Traveling abroad can be an eye-opening experience: the culture, the food, the architecture… the credit card bill! Using a credit card when traveling can be a very convenient and useful practice, however, despite advances in international payment processing speed and security, many American banks still charge foreign transaction fees of 3 to 5 percent for purchases made outside the United States. If you're planning your next trip overseas, the cards on this list can save you a significant amount of cash, since none of these cards charge a foreign transaction fee.
Capital One Venture Rewards Credit Card
Capital One doesn't charge foreign transaction fees on any of its credit cards. That makes this bank's entire lineup of cash back cards and no annual fee accounts available for overseas use at no extra charge. If you prefer tracking down deals on discount booking sites instead of building status with a single airline or hotel chain, the Capital One® Venture® Rewards Credit Card offers a consistent, 2 miles per dollar on every purchase good toward any travel expense. With consistent use, you can earn much more per year in rebates than the cost of this card's modest annual fee. There is a $0 introductory annual fee for the first year; and a $59 annual fee after that.
Chase Sapphire Preferred
Chase's flagship rewards credit card ties your spending into the bank's Ultimate Rewards program, doubling points for travel and dining purchases while tripling points on airline tickets bought through the bank's booking system. Comprehensive roadside assistance and "global lifeline" benefits can help you survive major problems away from home. Chase offers an introductory annual fee of $0 the first year, then the card's moderate annual fee of $95 begins after the first year, while adding a 7 percent bonus reward dividend on your account's anniversary date. Although Chase offers other travel rewards cards with no foreign transaction fees, the Chase Sapphire Preferred® provides the most flexibility for rewards redemption throughout the year.
Citi Hilton HHonors Reserve Card
The Citi® Hilton HHonors™ Reserve Card lets Hilton HHonors members enjoy automatic Gold status and all of its associated perks. Complimentary internet access, late checkout privileges, and space-available upgrades can shave hundreds of dollars from your annual travel budget. Hilton's ten hotel brands include everything from roadside lodges to luxury resorts, making it easy to earn and redeem bonus points. In addition to generous bonus reward point offers, you can cut down trip planning time with help from Visa Signature's concierge and dining programs. Plus, with an embedded EMV chip, you'll enjoy added security and convenience when traveling in Europe.
PenFed Platinum Cash Rewards Visa
Pentagon Federal designed this card with military families in mind, but the Platinum Cash Rewards Visa makes sense for anyone who really likes to hit the road. With the Plus version of the card PenFed rebates a full 5 percent of your purchase price whenever you pay for gas at the pump. To qualify for the Plus Card you just need to obtain a qualifying PenFed product such as an active checking account with direct deposit ($250 min), or a money market savings account. The Plus Card has no annual fee. The Standard version of the card offers 3 percent cash back on purchases paid at the pump with an introductory annual fee of $0 the first year, then an annual fee of $25 after that. With both the Plus and Standard version of the card you can also enjoy no foreign transaction fee, and some strong travel insurance benefits, this card offers excellent value if you only make occasional trips outside the country. A relatively low variable APR and money-saving balance transfer offers make this a great addition to your portfolio. You must be a member of the credit union to submit an application for consideration for this offer.
Discover it Card
Discover consistently wins awards for customer service and fraud detection, two important concerns for overseas travelers. Over the years, customers and competitors have noted that fewer merchants accept Discover outside the United States, compared to Visa and MasterCard. However, Discover's partnerships with JCB and China Union Pay have expanded the brand's footprint throughout Asia. Strong outreach campaigns have likewise brought Discover to more merchants in major cities across Europe and South America. With a consistent cash back rebate, some compelling quarterly bonus opportunities, and a growing acceptance rate outside the United States, Discover it® could win its way into your travel wallet.
Regardless of which no-foreign-transaction-fee credit card you choose, you can maximize your travel experience by following a few key suggestions. First, concentrate your overseas expenses on a single card to maximize your card's fraud protection program. A mix of domestic and foreign charges on the same account while you're traveling can trigger a "false positive" and temporarily suspend your purchasing privileges.
Next, alert your bank of your itinerary in advance, so they can watch for potential fraudulent activity. A "skimmer" in Europe can quickly sell your card's details to accomplices back in the U.S. If your bank knows where you're really at, they can defend you from abuse. Finally, carry a backup credit card from another issuer with you, but not in with your primary card. That way, if you're pick-pocketed or if your wallet gets damaged, you can still make purchases while waiting for your primary card's replacement.
About the Author
Curtis Arnold, a nationally recognized consumer educator and advocate, has been educating consumers about credit cards since 1998. New! Curtis is the author of 'How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line' (FT Press, 2008). He is also the co-author of the upcoming Complete Idiot's Guide to Person-to-Person Lending (Alpha Books/Pengiun Group USA, April 2009), a contribitor to The Ultimate Allowance (InnerWealth Publishing, 2008) and is extensively featured in 42 RulesTM for Driving Success With Books (Super Star Press, January 2009).