Booking international travel can be costly, but with a little advanced planning you can use a credit card to save money. One of the biggest mistakes credit cardholders make abroad is using a card that charges foreign transaction fees, which average 3% per purchase.
If you spend $1,000 on purchases during your overseas vacation, you'll pay $30 in fees that can easily be avoided by using a credit card with no foreign transaction fee. There are many financial steps to take before an international trip, and you can check off choosing the right credit card by considering one of the options mentioned below. (See our methodology for more information on how we choose the best cards.)
CNBC Select reviewed popular rewards credit cards to find the best options for people who are traveling outside the U.S., so you can maximize rewards and save on unnecessary fees. All of the cards mentioned below have no foreign transaction fees.
4X Membership Rewards® points on restaurants worldwide (including takeout and delivery, plus, Uber Eats purchases) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel.com, 1X points on all other purchases
60,000 Membership Rewards® points after you spend $4,000 on eligible purchases within the first 6 months from account opening
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Who's this for? If you love food and travel, the American Express® Gold Card could be the ideal rewards card for you. Cardholders earn a competitive 4X points per dollar spent at restaurants worldwide and 4X points at U.S. supermarkets (on up to $25,000 per year in purchases, then 1X). Plus, earn 3X points on flights booked directly with airlines or on amextravel.com.
Cardholders also receive an annual dining credit of up to $120 ($10 a month) at participating partners, including Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed and participating Shake Shack locations.
This card does have a $250 annual fee, but it can be reduced to effectively $130 if you take advantage of the $120 dining credit each year. Then, the rewards you earn help further "pay" for the card.
Cardholders can also benefit from Amex Offers, where you can earn statement credits or bonus Membership Rewards® points at select retailers. Travelers will appreciate that there's no foreign transaction fees as well as the insurance for car rentals and damaged, lost or stolen luggage.
Check out CNBC Select's best rewards credit cards.
3X points on dining out and ordering in; gas, rideshares and transit; flights, hotels, homestays and car rentals; and popular streaming services. 1X points on all other purchases
20,000 bonus points when you spend $1,000 in purchases in the first 3 months
0% APR for 12 months on purchases and qualifying balance transfers
14.49% to 24.99% variable on purchases and balance transfers
Introductory fee of 3% ($5 minimum) for 120 days, then 5% ($5 minimum)
Who's this for? The Wells Fargo Propel American Express® Card offers a strong rewards program for frequent travelers all at no annual fee. Cardholders earn 3X points per dollar spent on dining out, ordering in, travel, and a number of streaming services, including Apple Music, Hulu, Netflix and Spotify Premium. Those kinds of rewards are hard to find among no annual fee cards.
The travel rewards are unique since it gives you points not just on flights and hotels but also car rentals, homestays and ridesharing services. There are no blackout dates on flights booked through Go Far® Rewards.
There's also an impressive welcome bonus for a no-annual-fee card: Earn 20,000 points after you spend $1,000 within the first three months. That's equivalent to $200 in cash.
The additional perks geared toward travelers are worth noting: Cardholders can take advantage of lost luggage reimbursement, car rental loss and damage insurance, roadside assistance, 24/7 travel and emergency assistance and no foreign transaction fees.
This card also provides a year of no interest on purchases and balance transfers (after a 14.49% to 24.99% variable APR). If you have expected upcoming expenses that you want to pay for over time, or you're looking to consolidate credit card debt, the Wells Fargo Propel American Express® Card can help you finance debt without incurring interest charges.
4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
Earn a one-time $300 cash bonus once you spend $3,000 on purchases within the first three months from account opening
0% for the first 12 months on purchases; N/A on balance transfers
15.99% to 24.99% variable
3% for promotional APR offers; none for balances transferred at regular APR
Who's this for? Travelers who love to eat out can't go wrong carrying a dining rewards card. The Capital One® Savor® Cash Rewards Credit Card offers 4% cash back on dining purchases. This is one of the highest rewards rates on dining available, and Capital One classifies dining as restaurants, cafes, bars, lounges, fast-food chains and bakeries. Plus, you can enjoy foodie-centric perks, such as exclusive access to premium reservations with OpenTable. And no worries if you're dining overseas, this card doesn't charge foreign transaction fees.
You can also earn 4% cash back on entertainment spending, whether you're buying movie tickets, taking a family trip to the zoo or spending the evening bowling with friends. Through January 2022, cardholders who buy tickets through Vivid Seats, a ticket resale site, can take advantage of 8% cash back.
Cardholders benefit from exclusive access to dining, sports and entertainment events, such as the iHeartRadio Music Festival and the Capital One JamFest. Beyond dining and entertainment perks, there's also 2% cash back at grocery stores and 1% on all other purchases.
This card does come with a $95 annual fee, but it can be offset by the cash back you earn.
Check out CNBC Select's best credit cards for dining out and restaurants.
