[Disclosure: Emily and I get a commission for some of the links in this post. We always include the best offer for a card even if it doesn't pay us a commission. You don't have to use our links, but thanks for your support!]
Starting May 1, 2014 the Delta American Express cards will no longer have foreign transaction fees of ~2.7%. However the annual fee increases on the Delta Platinum card.
Delta American Express Changes Coming May 1, 2014
[Disclosure: Emily and I get a referral for all cards in the post except for the Capital One student card and the Charles Schwab debit card.]
Million Mile Secrets reader Carol writes in:
Our daughter is studying abroad for 1 year in Rome, Italy and I am trying to figure out a way to send her money and a credit card for her to use that has no international transaction fees.
Any suggestion you may have would be greatly appreciated. Would it be possible for her to earn mileage or points on a specific card? She is 20 years of age.
There are three parts to Carol’s question:
- Which credit cards have no foreign transaction fees?
- Which miles and points credit cards can a 20 year old qualify for?
- How to send money to someone abroad?
Why Is a No Foreign Transaction Fee Card Important?
Most US credit cards charge an extra 3% when you use them for transactions in foreign currency.
3% may not seem like a lot, but it adds up. Let’s say that you’re a student studying abroad who spends, say, $750 per month for 12 months. That’s $9,000 in spending ($750 per month X 12 months).
Say No to Foreign Transaction Fees!
You will pay $270 in fees if your credit card charges a 3% foreign transaction fee ($9,000 in annual spending X 3% foreign transaction fee). Continue reading
[Disclosure: Emily and I get a referral for all cards in the post except for the Southwest Premier, Chase Priority Club, Chase Fairmont, Chase United Club, Citi Thank You Premier (better than my affiliate link), Citi American Airlines Executive, and the American Express Mercedes-Benz Platinum]
No Foreign Transaction Fee CArds
Readers often ask which credit cards do not charge the 1% to 3% foreign transaction fee for using the card for transactions in foreign currency. Most credit cards will charge you a fee for purchases in a foreign currency.
So I’ve made a new page on the Travel Credit Cards tab for No Foreign Transaction Fee cards!
No Foreign Transaction Fee Tab!
The cards listed on that page do NOT charge a foreign transaction fee if you use them for transactions in foreign currencies.
My favorite no-foreign transaction fee card is the Chase Sapphire Preferred which offers double points for travel (airfare, hotel, car rental, parking etc.) and dining. And you almost certainly are spending most of your money on travel and dining when you’re on vacation! Continue reading
Posted in American Airlines, American Express, AMEX Delta, AMEX Mercedes-Benz Platinum, AMEX Platinum, British Airways, Business Credit Cards, Chase, Chase British Airways, Chase Fairmont, Chase Hyatt, Chase Ink Bold, Chase Ink Plus, Chase Marriott, Chase Priority Club, Chase Ritz Carlton, Chase Sapphire Preferred, Chase Southwest, Citi American Airlines, Citi Hilton Reserve, Citibank, Credit Cards, Delta Skymiles, Foreign Transaction Fees, Foreign Transaction Fees, Hilton HHonors, Hyatt, IHG, Marriott, Ritz-Carlton, Southwest, United Airlines
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I’ve always known that changing money at airports is a terrible deal. But I was curious to see just how much I would be ripped off, so I converted $100.50 into 60 euros at the Travelex Currency Services in Newark airport.
This was a terrible deal, because I would have received 16 more euros, for a total of 76 euros, if I had converted $100.50 at the official inter-bank rate.
I paid ~27% more (16 extra euros/60 euros) because of the fees involved at the Travelex store!
Don’t expect Travelex to tell you just how much extra you’re paying. In my experience, the representatives are either themselves clueless about the fees or intentionally understate the fees to make a sale. My receipt labels the representative as a “Sales Consultant” so I suspect a significant portion of the representatives’ salary is based on the volume of foreign currency sales.
This means that there is a significant incentive for the representative to generate sales and divert attention from the high fees charged by Travelex. I specifically asked about fees, and was told that no fees were charged. Which is technically correct because the receipt labels them as “Service Charges.”
A $9.95 Service Charge is a Fee to Me!
The colorful marketing chart at the Travelex booth has the audacity to state “Discounted Exchange Rate on Today’s Transaction” when the foreign currency fee is 14% MORE, for converting US dollars to euros, than the inter-bank rate!
No Value For You!
And the “savings” mentioned are fictitious savings likely generated by comparing to inflated base rates.
Foreign Currency Conversion Fees
You pay two fees when you change currency at an airport. This is in spite of the sales consultant (& the Travelex receipt) telling you that there are no fees. That’s because there is a “Service Charge” so Travelex can honestly say that you weren’t charged a “fee” when in-fact the service charge has the same effect as a fee! Continue reading
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Million Mile Secrets reader Jonathan writes in:
One thing I can’t figure out – is it better to pay for things in local currency and let Visa/ MasterCard convert back to US [currency]? All the places I go to buy something offer to convert to dollars. I don’t pay a foreign transaction fee on my card.
When Emily and I were in Paris, we were often asked if we wanted to pay our bill via credit card in euros or in US dollars. For example, if we were at a cafe and spent 30 euros, we’d get the option of seeing the bill of 30 euros converted to US dollars.
We always paid our bill in euros because if we paid our bill in US dollars, we’d be charged a separate currency conversion fee, despite using the Chase British Airways card which had no foreign transaction fee! Continue reading