Why You Need a No Foreign Transaction Fee Credit Card

Even if you're not a world traveler, you might get stuck paying foreign transaction fees on credit card purchases. Matt Schulz from CreditCards.com joins Money Girl to explain foreign fees, which types of cards you should carry when traveling, and the best no-foreign fee cards available to save money.

Laura Adams, MBA
4-minute read
Episode #411

Why You Need a No Foreign Transaction Fee Credit CardIf you plan to travel outside of the U.S., or even purchase items online from a foreign company, expensive credit card fees can spoil your fun by adding up to 3% to your bill.

But the good news is that it’s easy to avoid these charges by choosing a credit card that waives all foreign transaction fees.

In this week’s podcast, Money Girl is joined by Matt Schulz, senior industry analyst at CreditCards.com. He explains foreign transactions fees, gives traveling tips, and recommends the best credit cards to take on your next overseas trip.

Free Resource: Travel Card Comparison Chart (PDF download)Laura compares the best no-foreign transaction fee credit cards!

How to Avoid Credit Card Foreign Transaction Fees

Here are 5 tips to avoid expensive foreign transaction fees no matter if you’re on vacation or shopping online:

Tip #1: Understand when foreign fees apply

Banks and card issuers charge foreign transaction fees when you use a U.S. credit card outside of the U.S. or make a purchase through a foreign bank. For example, if you purchase clothing from a European company’s website (even if you pay in U.S. dollars), you typically also have to pay an additional transaction fee.

However, it’s more common to get blindsided by foreign transaction fees after you return from an overseas vacation and see them on your next credit card statement. 

See also: Tips for Saving Money on Travel and Cruise Vacations

Tip #2: Maintain good credit

In general, credit cards that offer the best benefits—such as travel rewards, cash back, no fees, and low interest rates—also require you to have good or excellent credit.

So, in order to qualify for some of the best no-foreign transaction fee cards, you’ll need to keep your credit in good shape. For strategies to build credit fast download my free Credit Score Survival Kit tutorial.

See also: Best Tips to Improve Your Credit Score

Tip #3: Shop and compare card benefits carefully

Shopping for a credit card can be confusing because there are so many details in the rewards. Compare benefits carefully and choose cards that align with your spending habits and amounts.

For instance, if you don’t travel often, using a no-foreign fee card that offers cash back card might be more valuable than one that accrues points for travel miles.


About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlersbook is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.