Before I start this series, let me briefly introduce myself.

Hello everyone, I'm the new author milesgod. My interests are travel, cards, and points. In the future I'll be writing a full set of travel savings guides and real-world strategies. Stay tuned.

Today's topic is a money-saving trick for travel spending: don't use a card that charges a foreign transaction fee (FTF)

Foreign transaction fee (Foreign transaction fee or FTF)

A foreign transaction fee (Foreign transaction fee or FTF) is basically an extra fee banks charge us. This fee is charged in the following two situations.

  • The transaction is processed through another bank
  • The transaction involves currency conversion

For example, if you use a Chase-issued credit card and make a purchase abroad. Whether or not the transaction is converted between U.S. dollars and Chinese yuan, as long as you complete the transaction through a domestic bank, Chase will charge this foreign transaction fee.

This fee generally has two parts. The first is charged by the credit card network (for example, Visa, Mastercard, AMEX), and the second is charged by the card-issuing bank (for example, Chase, Citi, BofA). Visa and Mastercard usually charge 1%, while the issuing bank charges 2%. So in general, this fee is around 3%.

Also note that currency conversion uses the exchange rate at the time, which affects your actual spend, while the Foreign transaction fee is added separately to your bill.

Where can you find the Foreign transaction fee?

Usually your credit card terms will include a foreign transaction fee section. For example, you can find the following disclosure.

How can you avoid being charged a foreign transaction fee?

Basically, all travel credit cards that charge an annual fee waive the FTF. So when you travel abroad, just use these no-FTF cards.

Any recommended no-annual-fee cards with no FTF?

Our recommended no-annual-fee cards with no FTF are the following.

  • BofA Travel Reward: 1.5% cash back, but when you keep enough money with BofA, there are 25%, 50%, and 75% bonuses. For example, if you keep $20,000 at BofA, this card becomes 1.5% x 1.5 = 2.25% cash back.
  • Discover it: without a chip, the card will route through UnionPay in China and other parts of Asia, which is more convenient. What happens after a chip is added is unknown.
  • Discover it Miles: without a chip, the card will route through UnionPay in China and other parts of Asia, which is more convenient. What happens after a chip is added is unknown.

Personal cards with no annual fee and no FTF

Business cards with no annual fee and no FTF

Which no-FTF cards earn the highest rewards? — by cash-back category

Another question is: if I use a card overseas, can I earn extra bonus cash back by category?
The answer is yes. Here are high-category cash-back cards with no FTF.

Airline tickets

  • AMEX Platinum (5X): best used to buy tickets on an airline's local website in another country

Travel 3X

Travel covers a broad range, so it is especially useful for spending abroad.

Dining

No category

Of course, you can also use other airline cards and hotel cards.

Most other airline cards and hotel cards generally do not have FTF.