The Best Credit Cards to Use Abroad for Free!

September 22, 2011 No Comments »
The Best Credit Cards to Use Abroad for Free!

So you’re thinking about traveling abroad.  Sweet, but before you jump on that plane, there’s plenty to do to ensure you have a safe and satisfying trip.

Packing and planning aside, you should be squarely focused on your finances, as foreign vacations can cost you and your family thousands of dollars, and a few right moves can save you hundreds.

Assuming you’re traveling out of the country, one major financial issue will be foreign currency conversion.

You may be thinking about getting Travelers’s cheques or planning your foreign exchange tactics well in advance of your trip.

But times have changed in the last ten years, as ATM, debit and check cards, along with credit cards now come into play more often than cash itself.

And nowadays you may find that many institutions won’t accept Traveler’s cheques. As a result, American Express and Travelex now sell “traveler’s cheque cards,” which work like temporary credit cards.

But how many people use those methods of payment these days? Not many. It’s really all about credit cards nowadays.

This is where things get a bit tricky, as using your credit card abroad comes with “foreign transaction fees” and point-of-sale fees. Boo!

In fact, Visa and Mastercard charge 1% of the total purchase price on all foreign conversions, along with whatever the credit card issuer charges, which is typically another 2%, totaling 3% of the purchase price.

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.

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

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 conversion.

Find a Credit Card with No Foreign Transaction Fees

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

Discover used to charge a 2% foreign transaction fee on its credit cards, but dropped the fee on its entire line of cards.

Additionally, Discover cards are now accepted in many countries beyond just Canada, Mexico, China, and other parts of Latin America.

So if you’re traveling to Europe, a Discover card could be a good credit card to bring in tow. But many still cite problems with acceptance.

Then there’s American Express, which charges a slightly below-average foreign transaction 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 does not charge a foreign transaction fee, but the annual fee is a staggering $450! Meanwhile, their American Express Blue Sky Card hits you with a 3% fee!

Another option is Citi, though most of their credit cards generally charge a 3% foreign transaction fee, so again, not ideal for most cardholders.

Where does that leave us? Well, your best bet is either the Chase Sapphire Preferred, which doesn’t charge a foreign transaction fee and comes with a huge opening bonus, or a Capital One credit card, which also waive foreign transaction fees.

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

At the moment, Sapphire Preferred comes with a $400 cash back bonus (or $500 in airfare), and because it’s backed by 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 or Discover 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.

List of Credit Cards with No Foreign Transaction Fees

For those who just want to see the list (I don’t blame you), here you go. Keep in mind that these rules can change over time, so always read the fine print when applying for and/or using said card.

American Express

- American Express Platinum Card
– American Express Business Platinum Card
American Express Centurion Card

Bank of America

- BankAmericard Privileges with Travel Rewards
– BankAmericard Travel Rewards (no annual fee)
– WorldPoints Travel Rewards for Business Visa Card (no annual fee)

Capital One (all)

- Capital One Classic Platinum Credit Card
Capital One Cash Rewards (no annual fee)
– Capital One MTV Visa Card (no annual fee)
– Capital One Orbitz Visa Platinum (no annual fee)
– Capital One Platinum Card
– Capital One Platinum Prestige (no annual fee)
– Capital One Rewards for Newcomers (no annual fee)
– Capital One Sony Card (no annual fee)
– Capital One Spark (depends on version)
– Capital One Venture Card
– Capital One VentureOne Rewards Credit Card (no annual fee)

Chase

- British Airways Visa Signature Card
– Chase Fairmont Visa Signature Credit Card
– Chase Priority Club Select Visa Card
– Chase Sapphire Preferred
Hyatt Credit Card
Ink Bold Business Charge Card
– Ink Plus Business Credit Card
– J.P. Morgan Select Credit Card
J.P. Morgan Palladium Card
– MileagePlus Club Card
– Marriott Rewards Premier Visa Signature Card

Citi

- Citi Hilton HHonors Reserve Card
– Citi ThankYou Premier Card

Discover (all cards) *Not accepted in Australia, France, Greece, Ireland, and elsewhere

- Discover it Card (no annual fee)
– Discover More Card (no annual fee)
– Discover Motiva (no annual fee)
– Discover Open Road Card (no annual fee)
– Escape by Discover
– Miles by Discover (no annual fee)

Penfed

- PenFed Platinum Cash Rewards Card (no annual fee)
– PenFed Platinum Rewards Card (no annual fee)
– PenFed Premium Travel Rewards American Express® Card (no annual fee)
– PenFed Promise Card (no annual fee)
– PenFed Defender American Express® Card (no annual fee)
– PenFed Visa Gold (no annual fee)

Wells Fargo

- Wells Fargo Propel World American Express Card ($175 annual fee)
– Wells Fargo Propel 365 American Express Card ($45 annual fee)

Tip: The Barclaycard Ring MasterCard only charges a 1% foreign transaction fee with no annual fee.

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