The 2 Best No Foreign Transaction Fee Credit Cards

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Update: This offer for the Barclaycard Arrival Plus(TM) World Elite Mastercard® is expired. Learn more about the current offer here.

We’re now seven weeks into the new year, and after looking at my calendar I’ve realized that I’ve spent about five of those weeks outside the US. So it goes without saying that a vast majority of my credit card spend has also been outside the US.

Copenhagen
Copenhagen, Denmark, where I rang in the new year

I think on average most of us proportionally spend more money when traveling than when at home. Not only do charges add up quickly, but foreign transaction fees on credit cards can add up quickly as well. I’m often asked what the best no foreign transaction fee credit card is, and in my book there are two top picks:

While I think these two cards are almost unarguably the best, they’re not created equal — which card is better for you depends on which type of spender you are and what kind of rewards you’re seeking. So I figured I’d talk a bit about the relative value of each card, especially in context of international spend.

Comparing sign-up bonuses

While this isn’t relevant to which card you should actively spend money on when traveling internationally, it could perhaps sway you if you’re trying to decide which card to pick up:

The Chase Sapphire Preferred® Card offers 50,000 bonus points after spending $4,000 within three months, plus an additional 5,000 Ultimate Rewards points when you add an authorized user to the card that makes a purchase within three months. I value Ultimate Rewards points at ~1.8 cents each, so that’s potentially worth ~$900.

The Barclaycard Arrival Plus™ World Elite Mastercard® offers 40,000 miles after spending $3,000 within first 90 days. Each point can be redeemed for one cent towards the cost of travel, plus you get a 10% refund on redemptions, so that’s worth ~$440 to me.

In this case I think the Chase Sapphire Preferred is the clear winner.

Comparing spending bonuses

The Chase Sapphire Preferred® Card allows you to earn 2X points on travel and dining, which includes things like airfare, hotels, car rentals, subway tickets, taxis, parking, etc. In my case, a vast majority of my international spend falls into this category. To me that’s the same as earning a return of ~1.8-3.6 cents per dollar spent, depending on the category. Looking at my spend, about 80% of my international spend falls under the “dining and travel” umbrella.

Chase-UR
Earning bonus points in Muscat, Oman

The Barclaycard Arrival Plus™ World Elite Mastercard® offers two miles per dollar spent, each of which can be redeemed for one cent towards the cost of a travel purchase, plus you get a 10% refund on redemptions. That’s like earning ~2.22% cash back towards travel for all purchases, regardless of the category.

Which points are more useful?

Ultimately I think which card is best to use for international travel comes down to which type of points currency you value more:

  • Chase Ultimate Rewards points are transferable to nearly a dozen partner airlines and hotels, and can be used as “traditional” miles; if you understand the programs, that has the potential to be extremely useful. These points can also be redeemed as 1.25 cents each towards the cost of a travel purchase.
  • Barclaycard Arrival miles can be redeemed as cashback towards travel. For each dollar you spend you’ll ultimately get ~2.22% of value towards a travel purchase.

Chase-Airline-Partners
Ultimate Rewards airline partners

If you have aspirations of redeeming your points for international premium cabin award tickets, then Ultimate Rewards points will be more valuable. If you’re hoping to redeem your points for cheap domestic tickets or for international economy tickets that you’d still like to earn miles on, Barclaycard Arrival miles would be more useful.

Just recognize that there’s virtually no “information disadvantage” when it comes to using Barclaycard Arrival miles, while there are great uses and not-so-great uses of Chase Ultimate Rewards points.

Bottom line

For my personal uses, the Chase Sapphire Preferred® Card proves more rewarding to use when traveling internationally. That’s because a vast majority of my spend when traveling falls under the category of “dining” and “travel” (shocker!). Earning a return that I value at ~3.6% while not paying foreign transaction fees is huge.

The one major advantage of the Barclaycard Arrival Plus™ World Elite Mastercard® is that it has Chip + PIN technology, which means it can be used at many automated kiosks in Europe, like at train stations, etc.

TGV-Train-Brussels-Paris-13
Chip + PIN technology makes buying train tickets in Europe easier

I know a lot of people don’t like cards with annual fees, but I do think in many cases waived foreign transaction fees alone justify some annual fee cards. Fortunately in the case of both of these cards, the annual fee is waived the first year.

What’s your preferred credit card to use when traveling internationally?

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Comments

  1. Lucky-I use the Chase Sapphire card most of the time. That said, what other cards offer Ultimate Rewards that are not Chase offerings?

  2. Some European automated machines accept the CSP with a chip, so a PIN is not necessary in all cases. From my experience of living in France last year and using my CSP, the Paris and Lyon Metros and the yellow SNCF machines accepted them without a problem, but the blue regional TER ones didn’t. I could buy my regional tickets from the yellow machines anyway, so it wasn’t really a problem after I figure that out.

    I know you don’t receive a commission for this, but a great companion is the Charles Schwab ATM/debit card because most travelers are probably going to need some cash at some point. It has no ATM, foreign exchange, or annual fees.

