards from leading US card issuers. Note that Hong Kong dollars don’t fluctuate much, because they are pegged to the US dollar. The Euro is a different story entirely, especially given the budding European debt crisis.

Conclusion

Surprisingly, everyone keeps it pretty straightforward and honest, so it pays to look for the card issuer with the lowest advertised foreign transaction fee rate.

Foreign Transaction Fee Survey Results

In the tables below, there are a few Amex and Fidelity results that differ from the expected values by a few cents. We re-ran the experiment on a few of these cards with transactions that were closer to $100, and these anomalies disappeared.

HKD survey:

Euro survey:

Current foreign transaction fees for US card issuers

* While HSBC and Chase offer lower charges to a small number of “premier” customers, the majority of their cards charge 3%.