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How to choose a no-foreign-transaction-fee credit card

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If you’re a frequent traveler, you know that credit card foreign transaction fees can add up — and become one of the most annoying aspects of making purchases abroad.

Foreign transaction fees are incurred when your credit card issuer processes a transaction you’ve made in another country. They can cost up to 3% of your purchase amount.

Luckily, there’s a long list of credit cards that don’t charge foreign transaction fees. In fact, Discover and Capital One don’t charge foreign transaction fees on any of their cards.

Here’s our guide to finding a no-foreign-transaction-fee credit card that works for you.

How to choose a no-foreign-transaction-fee credit card

Consider where you’re traveling

First things first: You want to make sure the credit card you’re looking at is accepted in the country (or countries) you’re planning to visit. All your advanced research will become moot if you reach your destination and discover that you can’t use your card.

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For example, Visa cards are accepted worldwide, while issuers like Discover are often limited outside North America.

Determine your overall goals

You need to determine whether your main priority is to earn travel rewards, rack up cash back or pay off a card balance.

As mentioned, the list of cards that don’t charge foreign transaction fees is long. You’ll want to narrow down your options by deciding what type of card makes sense for you; it might be a premium travel rewards card, a no-annual-fee cash-back card or something in between.

For example, a premium rewards card would make the most sense if you plan a lavish 10-day trip across a continent. Or, if you’re an infrequent traveler hopping to another country for a couple of days, look for a more cost-effective, no-foreign-transaction-fee card.

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Compare welcome offers

Once you have a general idea of the type of card you want, you can narrow your choices by comparing different benefits, such as the current welcome offers on the cards you’re considering.

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A generous welcome offer can greatly enhance a card’s value. Or, you may be willing to compromise on the welcome offer for a card with a lucrative travel rewards program. It’s all what you make it.

To help, TPG has a guide that tracks the welcome offer history on some of the most popular travel cards on the market. It can help you figure out the best time to apply for a specific card.

Bottom line

There are plenty of no-foreign-transaction-fee credit cards on the market. By considering a few basic factors, you can find a card that will give you plenty of value, whether you’re traveling abroad or staying at home.

Related: Foreign transaction fees: Everything you need to know



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