Are no foreign transaction fees worth it?

Are Cards with No Foreign Transaction Fees Worth It?

When planning extended travel, especially for durations of three months or more, it’s essential to consider the financial implications. One important factor to consider is whether a credit card with no foreign transaction fees is beneficial.

Benefits of No-Foreign-Transaction-Fee Cards

• Reduced currency exchange costs: Foreign transaction fees typically range from 2% to 3%, which can add up significantly over time. By using a card with no such fees, you can save money on every purchase you make abroad.
• Convenience: It eliminates the need to carry multiple currencies or exchange money at unfavorable rates. You can use your card directly, avoiding the hassle and potential risks of carrying cash.
• Peace of mind: Knowing that you’re not incurring additional fees can provide peace of mind while traveling. You can focus on enjoying your experience without worrying about unexpected charges.

Drawbacks of No-Foreign-Transaction-Fee Cards

• Higher annual fees: Some cards with no foreign transaction fees come with higher annual fees. It’s important to weigh the potential savings against the fees to determine if it’s worth it.
• Offsetting cashback: While some cards offer cashback rewards, it’s important to consider if the cashback earned offsets the foreign transaction fees you would save.
• Limitations: No-foreign-transaction-fee cards may have other limitations, such as lower credit limits or restrictions on certain types of transactions.

When It’s Worth It

Consider a no-foreign-transaction-fee card if:

• You’re planning an extended trip of three months or more.
• You expect to make substantial overseas purchases.
• The cashback you earn offsets the higher annual fee.
• You value the convenience of not having to carry multiple currencies or exchange money.

When It’s Not Worth It

A no-foreign-transaction-fee card may not be worth it if:

• You’re only traveling for a short period.
• You don’t plan on making significant overseas purchases.
• The annual fee is significantly higher than the potential savings.
• You can easily exchange currency at favorable rates.

Ultimately, the decision of whether a no-foreign-transaction-fee card is right for you depends on your individual travel plans and financial situation. Carefully consider the benefits and drawbacks to make an informed choice that will save you money while ensuring a convenient and enjoyable travel experience.