The Truth About Credit Cards.com

With all the hubbub about the recent foreign transaction fee settlement, I thought I’d share a relevant story.

A friend of mine recently opened a Capital One credit card for the sole purpose of using it while traveling abroad to avoid foreign transaction fees.

If you weren’t aware, Capital One and Discover are the only credit cards you can use without incurring foreign transaction fees, which often range from 1-3% of the cost of each transaction.

And those fees can add up, especially if you make some big purchases or spend a lot of time away from home.

But do these other credit cards that promise no fees actually work in foreign countries?

Well, my friend arrived in Europe, and used his Capital One credit card once with little trouble, but on subsequent attempts, the credit card was declined.

So his plan to avoid foreign transaction fees was essentially stopped in its tracks after a single purchase.

It’s unclear if Capital One doesn’t work well abroad, or if the card issuer was just blocking his transactions because they were flagged in the system as unusual and possibly fraudulent.

But regardless, if you do plan on using one of these no fee cards abroad, call the credit card issuer first to ensure the card will actually work, and let them know where you’re going so there aren’t any surprises.

Also bring along the card issuer’s contact phone number in case you need to reach the company while traveling, and bring a back-up form of payment in the event that your credit card is rejected.