No Foreign Transaction Fee Credit Cards

Using a no foreign transaction credit card on the Visa or MasterCard network is the cheapest, most convenient way to convert currency. In fact, such a card will save you up to 11% compared to exchanging hard currency at a local bank or airport kiosk, according to WalletHub’s latest Currency Exchange Study. And you don’t have to do anything special to benefit. Credit cards automatically convert the cost of an international purchase to U.S. dollars.

Credit cards provide other benefits to international travelers, too. For example, all credit cards have $0 fraud liability guarantees. That means you won’t have to pay for any unauthorized purchases. In contrast, if a pickpocket takes cash from you, that money is gone. Most credit cards also offer both travel insurance and rental car insurance, while 50% of cards provide financial assistance for international-travel emergencies.

So you might want to double-check that you have a credit card with no foreign transaction fee before your next international trip or purchase. The vast majority of credit cards still charge foreign transaction fees, according to WalletHub data. The average foreign fee is 1.97%.

You don’t need a special type of credit card to make purchases abroad. Whether a credit card will work in a given country depends solely on which of the four card networks it belongs to: Visa, Mastercard, American Express or Discover. Visa and Mastercard are accepted practically anywhere a credit card can be used worldwide. American Express and Discover lag well behind.

The only situation in which you might encounter some difficulties is when trying to use a U.S. credit card at certain vending machines and automated kiosks while traveling abroad. But that problem is easily solvable with a no foreign transaction fee debit card, which you can use to pay in cash.

Chip-and-pin credit cards use the combination of an embedded computer chip and a Personal Identification Number (PIN) to improve fraud protection. Basically, a cardholder must input a PIN when making a purchase. And that PIN must match data stored on the card’s secure microchip for the transaction to go through.

Chip-and-PIN cards are now the standard in Europe, Canada and Japan because they are much harder for fraudsters to copy or steal than magnetic-stripe credit cards, which have long been used in the U.S. And U.S. credit card companies are steadily rolling out chip-based cards for the same reason. But most U.S. chip cards use signature verification instead of a PIN. You can check out WalletHub’s article on the differences between chip-and-PIN and chip-and-signature cards to learn more.

The moral of the story, however, is that you should be fine with any “normal” credit card, as long as it’s a Visa or Mastercard with no foreign transaction fee. Sure, transactions made at unattended automated kiosks, such as those in train stations, may necessitate a chip-and-PIN card. But you can get around that by simply packing a no foreign fee debit card and withdrawing cash as needed.

Taking the following credit-card precautions will help you save money and avoid unnecessary hassle while abroad.

1. Get a no foreign transaction fee credit card. Do this before booking flights, hotels, etc. Foreign transaction fees will be assessed on any purchase made through a foreign merchant, even before you leave the U.S.


2. Call your credit card company. Most credit card companies require you to notify them of international travel plans. If you don’t, your account may be suspended due to suspicions of fraud. Capital One and American Express are the only major issuers that automatically detect when you’re traveling.


3. Know your info. Write down your account number as well as your credit card company’s phone number, and keep this information somewhere safe (not in your wallet). If your card gets lost or stolen, you’ll need both to get a replacement.


4. Don’t forget ID. Some countries may require identification to authorize a U.S. credit card transaction. So don’t forget your passport when you go shopping abroad.


5. Pay in the local currency. Decline any merchant’s offer to convert prices into U.S. dollars. This could be a trick known as dynamic currency conversion, which merchants often use to assess high exchange rates and line their pockets.

Whenever you travel abroad, it’s a good idea to have cash. While the level of importance obviously depends on how developed the country you’re visiting is (the more developed, the more merchants that accept international credit cards), it’s inevitable that you will find yourself needing to make at least a few cash-only purchases (e.g. cab fare). So what’s the best way to go about getting it? Well, for starters, do not even consider using a credit card for a cash advance, as this will be very expensive, in light of the cash advance fee and APR. Your best options are a debit card or an ATM card. As these cards also come with foreign transaction fees, it pays to shop around before opening one.