• September 11, 2021

Avoid Credit Card Fees While Traveling

The next major fee we need to get rid of is the credit card foreign transaction fee. Most credit cards charge a 3% fee on purchases made overseas. That can add up since most of us use our credit card for everything. It’s become a lot more common for credit cards to waive that fee since if you use your card a lot overseas, you’ll probably use it a lot anywhere. My favorite no overseas transaction fee cards are the Chase Sapphire Preferred, Barclay Arrival Plus, Capital One, and Citi Premier. (For more suggestions, you can find all my favorite travel cards here.)

If you use these cards overseas, you won’t pay 3% and you’ll save a lot of money!

For non-US citizens, check the following websites that list cards that might not charge any overseas fees:

Australian Frequent Flyer (Australia)
Credit Cards UK (UK)
Candian Kilometers (Canada)

Minimize the Exchange Rate “Penalty” – Every time you use your card overseas, your local bank coverts the transaction into your local currency for billing purposes and takes a little off the top for doing so. Thus the official rate you see online is not what you actually get. That’s the interbank rate, and unless you become a major bank, you’re not going to get that rate. All we can do is get as close as we can to that rate. To avoid being on the real losing end of conversion, follow the following tips:

Use a credit card — Credit card companies get the best rates. Using a credit card will get you an exchange rate closest to the official interbank currency rate so avoid an ATM or cash if you can.

Use an ATM — ATMs offer the best exchange rate after credit cards. They aren’t as good as credit cards since commercial banks take a little more off the top, but it’s much better than exchanging cash. Money exchange offices offer the worst rates because they are so far down the food chain, they can’t get the best exchange rate (plus, they usually charge a commission as well).

Don’t use ATMs in weird locations — Using those ATMs you find in hotels, hostels, local 7-11s, or some other random place is a bad idea. They’re convenient, but you’ll pay for that convenience. They always charge high ATM fees and offer horrible conversion rates. Skip those ATMs and find a major bank.

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