Payset prespective
March 20, 2024

What Are No Foreign Transaction Fee Credit Cards? Are They Really the Best Choice For a Travel Card?

It’s easier than ever to travel the world and make international purchases, and it’s important to have a credit card that allows convenient spending in any situation.

Introduction

You can use most major credit cards to make purchases around the world. This is true regardless of whether you plan to spend money at your travel destination, or whether you’re simply spending money at a merchant or service that operates internationally.

However, finding the most affordable and most convenient credit card can be a challenge. Foreign transaction fees mean that some cards are more expensive and less practical than others. Plus, there are plenty of other factors to take into consideration.

Below, we’ll explain how you can choose a credit card that meets all of your needs.

Understanding Foreign Transaction Fees

Many credit cards include foreign transaction fees. This is a rate that you must pay on any credit card transaction that is not conducted in your local currency. 

For example, if you use a UK-based credit card to pay in a currency other than the British pound (GBP), you might need to pay a foreign transaction fee. Or, if you use a US-based card to pay in a currency other than the U.S. dollar (USD), you might need to pay this fee. 


Foreign transaction fees might be added as separate charges on your credit card bill, or they might be included in the amount of the transaction itself.

Typically, you will only pay foreign transaction fees if you use your card while visiting another country. However, this isn’t always the case: you might need to pay foreign transaction fees when you use your credit card at an online business that operates internationally.

Foreign transaction fees generally range between 1% and 3%, meaning that you might need to pay up to £3 on every £100 that you spend. Exact rates differ between cards and providers, and as such, it is important to find a card with minimal or no fees.

The Benefits of No Foreign Transaction Fee Credit Cards

Credit cards without foreign transaction fees have two main advantages.

The first advantage is savings. By choosing a no foreign transaction fee credit card, you’ll pay less on each international payment in terms of fees.

The second advantage of no foreign transaction fee credit cards is convenience. With cash, you need to obtain a specific currency before you make an international purchase. By contrast, credit cards can automatically convert currencies at the point of sale. 

No foreign transaction fee cards do not necessarily eliminate all costs. You might need to pay conversion fees, service fees, or ATM fees when you use your credit card. Plus, a merchant can impose their own fees on any transaction regardless of the terms of your card.  

It can be difficult to avoid the costs of foreign transactions altogether. As such, you can try to reduce transaction costs instead of eliminating those costs entirely.

Key Features of the Best No Foreign Transaction Fee Credit Cards

The best no foreign transaction fee credit cards offer various features, some of which are essential for any credit card user. Be sure to look for these benefits:

  • Zero annual fees: You’ll likely save the most by choosing a card without any annual fees; cards that include annual fees are not an ideal choice unless you know your spending habits and have a strict preference for premium features 
  • Low interest rates: It’s important to find a credit card with a low interest rate or APR; this is determined both by your credit score and by your choice of service
  • High credit limits: You should find a credit card that offers a high credit limit so that you can cover any large purchases that you need to make
  • Rewards programs: Credit cards may offer rewards on each purchase; typically, these rewards are distributed as points, which you can redeem for physical items or gift cards; alternatively, you might be able to pay these points toward your credit card bill
  • Cashback on foreign transactions: Many credit cards pay a small percentage of your purchase back to you, and some offer extra cash back on foreign transactions
  • Travel insurance: Some foreign credit cards offer insurance, which can cover medical costs, cancellations, flight delays, auto insurance, lost baggage, and hotel theft

Top No Foreign Transaction Fee Credit Cards in the UK for 2024

If you’re looking for a specific no foreign transaction fee credit card, you have plenty of options. We’ll review four popular card options below.

A. Zopa Credit Card

Zopa is a UK-based online bank that has existed since 2005. The company began offering banking services, including credit cards, in 2020. 

The company is highly rated, boasting a 4.5-star rating on Trustpilot and a Best Credit Card Provider award from the British Bank Awards 2021.

Features of Zopa’s credit card include:

  • Interest rates from 27.3% APR
  • No fees abroad
  • A “credit cushion” feature for setting aside funds
  • Anti-fraud and card freeze features
  • Live customer service

B. Halifax Clarity Credit Card

Halifax is a UK bank that is part of Bank of Scotland and Lloyds Banking Group. The company has operated since 1853 and provides a variety of services including bank accounts, savings, loans, mortgages, and vehicle financing alongside its credit cards.

