Earlier I cautioned readers about foreign currency credit card fees.
Not surprisngly, I later started to hear from many of you wondering…what are the best credit cards for traveling abroad?
CAPITAL ONE
Capital One credit cards are unique in that none of them charge a foreign currency transaction fee. That said, several readers have pointed out to me that Cap One’s currency conversion rate is not be as favorable as other credit cards, which dilutes the benefits to not charging the fee. Still, fee-free cards like the Capital One Venture card may be worth considering.
To move up to other cards well-suited to travel abroad, you’ll have to choose a card with an annual fee.
AMERICAN EXPRESS
American Express credit cards (link is to another site I run) are noted for the special support they can give cardmembers traveling abroad, and all Amex cards charge between one and two percent less than other card companies for foreign transactions.
Then, for those who can afford the $450 annual fee, The American Express Platinum Card is probably the ultimate jet setter’s credit card. The Platinum Card has NO foreign currency transaction fee, offers 24/7 concierge service, gets you in to many airline lounges for free, and will even arrange for a private jet to fly you home…free…if you get sick or hurt traveling abroad. So if you’re cashing in your trust fund to globe trot in style for a few years, this is your card.
CITI THANK YOU PREMIER
For the rest of us, the new Citi ThankYou℠ Premier Card has a fee of only $125 (and it’s free for the first year) and also offers no foreign currency transaction fee. There are also other perks like a free annual domestic companion ticket, 1% rewards with no limit, and up to $300 in gift cards after you spend $2,000 in the first three months after account opening. There’s also the fact that Visa cards are more widely accepted than Amex (and this becomes even more important outside the states).
CHASE SAPPHIRE PREFERRED
As of May 2011, if I had to pick one credit card to recommend for those interested in travel aboard, it would be the Chase Sapphire Preferred Card. For a $95 annual fee (waived the first year), you get no foreign transaction fee, the global acceptance of Visa/Mastercard, a good travel rewards program, and 24/7 concierge service. Plus, right now Chase is offering 50,000 bonus points for new card members if you spend $3,000 on the card in the first three months (redeemable for $625 worth of travel).
Learn more or apply for the Chase Sapphire Preferred card here, or read more in this review of the Sapphire credit cards.
One Note
If you’re just heading overseas for a week or two, you probably don’t need a special credit card. If you’re travelling abroad frequently or for several months, then you might consider it. Whatever you do, check with your existing credit card companies and bank to learn their fees on foreign transactions before you go, and just try to stick with the cheapest method. Typically withdrawing cash at an ATM or using your credit card will be less costly than using money changers.
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If you have AMEX Costco card you get 2% cashback for travel charges…so really it cancels out the fee.
I would caution anyone using a capital one card for foreign travel…they may not charge a foreign transaction fee, but, if you need to access their investigative solutions for any financial disputes abroad, they are non-existent. We had an issue in Mexico that they have repeatedly avoided assisting us on. They use what should be considered exploitive customer service tactics for a service they tout as “protection abroad”.
Thanks for the word of caution.
I also want to add another word of caution on Capital One’s “no foreign transaction fees.” I just got back from Belize and used my Captial One Visa while there. I noticed the conversion was about 1% more than the actual cost.
So, Capital One does have an unofficial 1% foreign transaction fee.
Every review says that Capital One aborbs the 1% fee that VISA/MASTERCARD charge, so not sure what you mean.
Technically, they do. But their conversion rate turns out to be 1% higher than the actual conversion. So your purchase will be 1% more expensive paying with the credit card rather than paying with cash.
I’ve read the same holds true for Charles Schwab’s debit card that has no foreign transaction fee.
I can understand a fee for transferring from pesos to dollars but we bought a timeshare in Mexico in dollars and we were still charged a transaction fee.
What is this for? This was a simple on-line transaction. BofA would not back down on waiving this so we are going to Capital One.
PenFed (Pentagon Federal Credit Union) has the Promise Visa with no Fees, including no Foreign Transaction Fees. It works really well and has no annual fee, but you have to be a member or pay the 15$ entrance fee. I also take along an AmEx just in case I need their services. However, the last time I called to tell them I was leaving the country, AmEx told me I no longer had to inform them I would be using the card outside the country. I think I find this a little more disconcerting than convenient.
AmEx told me this, too….and the next time I traveled out of the country and tried to use it, it was declined. I had to call them and get them to lift the fraud freeze on the account.
Under The Citi ThankYou℠ Premier Card you refer to it as being a Visa. This card is actually a Citi Amex card or at least it is for me.
We are traveling to Japan in February for 4 years. Most of our spending will be on a US Air Base. Would the foreign transaction fees apply still?