One of the nastiest surprises an international traveler can receive is something that happens up to weeks after he or she’s returned home.  What’s that?  A credit card bill that’s been inflated by international transaction fees.

Nearly every credit card, every time you buy something internationally, tacks on a 1 to 3% “foreign transaction fee.”  With Chase, Bank of America, and Citibank, it’s 3%; with American Express, 2.7%

Spend a couple thousand dollars, and you’re looking at up to $60 in extra fees just for the privilege of using a credit card.  And that’s not all:  the fees aren’t restricted to purchases you make while actually abroad:  charge a purchase with an international vendor (airline, website, etc.) and you’ll be hit with these same fees.

There are a couple of cards, however, which do NOT charge their customers for such transactions.

1. The first, and perhaps best, is the Charles Schwab Invest First Signature Visa:

Not only does this card not charge any international transaction fees, it offers a 2% credit to your Schwab brokerage account each month.  If you don’t have such an account, you can open one as part of the application process.  (There are no fees to open or maintain the account.)  Also, you can easily link a bank account to the Schwab brokerage account, and after the rebate is paid, transfer the rebate money to your linked bank account.

No cash back limits. No minimum purchase amount. And more.

  • No annual fee
  • No foreign exchange transaction fees
  • Get a competitive variable Annual Percentage Rate (APR) on purchases, currently 13.24%
  • Enjoy complimentary premium Visa Signature benefits and no preset spending limit if you qualify for a credit line of $5,000 or more

Click on the link above the card image to go to the application page.

2. The second card which won’t hit you with international transaction fees is the Capital One Venture One Rewards Card

Unlike the Schwab card, the Capital One Venture card offers reward points:

  • Earn 2 miles per dollar on every purchase, every day
  • Get 10,000 bonus miles when you spend $1,000 in the first three months
  • No limit to the miles you can earn and your miles won’t expire
  • Fly free on any airline, any time, with no blackout dates
  • Annual fee:  $59 (waived the first year)
  • No foreign transaction fees

You don’t transfer reward miles to airline or hotel programs, but instead use them for purchases of any type.  Points are valued at $0.01 – if you want to buy something with points and it costs $100, it will require 10,000 points.

Learn more about the Capital One Venture Rewards card by clicking the link in the line above the Venture image aboveNOTE: Capital One’s similar “Venture One” card offers most of the benefits above (except for 1.25 miles per dollar on purchases) and has no annual fee.

Both of the cards featured here offer other advantages which I’m not going to cover here – things like travel accident insurance, concierge services, and the like.  See the companies’ websites for more information.

Also, keep in mind that with any card, you’ll incur fees for ATM cash withdrawals; check with your credit card company for details.

How about you?  Have a “go to” credit card?  If yes, please share by commenting.

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3 Comments on International travelers: are you getting ripped off by your credit card company?

  1. Andy says:

    I’ve got a Capital One card specifically for that reason, and I also opened a checking account with Umpqua Bank, which offers the only debit card I’m aware of that doesn’t charge a conversion fee for purchases (although VISA still takes their 1% cut).

    I also use my Bank of America debit card at Barclays and DeutchBank ATMs all over Europe for free cash withdrawals.

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  2. Till says:

    Kevin, thanks for the suggestions. Just a quick correction: On the Capital One card points are valued at $0.01 not $0.10. That’s why you have factor 100 between $100 and spending 10000 points for that. If points were valued at $0.10 that would be a 10% payback for every purchase. Too good to be true.

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    Kevin Reply:

    Till, Thanks for the catch; I’ll correct the post.

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