A foreign transaction (FX) fee on a credit card is the amount charged to the card when it is used at a non-US store. The usual amount charged as a foreign transaction fee is about 3% of the total purchase. The breakdown is, often, 1% by the credit card network and 2% by the bank that issued the card. This can add to a big sum when traveling abroad since a foreign transaction fee is charged every time the card is used.

When choosing a credit card with no transaction fee (foreign), ensure that there are no hidden charges. Sometimes, a currency conversion fee will be charged every time a card is used for a transaction when abroad. Currency conversion fee is charged by the card’s payment processors as opposed to a foreign transaction fee which is charged by the bank that issued the respective card. The reason it is considered “hidden” because it doesn’t show up as a separate charge on the bill or statement. It is incorporated into the purchases made. Another tricky detail that might escape one’s attention, as previously mentioned, is online purchases. Some credit card companies classify a transaction as foreign if it passes through a foreign bank even if that transaction was made in US dollars. However, if the user has a keen eye and spots the incorporated foreign transaction fee in the purchase amount, he can take it up with the company. Some companies do refund the amount.

One particular drawback of a foreign transaction fee is that not only does it not add to your reward points but it also deducts rewards points at times. The latter normally happens because reward rates tend to be around at 2% of the purchase amount while the transaction fee is at 3%.

With these points in mind, the idea is not to avoid credit cards altogether while, say, traveling abroad. Carrying or transacting in cash only has its own pitfalls. Instead, it is advisable to be in the know about credit card issuers who have a credit card with no transaction fee (foreign) on offer. Some of the best credit card with no transaction fee (foreign) fee include:

Capital One Venture Rewards Credit Card
This has been a trailblazer when it comes to offering a credit card with no transaction fee (foreign). A low annual fee, high rewards points in the form of easy miles earning and easy redemption, a noteworthy sign-up bonus, and an option to book travel through the card issuer directly makes this one of the best in the market.

BankAmericard Travel Rewards Credit Card
The most amazing part about this card is that it does not have an annual fee. It has simple flat rate rewards, a travel statement credit, a loyalty bonus and excellent value for travel. With this card, it helps if you have an account with the Bank of America.

Barclaycard Arrival Plus World Elite MasterCard
This card is chip-and-PIN-enabled, a feature that makes it stand out amongst its competitors in the credit card with no transaction fee (foreign) category. Thanks to this feature, the card can be used to pay one’s way almost anywhere abroad. It also has a hefty signup bonus, the biggest in the chip-and-PIN-enabled category. Thanks to self-serve terminals outside of the US, flat-rate rewards, travel statement credit, and free FICO score, this card is worth going for.

Capital One Quicksilver Cash Rewards Credit Card
The biggest advantage of this besides it being a credit card with no transaction fee (foreign) feature is the cash back offer, which is the best available. Naturally, this works for travelers who are on a budget because there is no minimum redemption for cash back. It is a relatively uncomplicated way to get more for every dollar spent. It also has cash back sign up bonus and a balance transfer feature at an outstanding 0% APR period.

Chase Sapphire Preferred Card
Of course, what makes this noteworthy is the no foreign transaction fee feature. However, what gives this a leg up when compared to other credit cards of its kind is the huge signup bonus. Also, not only can reward points be earned on a purchase, but these points can also be transferred to selected loyalty programs. To add to this, made of metal instead of plastic, this card has, for sure, got its looks going for it.

With a credit card with no transaction fee (foreign), the idea is to not only avoid the fee but also to capitalize on points and travel protection offered.