Cards that charge zero percent on purchases abroad
Most travel rewards cards and some premium cash-back cards don't charge foreign transaction fees — typically 1% to 3% of what you spend. The catch is that these cards usually cost money to own: annual fees range from $95 to $550, so the savings only matter if you travel enough to offset the cost.
A smaller group of no-annual-fee cards also waive foreign transaction fees, though they tend to offer fewer rewards points per dollar spent. The trade-off is straightforward: pay nothing to carry the card, earn less on every purchase, or pay an annual fee and earn more.
Which path makes sense depends on how much you spend abroad each year. If you charge $5,000 on a trip and your card charges 2% in foreign fees, that's $100 gone. A $95 annual fee card pays for itself in that single trip. A no-fee card saves you the $100 but might earn you 1% cash back instead of 2%, costing you $50 in rewards you didn't get.
Key Takeaways
- Travel rewards cards with annual fees ($95 to $550) typically offer no foreign transaction fees and higher rewards rates, making them worthwhile if you spend more than $3,000 to $5,000 abroad per year.
- Some no-annual-fee cards waive foreign transaction fees entirely, though they usually earn lower rewards rates (0.5% to 1% cash back) than premium cards.
- Foreign transaction fees are charged by your card issuer, not by the merchant or your bank, and explore to any purchase made outside the United States in a foreign currency.
- The best card for you depends on your annual spending abroad: calculate your typical foreign purchases and compare the annual fee against the fees you would otherwise pay.
How foreign transaction fees work and who charges them
When you use a credit card outside the United States, the card issuer (Chase, American Express, Capital One, Citi, and so on) converts your purchase from the foreign currency to US dollars. Most issuers charge a percentage of that converted amount — usually 1% to 3% — as a foreign transaction fee. This is separate from any currency conversion markup the merchant or payment network applies.
The fee appears on your statement as a line item, often labeled "foreign transaction fee" or "international transaction fee." It is charged whether you're in Canada, Mexico, Europe, or anywhere outside the US, and it applies to online purchases from foreign merchants too — not just in-person spending.
Debit cards and prepaid cards often charge foreign transaction fees as well, but this guide focuses on credit cards, where the fee structure is most transparent and where rewards can offset the cost.
Travel rewards cards with no foreign transaction fees
Premium travel cards are built for people who spend thousands abroad each year. They waive foreign transaction fees, earn 2% to 5% cash back or points on travel purchases (flights, hotels, rental cars), and often include travel insurance, airport lounge access, and statement credits for incidental travel costs.
Examples include the Chase Sapphire Preferred ($95 annual fee), the American Express Platinum ($695 annual fee), and the Capital One Venture X ($395 annual fee). Each has different earning rates and benefits, so the right card depends on what you spend on and how you travel.
These cards make financial sense if you spend at least $3,000 to $5,000 per year on travel and dining combined. Below that threshold, the annual fee usually costs more than the foreign transaction fees you would pay on a no-fee card.
No-annual-fee cards that don't charge foreign transaction fees
A smaller set of cards waive both the annual fee and foreign transaction fees. These are harder to find because issuers typically reserve fee waivers for cards that generate revenue through higher spending or premium positioning.
Examples include the Citi Prestige (though it has a $495 annual fee, it includes a $250 travel credit that can offset cost), some regional bank cards, and occasionally limited-time offers from major issuers. The trade-off is that these cards usually earn 1% cash back on all purchases or 1.5% on specific categories, compared to 2% or higher on premium cards.
If you travel occasionally but don't spend enough to justify an annual fee, a no-fee card with no foreign transaction fees is worth comparing. The lower earning rate costs you less than paying foreign transaction fees on every purchase.
Cards that do charge foreign transaction fees
Most standard cash-back and rewards cards charge foreign transaction fees. This includes popular no-annual-fee cards like the Chase Freedom Unlimited (1.5% cash back, but 3% foreign fee), the Capital One QuickSilver (1.5% cash back, 3% foreign fee), and the Discover it (1% cash back, 1% foreign fee).
These cards are excellent for everyday US spending, but using them abroad costs you. On a $1,000 purchase, a 3% foreign fee is $30 — money you don't get back in rewards. If you travel regularly, even a few trips per year can add up to hundreds in fees.
If you already own one of these cards and travel occasionally, it's worth opening a second card specifically for foreign spending. You don't need to close the first card; you just use the no-fee card when you're abroad.
How to choose between annual-fee and no-fee options
Start by estimating your annual spending abroad. Include flights, hotels, meals, shopping, and any other purchases you make outside the US. Be realistic — if you take one international trip per year, that's your baseline.
Next, calculate what you would pay in foreign transaction fees on a standard card. If you spend $4,000 abroad and your current card charges 2%, that's $80 per year in fees. A $95 annual-fee card costs $15 more but earns you higher rewards, which can offset the difference.
If your spending is under $2,000 per year, a no-annual-fee card with no foreign transaction fees is usually the better choice. If you spend $3,000 or more, a premium travel card often pays for itself through fee savings alone, before you count the rewards points.
Other factors that matter when comparing cards
Foreign transaction fees are only one piece of the decision. Consider the rewards rate on the categories you actually spend in. If you eat out frequently while traveling, a card that earns 3% on dining is more valuable than one that earns 1% on everything. If you book hotels through a specific chain, some cards offer bonus points with that chain.
Travel insurance is another factor. Premium cards often include trip cancellation insurance, baggage delay reimbursement, and emergency medical coverage abroad. These benefits can save you hundreds if something goes wrong, and they're not available on most no-fee cards.
Sign-up bonuses matter too. A card with a $95 annual fee might offer 50,000 bonus points worth $500 to $750 in travel value. That bonus can cover several years of annual fees if you redeem the points strategically.
Frequently Asked Questions
Do I have to use the card in the foreign country, or does it explore to online purchases from foreign websites too?
Foreign transaction fees explore to any purchase made in a foreign currency, whether you're physically in that country or buying online from a foreign merchant. If you order from a UK website in British pounds, your US card issuer will charge a foreign transaction fee even though you're sitting at home. Purchases from US websites, even if the company is international, typically don't trigger the fee.
Can I avoid the fee by asking the merchant to charge me in US dollars?
Some merchants offer this option, called dynamic currency conversion. However, the merchant's conversion rate is usually worse than your card issuer's rate, so you often pay more in total. It's usually better to let your card issuer handle the conversion and pay the foreign transaction fee if you have one, rather than accept a poor exchange rate from the merchant.
Do travel rewards cards earn points on the foreign transaction fee itself?
No. The foreign transaction fee is a separate charge, and you don't earn rewards on fees. You earn rewards on the purchase amount before the fee is added. So if you spend $1,000 and pay a $20 fee, you earn rewards on $1,000, not $1,020.
What if I have a card with a foreign transaction fee but I'm traveling soon?
You have time to open a new card before your trip. Most cards arrive within 7 to 10 business days, and you can use them when ready once they arrive. If your trip is sooner than that, you can request expedited shipping when you open the account. Alternatively, you could use a different payment method for that trip — some debit cards and travel money cards also waive foreign fees.
Do all premium travel cards have the same foreign transaction fee policy?
Most premium travel cards waive foreign transaction fees, but it's worth confirming before you open an account. Read the card's terms and conditions or call the issuer's customer service line. Some cards waive fees for the cardholder but charge them for authorized users, so check that detail if you plan to add family members to your account.