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Lowest Foreign Transaction Fee

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In a couple months, my wife and I will be taking an extended vacation to Europe. It’ll be a fantastic trip, one we’ve been looking forward to for months, and with the dollar strengthening and the economy across the world weak, we figured we could take advantage of lower prices to get some traveling done.

As I did a few years ago when we went to China, I wanted to confirm that my Capital One card still had the lowest foreign transaction fees. Fortunately, USA Today did all the leg work for me and has an updated list of foreign transaction fees by bank (Discover is excluded because it’s not accepted internationally, but they charge 0% as well):

  1. American Express: 2.7%
  2. Bank of America: 3%
  3. Barclaycard/Juniper: 2-3%
  4. Capital One: 0%
  5. Citibank/Diners: 3%
  6. Diners Club: 3%
  7. HSBC: 3% (most)
  8. JP Morgan Chase: 3% (most)
  9. US Bank: 3%
  10. USAA: 1%
  11. Wells Fargo: 3%

Here’s the same list, reordered based on percentage charged:

  1. Capital One: 0%
  2. USAA: 1%
  3. American Express: 2.7%
  4. Barclaycard/Juniper: 2-3%
  5. Bank of America: 3%
  6. Citibank/Diners: 3%
  7. Diners Club: 3%
  8. HSBC: 3% (most)
  9. JP Morgan Chase: 3% (most)
  10. US Bank: 3%
  11. Wells Fargo: 3%

Looks like Capital One retains the crown for the best international credit card. Finding a card with no foreign transaction fee is crucial to saving big bucks when traveling. Which reminds me, I should probably make some small charges to it so it doesn’t get closed on me!

{ 27 comments, please add your thoughts now! }

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27 Responses to “Lowest Foreign Transaction Fee”

  1. Lucy says:

    The Charles Schwab Invest First Visa has no foreign transaction fee and also 2% cashback as well.

  2. eric says:

    Yup, not much has changed besides some companies raising their rates. My CapOne still works fine without any forex fees. The only sad news is that my US dollar isn’t getting as much these days but I’m hoping for a rebound.

  3. Anonymous says:

    Discover does not charge 0%. They charge 2%.

  4. Matt says:

    Seems like Capital One is the way to go. The Charles Schwab credit card is great with the 2% cash back plus there wouldn’t be a fee in opening a brokerage account with them if you sign up for their credit card.

  5. Nathan says:

    When my wife and I went to Italy and Portugal last fall, we used our Everbank ATM card and paid a 1% transaction fee and zero ATM charges anywhere either by our bank or the ATM. Considering most places required cash, this was a great deal.

    For purchases categorized as restaurants and travel (hotels, train) we used our Amex card where we could and the cash back outweighed or at least canceled out the transaction fee.

  6. Good to know– thanks for sharing.

  7. Tuxster says:

    I second the Charles Schwab credit card, since the 2% cash back and a much better customer service makes it a better choice than CapOne (I have both).

    However, the transaction fee shouldn’t be the only concern you have, the exchange rate the company uses is also a factor.

    I have tested this a few times by charging certain amounts at the same vendor on both Capital One and an American Express card within 10 minutes of each other. More than 50% of the time, the American Express card, including the 2.7% fee has come up as a better overall deal because of the more favorable exchange rate that American Express uses compared to Capital One. So, in that sense the transaction fees actually end up being misleading because of the hidden costs associated with the exchange rates being utilized.

  8. Chuck says:

    I’ve used my Discover card extensively in the Dominican Republic with no fees. I also got a Capital One card for places which don’t take Discover (which are many).

    Discover is accepted in China via Union Pay.

  9. Chuck says:

    It should be pointed out that all Visa and Master Card cards charge 1% for foreign transactions. The issuing bank is free to add some more fees on top. As far as I know, Capital One just eats that charge instead of passing it on. (But I think they don’t pay rewards on foreign transactions, which pretty much breaks even.)

    • cynthia says:

      That’s not true Cap. One does pay rewards and also rewards points depending on the type rewards card you have. I am in Costa Rica right now until Dec 31, 2009. I make mostly all my purchaces by credit and I see the reward every one to two days.

  10. MLR says:

    Wish I had known all of this when I traveled across Europe.

    But I didn’t. And I paid a TON in fees. Oh well, c’est la vie. Now I know for next time :)

  11. Dave says:

    Yea… Capital One is good for something (terrible rewards/cash back). I keep this card for 2 reasons. It is my longest credit line and for when I travel international. Just got back from Aruba and charged everything from the hotel to restaurants to my Cap One with no fees. Very nice. I’d also like to note, no matter what card you have make sure you call them and let them know where and when you will be traveling so you don’t end up stranded.

  12. velvet jones says:

    I opened my CapOne credit a couple years ago specifically for this reason when I went overseas for vacation and never had a problem with it.

  13. Slug says:

    Another vote for the Schwab card. I just picked it up about 2 months ago. The process of opening the card and the associated brokerage account was pretty simple. The customer service has been fantastic. And, no foreign transaction fees on my trip to Madrid. Aside from the PFCU Platinum Cash Rewards card for 5% gas, Schwab is now getting all of my business.

  14. Anonymous says:

    Chuck: Discover now charges a 2% fee. The free ride is over. You should have gotten the message in your statement last month.

  15. I am sorry, but are you guys refering to the Schwab Credit Card, or the Schwab debit card when it comes to transacting abroad?

    I was wondering if anyone has ever used Schwab Debit card at an ATM abroad. What were your fees?

    • Lucy says:

      @Dividend Growth Investor

      We were talking about the credit card called “Invest First Visa”. It has no foreign transaction fee and offers unlimited 2% cash
      back on everything.

      The Schwab debit cards come in different varieties. I heard the one for the High Yield Investor checking account charges 1% foreign transaction fee.

  16. Cameron says:

    I got a capital one card specificaly for this reason a few months ago. I just went on a trip to costa rica and it didn’t work anywhere. I was completely disappointed. I even called before hand to let them know i’d be traveling abroad. They said they didn’t know what the problem was, only next time a merchant had a problem, have them call capital one. Not so easy to do in a foreign country.

    • WrenC says:

      @Cameron

      Oh no! I’m planning a trip (and later a move!) to Costa Rica, and my main CC is Capital One. I was all excited because of the 0% fees.

      Anyone else have any experience with using Capital One in Costa Rica?

      • cynthia says:

        I’ve been using my Cap One. for about a month now with no fees and it’s worked at every place I’ve presented.

        • WrenC says:

          Update: been in Costa Rica twice, 2 weeks each trip, and have been using my Capital One No Hassle Rewards cards with no transaction fees and no trouble.

  17. SavingEverything says:

    Any reason the Schwab Credit Card, the Schwab debit card, and the Fidelity Credit card is not on this list?!? They, too, are like CapitalOne; except CapitalOne cards are notorious.

  18. Paul says:

    I just got my Capital One “Platinum” card for people with “Excellent Credit”. They gave me a ridiculously low credit limit of $1000. That won’t be much help on our upcoming international trip. I’ll have to check it online often and only charge small items.

  19. Chuck says:

    Paul, I had the same problem. My wife went overseas to visit her family with her whopping $500 credit limit, so I sat home and paid the bill online every time there was a balance. :)

    When I caught up with her, I brought my $1000 Capital One card, which was only slightly better. Not the most convenient, but still better than paying fees.

  20. Mahesh says:

    The following Credit Cards also have 0% FTFs

    Addison Avenue CC
    Pentagon Fed Promise Card
    Barclays Harvard card
    Associated CU

    Enjoy!!

  21. rita says:

    what is the date of your article?


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