Avoiding Foreign Transaction Fees When Traveling Internationally

A reader asked me this morning about a charge his girlfriend had noticed after booking an international plane ticket on a foreign airline.  The charge was a foreign transaction fee (typically 2.7% - 3.0% and incurred when issuing banks convert a transaction in a foreign currency to USD) and he asked if there was anything he could do to get the fee refunded.

Unfortunately, there's nothing that can be done about the fee after the fact but there are two main ways to avoid paying those pesky foreign transaction fees in the future.  

No Foreign Transaction Fees up here on Victoria Peak

• Pay with cash.  I will explain my strategy for withdrawing cash (fee free) when traveling internationally in a future post.  But this is one way to minimize or eliminate extra fees especially in a situation (i.e. cabs) where credit cards are not widely accepted.

• Carry a credit card which does not charge foreign transaction fees.  My favorite card for this purpose (and many other purposes) is the Chase Sapphire Preferred Card.  In addition to the lack of foreign transaction fees, the card offers great service when traveling abroad as well as 2x points on travel and dining which is where I tend to spend most of my money when traveling.  

My other favorite cards without foreign transaction fees include the American Express Platinum, Barclays Arrival Card, and the United MileagePlus Explorer Card.

Even though the foreign transaction fee is only a few percentage points that can really add up when booking expensive airline tickets on foreign carriers on spending a decent amount of money on drinking/eating/lodging when traveling out of the country.  So make sure you get one of these cards before leaving on your next big international trip!