The Best Travel Rewards Cards With No Foreign Transaction Fees

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In the comments section of a recent post comparing The Blue Business℠ Plus Credit Card from American Express and Ink Business UnlimitedSM Credit Card, reader Pam asked the following:

I would really appreciate your thoughts on best no-foreign transaction fee cards (non-cash-back) for intl use in different categories: plane; car rental; ground transportation; tours; restaurants; kiosks. Thank you for your input & (hopefully) future post!

So let’s look at that — what factors should you be considering when deciding which no foreign transaction fee card to use, and which cards are best?

What makes a good no foreign transaction fee credit card?

I remember back in the day when it was rare for a card not to have foreign transaction fees. The fact that a card didn’t have foreign transaction fees was reason enough to use it for purchases abroad. Nowadays you have all kinds of great credit cards that not only have no foreign transaction fees, but offer other benefits for purchases abroad.

So, what should you be looking for in a card with no foreign transaction fees?

  • It offers bonus points in categories you spend a lot of money in abroad; for most of us this would include travel, entertainment, and dining
  • It’s a Mastercard or Visa; while American Express has some good cards with no foreign transaction fees, they don’t have the same level of global acceptance as other issuers, and that becomes a problem
  • If you are going to make travel purchases with the card (like airfare), ideally it offers useful travel coverage

Other considerations when making purchases abroad

Before I get into my specific card suggestions, I wanted to share a few other general tips when paying for purchases abroad:

Always pay in local currency

When using a card with no foreign transaction fees, always pay in the local currency (you’ll often be asked if you want to pay in local currency or your home currency). This will get you a better exchange rate, since if you pay in USD you may be hit with an unfavorable rate. This might be counterintuitive, but trust me.

Not all conversion rates are the same

It’s important to understand the difference between how card issuers determine exchange rates. People assume that all cards without foreign transaction fees will get you the same conversion rate. That’s not the case. While the foreign transaction “junk” fee as such is waived (often around 3%), conversion rates can differ between issuers

As I’ve explained in a previous post, typically Mastercard has the best exchange rates, often significantly lower than what’s offered by Visa. Rumor has it that the reason for this discrepancy is as follows:

  • Visa guarantees the exchange rate the day you make the purchase, but has a built in cushion since the transaction typically only posts a couple of days later, so exchange rates could change, meaning there’s some risk for Visa
  • Mastercard charges the exchange rate the day the transaction posts (often a couple of days after the transaction), so since they’re charging whatever the rate is, the cushion is much smaller

Chip & PIN technology matters

While credit card use is more widespread in the US than anywhere else, we’re also way behind when it comes to credit card technology.

A vast majority of US credit cards don’t have Chip & PIN technology. While many credit cards nowadays have chips, most of the technology is Chip & Signature technology, where you insert your card and then sign.

What’s the benefit of Chip & PIN? Many automated kiosks, particular in Europe, only take Chip & PIN cards. These aren’t common in the US, though it’s an area where Barclays is a leader. So if this is something that’s important to you, consider the Barclaycard Arrival® Plus World Elite Mastercard® (see terms).

Personally I do just fine using Chip & Signature cards, though it does often mean going into the train ticket office rather than using a kiosk.

What are the best no foreign transaction fee cards?

I’d say there are three cards that are most rewarding for foreign purchases when you factor everything in:

Citi Premier℠ Card

The card offers triple points on travel and gas, and double points on dining and entertainment. For most of us, I’d say travel, dining, and entertainment covers a vast majority of what we’d spend money on while abroad.

The “travel” category includes things like flights, hotels, car rentals, tour operators, ferries, subways, trains, cruises, and even parking. Dining is pretty self explanatory, and then entertainment includes things like live entertainment, concerts, movie theaters, amusement parks, tourist attractions (including museum and art galleries), and more.

For a card with an annual fee of under $100, I’d say this is by far the most rewarding card for the average person’s spend while traveling abroad.

You also have the advantage of this being a Mastercard, which generally has the best exchange rate.

Lastly, the card offers a primary collision damage waiver benefit outside the US (it’s secondary within the US), which is great if you’re renting a car. If you use your card to pay for flights, you’ll also receive benefits like trip delay protection, lost and delayed baggage coverage, and more.


Earn double points on museum tickets with the Citi Premier

Chase Sapphire Reserve®

The Chase Sapphire Reserve® has a $450 annual fee and is offering a welcome bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months.

While the card’s $450 annual fee sounds high, in reality the card shouldn’t cost you nearly that much. That’s because it has a $300 annual travel credit, and also offers a Priority Pass membership.

The card offers triple points on dining and travel, which covers a lot of the purchases that many of us would make while abroad.

The advantage of this over the Citi Premier is that it offers triple points on dining rather than double points, though the downside is that it offers a single point per dollar spent on entertainment, while the Citi Premier offers double points in that category.

The card offers excellent coverage, including primary collision damage waiver benefit (both within the US and abroad), which is great if you’re renting a car. If you use your card to pay for flights, you’ll also receive benefits like trip delay protection, lost and delayed baggage coverage, and more.


Earn triple points on restaurant purchases abroad

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred® Card has a $95 annual fee that’s waived for the first year, and is offering a welcome bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months.

The card has the same annual fee as the Citi Premier℠ Card, but the bonus categories aren’t quite as good. The card offers double points on dining and travel, while the Citi Premier offers triple points on travel, and double points on dining and entertainment, so you’re likely to earn more points for purchases abroad.

The card offers excellent coverage, including primary collision damage waiver benefit (both within the US and abroad), which is great if you’re renting a car. If you use your card to pay for flights, you’ll also receive benefits like trip delay protection, lost and delayed baggage coverage, and more.


