Best Credit Cards to Use Abroad

Consumers often inquire about which credit cards are the best to use when traveling oversees, as it can be quite expensive to pull out foreign currency.

Additionally, using cash leaves you with little recourse if something goes wrong, especially if you want a refund.

Unfortunately, many credit card issuers charge so-called “foreign transaction fees” for the convenience of using plastic abroad, which tend to be 3% of the purchase amount, in U.S. dollars.

So if you spend $100 at a fancy restaurant in Paris, you’ll be hit with a $3 charge simply for using your credit card.

While it may not seem like much for the ease of whipping out your plastic, those fees can add up on a lengthy vacation.

Imagine getting hit with the fee daily for two weeks on all your purchases…before you know it you’ve accrued more than $100 in fees. Or several hundred, depending on what you’re buying for you and your family.

Clearly this is not ideal, though it may still beat paying with cash, thanks to the fees associated with foreign currency exchange.

Find a Credit Card With No Foreign Transaction Fee

But there’s an even better solution to this nagging problem – using a credit card with no foreign transaction fee.

Discover used to not charge a foreign transaction fee on its credit cards, but now charges 2% of the U.S. dollar amount of each purchase made in a foreign country.

Additionally, Discover cards are generally only accepted in Canada, Mexico, China, and other parts of Latin America.

So if you’re traveling to Europe, it’s not a good credit card to bring in tow.

Then there’s American Express, which charges a slightly below-average fee of 2.7%.

This will save you a bit of money, but Amex isn’t accepted globally at all locations. Heck, even stateside a lot of merchants don’t accept Amex. And you certainly don’t want to be halfway across the world with a credit card you can’t actually use.

They do have some credit cards, such as their Platinum card, which do not charge a foreign transaction fee, but the annual fee is a staggering $450!

Another option is Citi, though they generally charge a 3% foreign transaction fee, so again, not ideal.

Where does that leave us? Well, your best bet is either the Chase Sapphire Preferred, which doesn’t charge a foreign transaction fee, or a Capital One credit card, which also come with no foreign transaction fees.

Check out the Venture Rewards credit card for more on that.

At the moment, Sapphire Preferred comes with a $500 cash back bonus (or $625 in airfare), and because it’s branded as a Visa or MasterCard, it’s accepted everywhere worldwide.

This makes it the ideal choice for a traveler. The only downside is the $95 annual fee, which is waived for the first year.

If you want to avoid the annual fee, check out a Capital One credit card instead.

Tip: Regardless of which card you choose, be sure to inform your credit card issuer of your travel plans beforehand so they don’t put a hold on your credit card once you try to use it at your foreign destination.