Features of the company’s Clarity credit card include:

  • Interest rate estimates on request
  • No fees abroad, including on purchases and cash withdrawals
  • Coverage for purchase problems between £100 and £30,000
  • Powered by Mastercard
  • 24/7 support
  • Complete fraud protection

C. Barclaycard Rewards Card

Barclay’s is one of the UK’s “Big Four” banks. The company was founded in 1690 and is now one of the country’s most reputable financial institutions. It offers a variety of credit cards through its Barclaycard service, including the Barclaycard Rewards card.

Features of the card include:

  • Estimated interest rate of 28.9%-31.9% APR
  • No fees abroad (including zero ATM fees)
  • 0.25% cashback on everyday spending
  • Extra 15% cash back at participating retailers
  • Powered by Visa
  • Protection on purchases over £100
  • Fraud protection
  • Optional addition of a second cardholder

D. NatWest Travel Credit Card

Natwest is a major commercial and retail bank in the UK founded in 1968. Like Barclay’s, it is considered one of the country’s “Big Four” banks. 

Features of the company’s NatWest Credit Card include:

  • Estimated interest rate of 12.9% APR
  • No foreign transaction fees
  • No annual fee
  • Low rates on purchases and balance transfers; no balance transfer fees
  • Powered by Mastercard
  • Live support
  • Accessibility features for blind and partially sighted users

Choosing the Right Card for Overseas Spending

It’s important to choose the right credit card based on your spending habits and financial situation. Although high credit card limits and low interest rates are desirable, the best way to avoid interest and high costs is to spend within your means and pay your bill quickly.

You should also consider what category of credit card is best for you. Some credit cards – such as reward cards, low-interest cards, and cards for low or no credit – are broadly targeted at different audiences. If you’re not sure which option is best for you, you can talk to a financial advisor at almost any bank to find out more information.

You can additionally use automatic eligibility checkers to find out which cards you qualify for. These tools will assess your personal information, income and employment, finances, and living situation. Generally, these checks do not impact your credit score. 

All four credit cards reviewed in this article offer free eligibility checkers.

Alternatives to Credit Cards: Fintech Debit Cards for International Use

Debit cards are an alternative to credit cards.

When you use a credit card, you accumulate charges that must be paid off at a later date. By contrast, when you use a debit card, you can only spend your existing balance. If you attempt to spend more than your account balance, the debit card transaction will be declined. 

In other words, if you use a debit card, you will not need to worry about interest rates or credit limits because you can only spend money that you already have.

Fees are still a key consideration. Some debit cards offer zero foreign transaction fees, but other fees may still apply, including conversion fees, annual fees, and ATM fees. Just like when you choose a credit card, you should compare each card and opt for the lowest rates possible. Often, fintech companies provide debit cards with the most competitive rate options.

It’s also important to consider whether your debit card will be accepted worldwide. If you obtain a debit card from a smaller financial institution or credit union, global acceptance may be limited. However, many debit cards are now powered by major card networks, such as Mastercard and Visa, meaning that they are generally accepted worldwide.

Security is another key consideration. Fortunately, both credit cards and debit cards typically provide anti-fraud features, meaning that safety is rarely an issue regardless of your choice.

Tips for Using Credit Cards Abroad

There are several ways that you can manage your money and use your credit card effectively when it comes time to travel outside of your country. Consider these strategies:

  • Fully understand your card’s fees: Even if your credit card offers zero foreign fees, you should read the fine print and be aware of any hidden charges
  • Pay in the local currency: When prompted during payment, you should generally avoid dynamic currency conversion (DCC) and instead opt to pay in the local currency; this will generally provide you with the most favorable exchange rate
  • Don’t spend more than you can repay: By spending within your means, you will be able to quickly pay off your credit card bill and pay minimal interest
  • Know your PIN: Some countries and merchants do not fully support contactless payment and require you to enter your PIN, so it is important to know your code
  • Avoid using ATMs: Unless your card offers free ATM withdrawals, you can generally save on fees by using your credit card at the point of sale
  • Report theft and fraud quickly: Notify your bank or card provider of any unexpected card activity as soon as possible to freeze your card and prevent financial loss
  • Tell your card issuer about your plans: You don’t need to tell your card provider that you plan to travel, but doing so may reduce the chance that they assume your card has been stolen when you begin spending money in a new location
  • Bring alternate payment methods: Even if you’re prepared, things can go wrong; having payment options apart from your credit card can prevent an emergency

