Which Credit Card Is Best When Traveling Abroad?

Many credit cards charge a foreign transaction fee when the card is used outside the United States. These fees are usually between 2% and 3% of each purchase, but luckily, there are more and more cards doing away with this fee. The fee typically includes a conversion fee of 1% that is charged by international MasterCard and Visa networks for overseas purchases. In addition, most U.S. banks add their own fee which is where the total 2% to 3% fees come from.

These fees can add up quickly when traveling abroad. If you are a frequent traveler you should consider using a card that does not charge this fee because it will save you money. Below we have a list of cards that do not charge a foreign transaction fee.

Best Cards for International Travel

Card Offer
Annual Fee
Perks
Platinum Card from American Express$450Earn 25K Membership Rewards® points when you spend $2,000 during your first three months of Card membership
Hyatt Card from Chase$752 Free Nights at Hyatt properties worldwide, after spending $1,000 in the first 3 months from account opening with the Hyatt Credit Card
Discover® Open Road Card$02% automatically at gas stations and restaurants all year long
Escape by Discover® Card$60Earn up to $250 in travel rewards--1,000 Bonus miles every month you make a purchase for the first 25 months
Miles by Discover® Card$0Earn up to $120 in travel rewards--1,000 Bonus miles every month you make a purchase for the first year
Discover® More® Card$05% Cashback Bonus® in categories that change throughout the year
Discover® Motiva Card$0Earn Cashback Bonus® for your good credit management
Discover® Student More Card$05% Cashback Bonus®* in categories that change throughout the year
Discover® Student Open RoadSM Card$02% Cashback Bonus®* at gas stations and restaurants
PenFed VISA Platinum Gas/Cash Rewards Card$0Earn 5.00% cash back from gas purchases paid at the pump*
PenFed Premium Travel Rewards American Express® Card$05x points on airfare purchases and 1x points on all other purchases

Here are more details on the fees charged by each card issuer:

  • Discover: 2% of the U.S. dollar amount of each purchase made in a foreign currency
  • Citi: 3% of the U.S. dollar amount of each purchase made outside the U.S
  • Chase: 3% of the U.S. dollar amount of the transaction, whether originally made in U.S. dollars or converted from a foreign currency.
  • Bank of America: Transaction Fee for any transaction made in a foreign currency and any transaction made in U.S. Dollars that is processed outside the United States: 3% of the U.S. Dollar amount of each such transaction.

Credit card charges, U.S. dollars

Occasionally, a foreign merchant will charge you in U.S. dollars rather than in the local currency. Banks are inconsistent in their treatment of such charges: Bank of America and Citibank add the same conversion fee regardless of the currency, but American Express and Chase do not surcharge dollar billings.

Although dollar billings might seem a good idea—at least in some cases—you have to be aware of a possible scam: The merchant may use a lousy exchange rate when it converts your bill into US dollars, so you might end up paying both a merchant’s private currency markup in addition to a surcharge. the solution to this would be to avoid any billing in dollars.

Withdrawing from An ATM Overseas

Until recently, the only extra charge you paid was a flat fee for each withdrawal from a foreign ATM, regardless of the amount of money you received. Lately, however, some big banks have added a conversion surcharge. This is something you should find out about before using your card at a foreign ATM so you don’t have any surprise charges.

Other Factors When Deciding Which Credit Cards to Take Abroad

When traveling overseas, the foreign currency transaction fee is one consideration when deciding what credit cards to take with you. But there are several other this to keep in mind.

  • Always Take a Visa or MasterCard: Discover is not accepted in many places overseas, and neither is American Express. Because Visa and MasterCard charge lower interchange fees, among other reasons, they are accepted virtually everywhere. The last thing you want is to be overseas and not have a card that can be used when need. So always take a Visa or MasterCard.
  • Take an American Express: I always take my Gold Amex as well. While it’s not accepted in as many places as Visa or MasterCard, its travel services are unparalleled. Amex can help you in a pinch in many, many ways.
  • Cash Back: While the foreign transaction fee is important, consider all of the benefits each card has to offer. For example, maybe the card you want to use has a foreign transaction fee but the card gives you cash back on your purchases. Even paying a 2% transaction fee you might still come out ahead if you are earning cash back.
About Michal Cheney

Michal Cheney is a personal finance blogger who writes for several top personal finance blogs, such as Dough Roller and Go Banking Rates. She enjoys writing about money management, getting out of debt and planning for retirement. Her practical approach encourages folks to get serious about their relationship with their money.