Cards that charge zero percent on purchases abroad
Several major credit card issuers offer cards with no foreign transaction fee — meaning you pay no extra percentage on top of the purchase price when you use the card outside the United States. The cards that do this include the Chase Sapphire Preferred, American Express Platinum, Capital One Venture X, and Citi Prestige, among others. Most of these cards charge an annual fee, typically between $95 and $695, so the no-fee benefit is part of a broader rewards or travel-focused package rather than a standalone offer.
A foreign transaction fee is normally 1 to 3 percent of the purchase amount, charged by the card issuer on top of whatever the merchant charges. If you spend $1,000 abroad on a card with a 2 percent foreign transaction fee, you pay an extra $20. Cards without this fee save that money on every transaction outside the U.S., which adds up quickly if you travel frequently or make regular purchases from international merchants online.
The absence of a foreign transaction fee does not mean the card has no cost to use abroad. You will still pay the exchange rate that your card issuer sets, which may be slightly higher than the mid-market rate. You may also pay other fees — some cards charge fees for cash withdrawals at foreign ATMs, or for balance transfers. Always check the card's fee schedule before you travel.
Key Takeaways
- Cards with no foreign transaction fee include Chase Sapphire Preferred, American Express Platinum, Capital One Venture X, and Citi Prestige, though most charge annual fees between $95 and $695.
- A foreign transaction fee is typically 1 to 3 percent of the purchase amount, so a card without this fee saves money on every transaction you make outside the U.S.
- No foreign transaction fee does not mean no cost abroad — you still pay the card issuer's exchange rate, which may be higher than the mid-market rate.
- Some cards without foreign transaction fees still charge fees for ATM cash withdrawals or other services abroad, so check the full fee schedule before traveling.
How foreign transaction fees work
When you use a credit card outside the United States, the card issuer converts the foreign currency to U.S. dollars. The issuer charges a foreign transaction fee as a percentage of that converted amount. Most cards charge between 1 and 3 percent; some charge as low as 0.5 percent, and a few charge nothing at all.
The fee applies to any purchase made in a foreign currency, including online purchases from merchants based outside the U.S. If you buy something from a U.K. retailer while sitting in the United States, you will likely still pay the foreign transaction fee because the transaction is in British pounds. The fee also applies to ATM withdrawals abroad, though some cards charge a separate ATM fee on top of the foreign transaction fee.
The exchange rate itself is separate from the foreign transaction fee. Even on a card with no foreign transaction fee, the issuer sets the exchange rate it uses to convert the foreign currency to dollars. This rate is usually slightly higher than the mid-market rate (the rate you see on financial news sites), which is how the issuer makes money on the conversion. You cannot avoid this markup, but you can avoid the foreign transaction fee by choosing the right card.
Cards with no foreign transaction fee and their annual costs
The cards most commonly offered without a foreign transaction fee are premium travel cards that charge annual fees. Here is what to expect:
Chase Sapphire Preferred charges $95 per year and earns 2 points per dollar on travel and dining, 1 point per dollar on everything else. American Express Platinum charges $695 per year and offers points on flights and hotels, plus hotel elite status and other travel perks. Capital One Venture X charges $395 per year and earns 10x points on hotels and rental cars booked through its portal, 5x on flights booked directly, and 1x on everything else. Citi Prestige charges $495 per year and earns 3x points on travel and dining, 1x on everything else.
Some issuers also offer no-annual-fee cards without a foreign transaction fee, though these are less common. Charles Schwab Bank Investor Rewards is a debit card, not a credit card, but it reimburses all foreign ATM fees and has no foreign transaction fee. For credit cards specifically, options are limited at the no-fee tier, so most people who want to avoid foreign transaction fees end up choosing a card with an annual fee and using it enough to justify the cost.
When a no-foreign-transaction-fee card makes financial sense
A card with an annual fee only saves you money if you spend enough abroad to offset that fee. If a card charges $95 per year and has no foreign transaction fee, you need to spend roughly $5,000 abroad at a typical 2 percent foreign transaction fee rate to break even. If you spend less than that, you would be better off using a card with a foreign transaction fee and no annual fee.
The math changes if the card offers other benefits you would use anyway. If you travel frequently and would use the card's hotel elite status, lounge access, or travel credits, the annual fee may be worth paying even if you do not spend much abroad. Similarly, if the card earns bonus points on categories you spend heavily in — like dining or flights — the rewards may offset the annual fee regardless of foreign transactions.
