A credit card conversion fee, more commonly called a foreign transaction fee, is an extra charge by your credit card issuer for processing a transaction with a foreign merchant. It’s usually 1%-3% of what you spend. And while most credit cards do charge a conversion fee, there are a lot of great options that don’t. If you’re planning to travel abroad, it’s a good idea to get a “no foreign transaction fee credit card” in order to avoid an extra charge for paying by card at a foreign merchant.
Here are some of the best credit cards with no conversion fee:
Big Bonus:Chase Sapphire Preferred® Card – 80,000 points initial bonus (worth $750 in travel) for spending $4,000 in the first 3 months. 2 points / $1 on travel and dining and 1 point / $1 on everything else. $95 annual fee. Requires good credit.
All-Around Travel Rewards:Citi Premier® Card – 60,000 points initial bonus (worth $600 - $750) for spending $4,000 in the first 3 months. 3 points at air travel, hotels, gas stations, restaurants and supermarkets, and 1 point per dollar on all purchases. $95 annual fee. Requires good credit.
Study Abroad:Bank of America® Travel Rewards Credit Card for Students – 25,000 points initial bonus for spending $1,000 in the first 90 days. 1.5 points per dollar on all purchases, 3 points per dollar at BoA Travel Center. $0 annual fee. Can get approved with limited or no credit.
Bad Credit:Secured Mastercard® from Capital One – One of the few secured cards that can be partially secured, giving you a credit line larger than your security deposit: deposit of $49, $99 or $200 for a $200 spending limit. $0 annual fee. Can get approved with bad credit.
Capital One VentureOne offers a 20,000-mile bonus for spending $500 in the first 3 months. It also rewards cardholders with 1.25 miles per $1 spent, on all purchases. With the HSBC Cash Rewards card, you get 3% cash back on all purchases, up to $10,000 spent in the first 12 months, and 1.5% cash back after that. … read full answer
That said, the best credit card with no annual or foreign fees really depends on your credit standing and what type of rewards or other features you’re looking for. Fortunately, there’s a whole range of attractive possibilities.
Best Credit Cards with No Annual Fee and No Foreign Transaction Fee
You can avoid foreign transaction fees by getting a credit card that doesn’t charge them. Considering that about 25% of current credit card offers don’t charge foreign fees, and those cards are available to people of all credit levels, there’s really no reason to pay these fees. The 10 largest credit card companies all offer at least some cards without foreign transaction fees. And some, like Capital One, Discover, USAA, HSBC and PenFed, don’t charge foreign transaction fees on any of their credit cards.… read full answer
Foreign transaction fees tack on as much as 4% extra to purchases made abroad, which can truly dampen a vacation. Foreign transaction fees aren’t charged by the merchant; they’re charged by the credit card company. And the fees are also charged for online purchases processed abroad, even if you’re sitting in front of your computer at home when you make the purchase. If you’re using a rewards card for purchases abroad, a foreign transaction fee will quickly negate the rewards you’re trying to rack up. The fees are declared in all credit card terms, so make sure you look for that language when you’re applying for credit cards.
That said, if you already have a credit card that charges foreign transaction fees, there’s not much you can do to avoid them, save for not using the card abroad. Consider applying for a travel credit card with good ongoing rewards and no foreign transaction fees. There are plenty to choose from.
One last thing to think about regarding foreign transaction fees: Don’t forget to find the right debit card for your travels. Many debit cards also charge foreign transaction fees and international ATM fees. But having a debit card while abroad is important, as it will allow you to get cash when you need it, which is far cheaper (and safer) than converting money at airports or banks. So make sure to bring a Visa or Mastercard debit card with a low international ATM fee and no foreign transaction fees when you head out of the country.
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