How much you can save with a no foreign transaction fee credit card will depend entirely on how much you spend. Perhaps the biggest savings for the average traveler will come from international transaction fees charged on hotel reservations. A seven night stay abroad in a $200 a night room would lead to $45 in foreign credit card fees. While not a fortune, it is still money that could be better spent enjoying oneself. Toss in another $200 a day for meals and entertainment, and foreign transaction fees approach $100 for a modest trip.
A credit card that charges no foreign transaction fees is not going to make you rich, but the savings really add up the more you spend while traveling internationally. And, depending on the credit card you choose, you can actually increase the savings to as much as 5% on international credit card purchases. The trick to increasing your savings is to choose a rewards card such as Capital One Cash or Capital One Venture . These rewards cards let you earn either 1.5% or 2% on every dollar, euro, or yen that is spent. For example, a person who uses a Capital One no foreign fee credit card and spends $5,000 on hotel, meals, and other foreign transactions could end up with $250 in transaction fee savings and rewards earnings.
A Capital One No Foreign Transaction Fee Savings Example
On a trip to the Caribbean, my wife and I used the Capital One Venture Rewards card to pay for all of our expenses. The largest expense was the hotel, which cost approximately $3,200.On this expense alone, $96 was saved in foreign transaction fees. Plus, at a 2% rewards rate, an additional $64 was earned in rewards. Compared to other credit card options we had, this put us ahead $150.
The next largest expense was meals, which totaled about $1,000. International fee savings here were $30 and rewards earnings added another $20, lifting the total fee savings plus rewards earnings to $200. Miscellaneous expenses, including a rental car, shopping and excursions added another $1,000 or so to the bill, creating another $30 in foreign fee savings and $20 in rewards, bringing our trip savings plus rewards bounty up to $250.
Had we used an alternative credit card with a 3% foreign transaction fee, our trip expenses would have been $5,356. With the Capital One Venture card, our vacation cost was just under $5,100 - or $100 less than the total amount we actually spent.
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