If you travel once or twice a year and spend $2,000 to $3,000 abroad per trip, a no-annual-fee card with a 2 percent foreign transaction fee costs you $40 to $60 per trip. Over two trips, that is $80 to $120 per year, which is less than the $95 annual fee on the Sapphire Preferred. In this case, a no-fee card with a foreign transaction fee is the cheaper choice.
How to use a no-foreign-transaction-fee card abroad
Once you have a card with no foreign transaction fee, using it abroad is straightforward. Notify your card issuer before you travel so they do not block transactions as fraud. You can usually do this through the card's mobile app or by calling the number on the back of your card.
Use the card for purchases in stores and online just as you would at home. The card will be converted to U.S. dollars at the issuer's exchange rate, and you will see the converted amount on your statement. You will not see a separate line item for a foreign transaction fee because there is none.
For ATM withdrawals, check whether your card charges a separate ATM fee abroad. Many cards without a foreign transaction fee still charge $2 to $5 per ATM withdrawal outside the U.S. If your card does charge an ATM fee, use ATMs less frequently and withdraw larger amounts to reduce the number of transactions. Some cards reimburse ATM fees if you use ATMs in their partner network, so check your card's benefits guide before you travel.
Alternatives if you do not want to pay an annual fee
If you want to avoid foreign transaction fees but do not want to pay an annual fee, your options are limited. Most cards without annual fees do charge a foreign transaction fee, typically 2 to 3 percent. However, a few cards offer no annual fee and no foreign transaction fee, though they are rare and may have other trade-offs.
Another approach is to use a debit card or prepaid travel card instead of a credit card. Some debit cards, like those from Charles Schwab Bank, reimburse all foreign ATM fees and have no foreign transaction fee. Prepaid travel cards sold by companies like Wise and OFX let you load money in multiple currencies and avoid foreign transaction fees entirely, though you pay a fee to load the card initially.
If you use a card with a foreign transaction fee, the fee is still usually cheaper than exchanging cash at an airport or using a currency exchange service. A 2 percent foreign transaction fee is typically lower than the 3 to 5 percent markup you pay when you exchange cash in person.
What happens when you use a no-foreign-transaction-fee card online
If you buy something online from a merchant based outside the U.S., your card will charge no foreign transaction fee as long as the transaction is processed in a foreign currency. Some merchants give you the option to be charged in U.S. dollars instead, a practice called dynamic currency conversion. If you choose to be charged in U.S. dollars, the merchant's exchange rate is usually much worse than your card issuer's rate, so you should always choose to be charged in the foreign currency instead.
When you check out, the merchant will ask which currency you want to be charged in. Select the local currency (pounds, euros, yen, etc.), not U.S. dollars. Your card issuer will then convert it to dollars at their rate, and you will pay no foreign transaction fee. If you accidentally select U.S. dollars, you will pay the merchant's conversion rate, which is typically 2 to 4 percent worse than your issuer's rate.
Frequently Asked Questions
Do I need a no-foreign-transaction-fee card if I only travel once a year?
It depends on how much you spend abroad. If you spend $2,000 or less per trip, a card with a 2 percent foreign transaction fee costs you $40 or less per trip. Over one trip per year, that is less than the annual fee on most no-foreign-transaction-fee cards. If you spend more than $5,000 per trip, a no-annual-fee card with a foreign transaction fee becomes more expensive than a card with an annual fee but no foreign transaction fee.
Can I use a no-foreign-transaction-fee card at an ATM abroad?
Yes, but check whether your card charges a separate ATM fee. Many cards with no foreign transaction fee still charge $2 to $5 per ATM withdrawal outside the U.S. If your card does charge an ATM fee, you will pay that fee even though there is no foreign transaction fee. Some cards reimburse ATM fees if you use partner ATMs, so check your benefits guide.
What is the difference between a foreign transaction fee and an exchange rate markup?
A foreign transaction fee is a percentage charge the card issuer adds on top of the purchase amount. An exchange rate markup is the difference between the mid-market exchange rate and the rate your issuer uses to convert the currency. You cannot avoid the markup, but you can avoid the foreign transaction fee by choosing the right card.
If my card has no foreign transaction fee, do I pay anything extra when I use it abroad?
You pay the exchange rate markup that your card issuer applies, which is usually 1 to 2 percent above the mid-market rate. You do not pay a separate foreign transaction fee. If your card charges an ATM fee, you will pay that when you withdraw cash, but not on purchases.
Should I exchange money before I travel if I have a no-foreign-transaction-fee card?
No. Using your card abroad is almost always cheaper than exchanging cash before you travel. Airport currency exchanges typically charge 3 to 5 percent markup, which is higher than the 1 to 2 percent markup on your card's exchange rate. Use your card for purchases and withdraw cash from ATMs as needed.