Conclusion

If you plan to travel internationally or spend money outside of your country, it’s important to choose a no foreign transaction fee credit card — or a fintech debit card.

Doing so will allow you to spend money almost anywhere you go while saving money on fees and eliminating the need to manage various international currencies. 

However, it’s important to consider the features and details of each card before you choose your preferred option. Be sure to consider features such as annual interest rates and card fees as well as your ability to pay off your credit card bill when it comes time to do so.

How Payset Can Help

At Payset, we offer a global multi-currency account and foreign currency exchange, allowing you to send and receive funds internationally across multiple leading payment networks. 

We are also working on providing debit cards in the near future.

We offer support for 180 countries, plus the ability to hold 34 currencies and exchange 38 currency pairs. Specific supported currencies include the US dollar (USD), the British pound (GBP), and the euro (EUR). Supported payment networks include SWIFT, SEPA, the UK’s Faster Payments Service, CHAPS, BACS, Fedwire, and ACH.

You can also subscribe to Payset’s email newsletter to find out about our upcoming services or contact us for more info.

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Frequently asked questions

What is a multi-currency account/virtual IBAN?

A Payset multi-currency account allows you to receive money in 34 different currencies and send money in up to 38 currencies, all within the same account.

You can deposit and withdraw funds, convert currencies at competitive exchange rates, and hold your chosen currencies to capitalize on market movements.

A Payset multi-currency account allows startups and business owners to receive payments from clients virtually anywhere in the world and pay suppliers, staff, and contractors quickly and affordably in their chosen currency.

  • Funds can be deposited and withdrawn from the account for a small fee.
  • Account holders can send and receive money with other Payset users for free.
  • Depending on your region, you can use various payment networks from your Payset account, including SWIFT, SEPA, ACH, Fedwire, Faster Payments, BACS, and CHAPS. 
  • Once you register an account, you will be provided with a Virtual IBAN (International Bank Account Number), which makes all of these transfers easy.
  • We provide you with local payments and collections. For example, transactions in USD, EUR, CAD, and GBP are processed through the local payment networks, which is far cheaper and takes minutes as opposed to days

Are there limits on the amount of money I can send and receive?

No, there are no transaction limits on Payset multi-currency accounts.

However, higher-volume transactions may require additional anti-fraud verification. If you plan to make a large transaction, contact us in advance to avoid verification delays.

How is Payset regulated?

Payset allows you to receive payments in 34 currencies. You can send payments from your account in 38 currencies. For more details, check our payment guide.

How do I send money from my account?

Once you have opened your verified IBAN account and added money to a balance, transferring funds is simple.

Simply log in into your account and add a beneficiary, then simply “make a transfer” in your preferred currency to that beneficiary.

Information contained in this publication is provided for general education and information purposes only and should not be construed as legal, tax, investment or other professional advice or recommendation, or an offer of, or solicitation for, any transactions or any other actions (or refraining therefrom); This material has been prepared without taking into account any particular recipient’s financial objectives or situation. We make no warranty, guarantee or representation, whether express or implied, as to the completeness or accuracy of the information contained herein or fitness thereof for a particular purpose; Use of images and symbols is made for illustrative purposes only and does not constitute a recommendation or advice to take or refraining from any action; Use of brand logos does not necessarily imply a contractual relationship between us and the entities owning the logos, nor does it represent an endorsement of any such entity by Pay Set Limited, or vice versa; Market information is made available to you only as a service, and we do not endorse or approve it; Any reference to past performance, predicted returns, or likelihood performance scenarios may not reflect actual future performance and certainly do not guarantee future outcomes.

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