Credit Cards For International Travel

A foreign transaction fee is the surcharge applied to a credit card purchase that is processed outside of the United States. You may encounter foreign transaction fees when traveling abroad or when buying something from an international merchant (even if you’re in the U.S.).
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The average credit card charges a foreign transaction fee equal to 1.76% of every international purchase. But there are a growing number of no foreign transaction fee credit cards available, fortunately.
Foreign transaction fees are the most common type of international credit card fee.

There can be fees for international credit card use. But they’re avoidable if you make the right moves, starting with picking the right credit card. Foreign transaction fees are the main concern. Nine in 10 credit cards charge them. But since WalletHub tracks 1,000+ credit cards, we’ve got plenty of no foreign fee cards for you to consider.
Furthermore, you need to watch out for:

• Dynamic Currency Conversion – This isn’t really a fee, but it could cost you money. In short, you should turn down any merchant’s offer to convert prices into U.S. dollars. They may be doing it just as an excuse to charge a high exchange rate.

• International ATM Fees – These will only come into play if you try to perform a cash advance internationally. And there’s no reason to do so if you bring an international debit card on your trip.

In addition, if you decide to convert hard currency at a local bank or airport kiosk, you’re going to lose a lot to fees and high exchange rates. So try to use plastic for as much as possible when traveling abroad. In particular, a Visa or Mastercard with no foreign fee can save you up to 9% on currency exchange.
Finally, if you choose a card that doesn’t offer rental car insurance or general travel insurance, you could be playing with fire.

There is one Visa exchange rate for every type of currency, which can change once every 24 hours. And that rate is automatically applied to any international transaction made with a Visa credit card or debit card. You can easily check the latest Visa exchange rates online to get an idea of what to expect when traveling.

Here’s how to see your Visa exchange rate:

1. Go to Visa’s online Exchange Rate Calculator.

2. Select United States Dollar for your card’s currency.

3. Select the currency used by the merchant.

4. Enter your bank fee (foreign transaction fee), if applicable. Ideally, you should use a no foreign transaction fee credit card.

5. Put in today’s date (the tool can’t predict the future).

6. Click “Calculate Exchange Rates.”

Using a no foreign transaction fee Visa credit card when traveling abroad will save you up to 9% compared to converting hard currency, according to WalletHub’s Currency Exchange Study. But a Mastercard will do the trick, too. There’s actually not much difference between the exchange rates offered by these two worldwide card networks.

Lastly, you should always avoid Dynamic Currency Conversion (DCC). This is when a foreign vendor converts the price of a purchase to U.S. dollars, supposedly for your convenience. But that gives the merchant a chance to use an unfavorable exchange rate in place of the low rate you’d automatically get from Visa.

It’s a good idea to get an international debit card before traveling abroad. You won’t be able to use plastic for every purchase. So you’re going to need some cash. And while you could convert hard currency at a bank or airport kiosk, both options are far more expensive than using a Visa or Mastercard debit card to withdraw cash as needed.

You just need to find one with no foreign transaction fee and a low international ATM fee. In general, an ATM fee below 1% is a pretty good deal.

The American Express foreign transaction fee is 2.7% for all the cards that charge it. But there are plenty of American Express cards with no foreign transaction fee. Those cards tend to be your best options for travel.

In case you’re unfamiliar with foreign transaction fees, they’re a surcharge you have to pay for using your credit card at a foreign merchant, usually 1%-3% of the purchase price. That can really add up, especially since Amex’s 2.7% foreign fee is on the higher end of the spectrum.

Here are the American Express foreign transaction fees:

• American Express cards with a foreign transaction fee charge 2.7%.
• Amex foreign transaction fees apply when you buy things abroad OR shop at foreign merchants online.
• Many American Express credit cards have no foreign transaction fees. They include Amex Platinum and Premier Rewards Gold, the PenFed Premium Travel Rewards card, and the Amex cards affiliated with Starwood, Hilton and Delta.

If you’re looking for an international credit card, it’s best to get one with no foreign transaction fee, and American Express does have a good selection. But American Express cards aren’t accepted by nearly as many foreign merchants as Visa and Mastercard. So you may find yourself somewhere your Amex won’t work. And that’s why it’s probably better to have a Visa or Mastercard for travel.