5X miles on hotel and rental cars booked through Capital One Travel℠, 1.25X miles per dollar on every purchase
20,000 bonus miles once you spend $1,000 on purchases within the first 3 months from account opening
0% APR for 12 months on purchases
15.49% to 25.49% variable
3% for promotional APR offers; none for balances transferred at regular APR
Who's this for? Anyone looking to book hotel rooms should consider the Capital One® VentureOne® Rewards Credit Card with its impressive offer 5X miles on hotel and rental cars booked through Capital One Travel℠. Cardmembers can earn unlimited 1.25X miles on all other purchases, making it a solid choice for everyday use. The card has no annual fee and charges no foreign transaction fees.
Another perk is the intro 0% APR period, which lasts for 12 months for new purchases (after a 15.49% to 25.49% variable APR). This can come in handy if you want to pay for a vacation over the course of a year and avoid interest charges.
The Capital One® VentureOne® Rewards Credit Card offers new users a strong welcome bonus: 20,000 bonus miles after they spend $1,000 on purchases within the first three months. You can redeem miles for past travel expenses using the Purchase Eraser®, which is essentially a statement credit. Or you can book new travel reservations through the Capital One Rewards Center.
Additionally, with this card, it's possible to transfer your miles to any of Capital One's partner airlines, including JetBlue, Emirates Skywards, Air Canada and Air France. (Read how to make the most of your airline miles.)
10X points on Lyft rides through March 2022, 3X points on travel worldwide (immediately after earning your $300 annual travel credit), 3X points on dining at restaurants including eligible delivery services, takeout and dining out, 1X point per $1 on all other purchases
50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening — worth up to $750 toward travel when you redeem through Chase Ultimate Rewards®
16.99% to 23.99% variable
5%, minimum $5
Who's this for? The Chase Sapphire Reserve® is geared toward foodies and frequent travelers who are looking for luxurious perks, such as annual travel credits, airport lounge access and complimentary hotel room upgrades. You can take advantage of an annual $300 travel credit, which can cover everything from airfare and hotels to parking and tolls.
Cardholders earn 3X points on travel worldwide (immediately after earning your $300 annual travel credit) and on dining at restaurants worldwide and 1X point per $1 on all other purchases. Points are worth 50% more when redeemed for travel via Chase Ultimate Rewards®. For example, 50,000 points are worth $750 redeemed toward airfare, hotels, car rentals and cruises when you redeem through Chase Ultimate Rewards®. This perk is a great way to get the most value for your rewards.
Chase recently added new Lyft perks including 10X points on Lyft rides through March 2022 and a complimentary year of Lyft Pink membership (worth $19.99 per month). Lyft Pink includes 15% off car rides, relaxed cancellations, priority airport pickups, up to three free 30-minute bike and scooter rides per month and more.
While this card has a robust rewards program, it also comes with a steep $550 annual fee. All the card's added credits and benefits provided by Chase can help offset the cost. The $300 annual travel credit effectively reduces the annual fee to a more manageable $150. Cardholders can take advantage of a Priority Pass™ Select membership that has a value of about $429, as well as Global Entry or TSA PreCheck application fee credit of up to $100 every four years.
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
Dollar-for-dollar match of all cash back earned the first year
N/A on purchases
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
New / Rebuilding
Who's this for? If you have no credit history or bad credit (scores below 580), a secured card may be your best option. The Discover it® Secured Credit Card is a well-rounded secured card that offers many benefits that are typically found with unsecured cards. Cardholders can earn cash back, receive a generous welcome bonus, use the card overseas without incurring added fees and more — all for no annual fee.
Cardholders earn a competitive 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%. Plus, you can earn unlimited 1% cash back on all other purchases automatically. The welcome bonus is also unique: For new card members in the first year only, Discover will automatically match all the cash back you've earned at the end of your first year. So, if you earn $50 cash back at the end of the first year, Discover will give you an additional $50.
This card requires a $200 security deposit, which is fairly standard for secured credit cards. It stands out from the crowd because it gives users a clear path to upgrading to an unsecured card (and getting their deposit back). Starting at eight months from account opening, Discover will automatically review your credit card account to see if they can transition you to an unsecured line of credit and return your deposit. This takes the guesswork out of wondering when you'll qualify for an unsecured credit card.
To determine which cards will put the most money back in your pocket, CNBC Select evaluated 127 popular rewards credit cards offered by major banks, financial companies and credit unions that allow anyone to join. We compared each card on a range of features, including travel rewards (points and miles), annual fee, welcome bonus, introductory and standard APR, one-time perks, annual perks, redemption rates, as well as factors such as required credit and customer reviews when available.
CNBC Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.
Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
We then estimated how much the average consumer would redeem over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.
It's important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)
Our final picks are weighted heavily toward the highest five-year returns, since it's generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.
While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your travel habits.
For rates and fees of the Discover it® Secured Credit Card, click here.