Best No Foreign Transaction Fee Credit Cards of April 2023

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Our pick for: Flat-rate travel rewards

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Our pick for: Simple travel rewards + no annual fee

Our pick for: Bonus rewards + no annual fee

Our pick for: Business travel

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Our pick for: Average credit

A credit card foreign transaction fee is a surcharge that a credit card issuer places on purchases made outside the United States. The typical foreign transaction fee is about 3{0b5b04b8d3ad800b67772b3dcc20e35ebfd293e6e83c1a657928cfb52b561f97}. So if you went to London with a card that had a 3{0b5b04b8d3ad800b67772b3dcc20e35ebfd293e6e83c1a657928cfb52b561f97} fee and used it to buy something that cost $140, you’d be charged a foreign transaction fee of $4.20. This fee typically shows up as a separate line item on your credit card statement.

Be aware that you can get hit with a foreign transaction fee even if you never leave the country. Foreign transaction fees are based on where a purchase is processed rather than your physical location when you make that purchase. Say that instead of going into a store in London and making a purchase, you ordered something from that store online while at home in the U.S. The transaction might be processed the same as the merchant’s in-store sales, and you’ll wind up paying a foreign transaction fee.

Some issuers, including Capital One, Discover and USAA, do not charge foreign transaction fees on any of their cards, and many issuers do not charge them on specific cards. Credit cards marketed to frequent travelers usually do not charge foreign transaction fees, even if the issuer has them on other cards.

Here’s a look at the standard foreign transaction fees charged by major U.S. credit card issuers. It’s important to note that many of these issuers waive the foreign transaction fee (also called an international transaction fee) on certain cards. Further, some major issuers don’t charge foreign transaction fees on any of their cards.

Whether you’re in the U.S. or a foreign country, your ability to use a credit card at a merchant depends on whether the merchant accepts that card’s payment network. The four major U.S. networks — Visa, Mastercard, American Express or Discover — all have an international presence, although to varying degrees.

In the U.S., Visa and Mastercard are ubiquitous. If a merchant accepts credit cards, it almost always accepts Visa and Mastercard, although there are a few exceptions, such as Visa-only Costco. Discover is a close third, just a hair behind the leaders. American Express is widely accepted, just not as widely as the other three. Smaller merchants, in particular, are less likely to take AmEx. Even so, when traveling in the U.S., you should be able to get by with a card on any of the four networks.

Outside the U.S., Visa and Mastercard are also dominant worldwide networks. And while American Express has a strong presence overseas — it has more cardholders outside the U.S. than in — it doesn’t match the extent of Visa and Mastercard. Discover is a smaller player outside the U.S. If you’re planning to travel internationally and your primary card is American Express or Discover, it’s best to bring along a Visa or Mastercard as a backup.

When you buy something with a credit card in a foreign country, your receipt will show the cost in the local currency. When you get your statement, however, you’ll see that the charge has been converted to dollars. Your payment network takes care of the conversion, and you can usually be confident that you’re getting a fair exchange rate. (A 2016 NerdWallet study found that Visa and Mastercard tended to convert currency at near-market rates, which is about the best you can get.)

Sometimes when you’re shopping overseas, merchants will ask if you want your purchases to be denominated in dollars rather than the local currency. This is known as “dynamic currency conversion.” It seems attractive, as it allows you to see how much you’re spending in terms you understand — say, $50 rather than 5,000 Japanese yen or 45 euros. But dynamic conversion is usually a bad deal. That’s because the exchange rates are considerably worse than what you’d get if you made your purchase in the local currency and then let your credit card network handle the conversion.

One other thing about dynamic conversion: It won’t get you out of paying foreign transaction fees. If your card charges a fee on overseas purchases, it doesn’t matter if those purchases are in dollars, yen, euros, rubles or whatever. You’ll still pay the fee.

Most credit cards issued in the U.S. are chip-and-signature cards. When you make a purchase at a store, the chip embedded in the card passes information to the merchant’s computer system. Further, the chip protects that information with a one-time code so that if the data is stolen, it can’t be used to make a counterfeit card. It’s all very high-tech. But then you complete the transaction by verifying your identity in a decidedly low-tech way: You sign your name — and you might not even do that.

Cards issued in other countries have “chip-and-PIN” technology. You use the card the same way, but instead of signing your name to complete the transaction, you have to enter a four-digit code, or PIN. This adds a layer of security by making it harder for someone to use a stolen card.

When traveling abroad, you’ll usually be able to use a U.S.-issued chip-and-signature card for in-person transactions. Among the places where you can’t use one is at self-service kiosks and vending machines. These typically require chip-and-PIN.

Among major issuers in the U.S., Barclays offers chip-and-PIN on its cards. Some credit unions oriented toward military servicemembers who may be deployed overseas also offer chip-and-PIN functionality. If you don’t have a chip-and-PIN card, it’s not a crisis situation. You’ll just have to plan ahead and keep in mind that if you need to buy something like train tickets, you’ll have to go up to the window and buy from a live person rather than from a ticket machine.

Finally, be aware that simply having a PIN for your credit card does not make it a chip-and-PIN card. Many cards allow you to get cash advances for an ATM using a PIN. A PIN for accessing cash advances is not the same as one for verifying transactions though chip-and-PIN technology. If in doubt, ask your issuer.

Travelers checks have been mostly replaced in travelers’ wallets by credit and debit cards, which also solve many of the security problems that travelers checks were created to address. So while you can still get travelers checks, most travelers would find them more trouble than they’re worth.

Back before credit cards were as widely used and accepted as they are today, people who didn’t want to risk carrying a lot of cash on a trip would rely on travelers checks. A traveler might go to a bank or travel agency in their hometown and buy, say, six $100 checks, which they would sign at the bank. At their destination, they’d use the checks at stores or restaurants that accepted them, or exchange them for cash at a hotel or bank. When they redeemed the check, they’d sign it again, and the recipient would compare the signatures to verify the check.

Among the advantage of travelers checks:

• If they were lost or stolen, the issuer would replace them, so you didn’t lose money. Nowadays, credit card issuers can cancel a lost or stolen card and expedite a replacement just as quickly.

• You could exchange them for cash far from home. The wide acceptance of credit cards makes cash less critical to carry, and credit cards can provide cash in a pinch. And, of course, debit cards can get you cash, too.

• You could use them in places that didn’t accept out-of-town personal checks. Today, credit cards are accepted at millions more locations than travelers checks ever were.

Travelers checks still have their uses. But when you combine the dwindling number of places that accept travelers checks with the fees you have to pay to get them, most leisure travelers will be better off with the cards they already carry.