When traveling abroad, credit cards are a fairly safe way to spend money due to certain protections that might be in place. However, there is one little catch to using a credit card abroad, and that is the foreign transaction fee.
The foreign transaction fee is taken as a percentage of the transaction. It is charged by the credit card company. The most common amount is 3 percent, and some companies offer a 2.7 percent fee. That percentage rate is charged on every foreign transaction that is made.
Beginning in 2014, many credit card companies started letting go of the foreign transaction fee, but there are some companies that just won’t let them go. Those cards are outlined below.
Credit Cards With Foreign Transaction Fees
American Express Blue Cash Preferred
The American Express Blue Cash Preferred card has a foreign transaction fee of 2.7 percent. The card also has an annual fee. However, it gives 6 percent cash back, which is a very high cash back percentage compared to other credit cards. If you weight the cash back against the transaction fee, then you come out positive, albeit with reduced rewards.
Bank of America
Bank of America cards don’t necessarily have annual fees or origination fees, but they occasionally have a one to three percent foreign transaction fee depending on the card. The BankAmericard Travel Rewards credit carddoesn’t have a foreign transaction fee. The Alaska Airlines Visa Signature credit card also doesn’t have a foreign transaction fee.
Most Barclaycard credit cards don’t have a foreign transaction fee, but a regular Barclaycard has a fee of 2.99 percent when used on non-sterling transactions. The fee can vary based on the location and the transaction type, which is outlined on the back of the credit card statement.
Other than the transaction fee, Barclaycard keeps the fees to a minimum. If you make transactions abroad, you have a 56-day, interest-free period as long as payments are made on time each month.
Chase Slate has no annual fee, but it does have a 3 percent foreign transaction fee. The same applies to Chase Freedom Unlimited, Chase Freedom, and Disney Rewards Credit Cards. Chase credit cards that have annual fees are typically among those without foreign transaction fees. Chase also tends to have great introductory credit card offers, such as no interest for a year or more.
Citibank is slowly but surely eliminating foreign transaction fees on its credit cards. The most recent to see the fee removed is the Costco Anywhere Visa. On the cards that do have a fee, it’s 3 percent of the transaction amount.
Some US Bank cards have a foreign transaction fee, and there are some that don’t. US Bank states that people should review the cardmember agreement for the card they are interested in to determine if there is a foreign transaction fee or contact cardmember services to see which cards have fees. We do know that the US Bank FlexPerks Travel Rewards card doesn’t have a fee. For those that do, the fee is 3 percent of the transaction if it is in a currency other than the U.S. Dollar.
Wells Fargo also charges a fee of 3 percent on the cards that have foreign transaction fees. The Wells Fargo Platinum card is an example. However, there’s no annual fee and a no-interest introductory rate for 15 months. It’s a rather cut-and-dry card with no surprises or fees outside of the usual for a card that targets people with excellent credit.
Are Foreign Transactions Fees on Their Way Out?
All in all, foreign transaction fees are being phased out over time, but there are still some out there. Many times, it is a matter of making a choice between paying an annual fee or paying a foreign transaction fee. What you should do depends on how much you travel. It’s also reasonable to expect subprime credit cards to have foreign transaction fees, but these cards most likely have origination and annual fees as well.
Author: Jeff Gitlen
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