Earn double points on hotel stays

Other cards with no foreign transaction fees

Bottom line

I think the Citi Premier℠ Card and Chase Sapphire Reserve® are the winners when it comes to no foreign transaction fee travel rewards credit cards.

The Citi Premier has the benefit of being a Mastercard, and also offers bonus points on entertainment, which is a rare bonus category. The card also has a lower annual fee than the Chase Sapphire Reserve, and that fee is even waived for the first year.

Meanwhile the Chase Sapphire Reserve has the benefit of offering triple points on dining, which is a big category for many. For anyone who doesn’t have the Sapphire Reserve, the Sapphire Preferred is a good alternative.

Personally I can survive without a Chip & PIN card, but if that is something that’s important to you, consider the Barclaycard Arrival® Plus World Elite Mastercard®.

What’s your favorite travel rewards credit card with no foreign transaction fees?

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Comments

  1. When I was in Vienna a few years ago for birthday 32, I went to the opera to see Lohengrin, since I’d never seen live opera and I figure where and what better than Vienna and Wagner? Having forgotten that Wagnerian operas are long, and Lohengrin is a long Wagner opera, I tried to buy some wine during the first intermission. This was my last night in Vienna so I was low on cash, and they only took credit cards you could swipe with the carbon paper like it was 1982, so I ended up having to use my Freedom Unlimited to make it through the next four hours. A lot of the new metal cards don’t have the print raised enough for the carbon paper swiper things, which turns out to be more of an issue than one might expect.

  2. Hey Luck, could you do an in-depth article on Chip & Pin cards? Oh, and can U.S. issued, secondary PIN cards be used on European off-line terminals? Thanks.

  3. May be worth mentioning Capital One cards don’t charge foreign transaction fees for those who want to use a card that doesn’t have annual fees. VentureOne (not Venture) and Quicksilver are both good options for that.

  4. @Lucky, I usually select the foreign currency whenever I can, but since I signed up for fraud protection texts where I get a text from Chase every time a foreign transaction is done, I’ve noticed the immediate text I receive is already converted into USD. Am I still getting the more favorable rate or? Thanks!

  5. Amazing!!! Didn’t. Bother. Talking. About. Other. Cards. with no annual fee & no forex. Why? Because they don’t pay him.

  6. @Debit / @Eric

    Name drop them please. I thought this world has only 3 banks, AMEX, Chase, Citi . I never knew other banks exist.

  7. @Lucky

    You mentioned that the Barclays arrivals plus has chip and pin technology. Does the Barclays AAdvantage aviator red card also support this?

  8. PIN is stupid and outdated. It can’t increase the security. I can’t believe that Europe still use this dinosaur technology.
    Many countries started to use OTP to replace PIN transactions which is much safer than PIN.

    And Guys should remember that you always choose local currency rather than USD because DCC will charge you 5% more than you need to pay.

  9. The First Tech Choice Mastercard is a true chip-and-pin card that also has no foreign transaction or annual fees. It’s great for those automated kiosks. Unfortunately, its rewards program is pretty lame; but, this isn’t a card for general, widespread use.

  10. I think another consideration for a travel card is how they handle “fraud alert”: in my experience Capital One is the worst, constantly blocking transactions, Chase is next, followed by Citibank (better, if you are Citigold with VIP status) and best is AmEx… AmEx has never wrongly blocked a transaction in 20+ years, while the others have blocked “sketchy” merchants like the French government or one of the largest airlines in Asia…
    If you are traveling in premium cabin and luxury hotels, you probably don’t want to spend your time with off-shored call centers to unblock your card…

  11. Bank of America is the worst for “fraud alerts”. They’ll often block transactions and you have to respond to a text message saying the charge is yours and ask the merchant to run it again. And at least once a year, they’ll just cancel your card without notice and send a new one with a new account number.

  12. I have the ThankYou Premier and like its unique benefit of 3x on rail pass and taxi…etc.
    However it only gives 2x on purchases at restaurant, live entertainment, and tourist attractions.
    For $95 annual fee, it does not seem like the best deal. I may drop it and spend the extra $55 (after $300 annual credit) to get the CSR instead. CSR is really the best overall card for people who travel often. IMO the Uber Visa is the best no annual fee option (or Costco Visa for members) especially for people who do not travel a lot. The 4x on dining at international restaurants is Uber Visa’s best unique feature. That is only beaten by CSR’s 1.5x redemption on travel making it technically 4.5% for dining. So overall, I have not found a better long term card option than CSR.

  13. @Creditian: +100!!

    I don’t see how anyone would consider PIN technology as an advancement in transaction security. I marvel at those who herald that European as “getting it right” with their cards. To me, they are champions of an antiquated system only.

  14. @Tav – all Barclaycard cards offer pin capability. In addition to the Capital One cards I mentioned, the Uber Visa card is also a great option.

  15. @Creditian / @House

    You both really have no idea what you are talking about. Just to dumb it down for you, there are 2 important part to this for banks to allow the charge. 1. Do you have a real card 2. Are you the card owner. Chip verify 1. and Pin verify 2. (There is speed to but I’ll save that for another day)
    You mixed up OTP with online/offline transaction. For online, it is harder to verify 1. and 2. That is where OTP comes in to help verify 2. which should indirectly verify 1.

    “Many countries started to use OTP to replace PIN transactions which is much safer than PIN.” I call out BS, as I am not aware of any country that requires card+otp.

  16. Lucky, I’m surprised you only mentioned three cards, and nothing that rewards non-bonused spend. There’s always those miscellaneous purchases when you’re traveling, and you didn’t mention any no-annual-fee cards.

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