  3. A question that I’ve been having lately is for situations where you’re not shooting for a premium cabin miles goal, for non-category bonus everyday spend (ie 1x on the CSP or any other pts/miles card) is it better to get the transferable 1x points for a rainy (or snowy) day down the line, or use the Arrival+ and get the 2x that you can use for a set of different travel reimbursement options?

  4. @tp: Just came back from Italy and all my US credit cards were useless on automated machines at train stations. I was lucky I found a taxi driver to change some large Euro bills so I could have money to buy a ticket for the Malpensa Express since every time I tried to use my credit cards with Chip+Signature the machine asked for a PIN and rejected the transactions. It was 5:30AM and the machines were the only option for me to be allowed into the train. Very annoying that Chase, Amex and Citi still insist in using Stone Age technologies on their credit cards. They are still very narrow minded thinking people will only use their cards in the US.

  5. Looks like someone has run out of money living at hotels and needs some sign-up money for the ala carte breakfasts! 🙂

  6. I agree about Charles Schwab – we carry it and the two cards mentioned in the article for international travel. One of us carries the Chase card and the other carries the Barclay card. We both carry the debit card.

  7. Another place where the CSP card is useless is most French automated toll booths. Oh, the horror stories 🙂

  8. @Santastico Your response reminded me of an incident I almost forgot about. I was taking an early Lyon Airport Express in order to catch and early morning flight, and it didn’t accept my Chip + signature card. I wrongly assumed it would have worked since the Metro machines worked for me on multiple occasions. I didn’t have enough cash on me, and I’m not even sure it accepted cash. All of the ATMs at the train station were not working (?!?). I ended up asking a stranger to buy me the ticket and trust me that I would pay them pack. I went to an ATM in the airport and broke the large bill it spit out at a shop. I was running late and had issues with my bags that resulted in extra fees. It really was a bad start to a pretty terrible morning.

    Obviously, having a chip + PIN card takes out any uncertainty with automated machines, but there are definitely some places in France, which I already mentioned, that are possible with just the Chip. Someone should create a wiki or blog post, if one doesn’t already exist (maybe there’s one on FT?), about machines that accept Chip + signature cards.

    Unfortunately, I had a French card with chip + PIN earlier that would have solved many of my issues, but it was stolen earlier and never replaced due to my personal situation + French bureaucracy…

  9. @Tom – Only those customers who travel internationally somewhat regularly are clamoring for them. The occasional international traveler probably isn’t. And most Americans don’t have passports. So most of their customers are probably not clamoring for them. If the majority were clamoring for them, the banks would introduce them.

  10. @ All who can help and I appreciate it,

    Which one is better for international ATM withdrawal (especially in Japan):
    1. Charles Schwab High Yield Investor Checking Account

    or

    2. Fidelity Cash Management Account

    I will go to Japan next month and heard that Japan is “cash” country. You have to have cash to buy train/subway ticket, pay for foods at restaurant, etc.

  11. @Santastico & @tp – I used the CSP all over France and Italy last year (Paris, Lyon, all up and down every coast), and the main places I had trouble with chip & sign were self-service gas pumps. I never had trouble with train kiosks in Italy, but I only tried in Florence and Milan. Would definitely be nice to have chip & PIN though, esp since my signature keeps rubbing off the CSP (and it never looks the same twice anyway).

    I know Lucky doesn’t earn commission on it, but I agree with the Schwab account option, even if you don’t earn points. I’ve also been using my Citi Thankyou Premier more in London since it gets 3x pts on dining & entertainment (for now), which is nice while traveling. I used it to buy opera and French Open tix and I assume other sports, amusement park, and movie tix would also count.

    When it goes down to 2x I’ll probably switch back to CSP. The CTYP $125 annual fee is steep for essentially a less flexible pts currency, but I feed those points into SQ anyway, so well worth it, and it has bonuses that CSP doesn’t.

  12. what a timely post!
    I am going to be landing at Milan Malpensa Sunday morning and will need to buy a train ticket.

    I have the Arrival Plus- will that work in the automatic kiosks?

  13. @ Ray — They’re a Chase specific currency. There are other cards that accrue them as well, but they’re all from Chase.

  14. @David- I have no experience with the Fidelity card. I used my Charles Schwab card in Japan (Kansai) twice for cash when I visited in December 2013, and it worked fine. The ATM spit out a ¥100,000 note though. At first, I was worried the Kyoto subway wouldn’t accept it, but sure enough it was fine. I used my CSP a handful of times also.

  15. @tp @Vincent

    Thanks! wow..@tp, there is a 100,000 yen note now? last I heard the biggest bill is 10,000 yen. And how can you use CSP card in Japan? Japan is mostly “cash” country…..where did you be able to use CSP card to pay? train station, restaurant?

  16. Perfect timing! We’re moving to Germany this summer and already have the two mentioned but need to figure out the best way to get cash out without fees. I’ll be looking into the Charles Schwab account. Any other options or recommendations for no free credit cards?would it be better to get a Europe based card?

  17. @ Aarash — Cards in Europe generally aren’t as rewarding, though I’d probably consider one of the above cards despite the fees, given how many bonus points you can earn.

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