From Miles to Smiles Stylish travel for professionals seeking luxury at affordable prices
One of my pet peeves, when I travel, is the often outrageous foreign transaction fees levied by my credit card company. Those fees can often seem excessive for the simple (electronic, I might add!) process of converting my spend into Sterling. There is however a raft of cards which offer zero charges on overseas transactions. I have always resisted these because they do not allow me to earn airmiles. Cards such as AMEX Gold and the British Airways Premium Plus card both reward each £1 of spent with 1 to 1.5 airmiles. However, it is time to work out whether these rewards are worth the cost of the overseas fees. Maybe I would be better with a zero charge travel card. So which is the best travel card to avoid ridiculous fees on payments overseas?
Typical costs
First, let us take a look at the costs I am paying using my existing credit cards. For each card, there are typically two charges. The first is a percentage of the amount of spend (see column B below). The second is the conversion rate which is based on interbank rates but may vary between different providers. The links below allow you to compare the rates for each provider. On the 27/7/19, €100 translates into the following amounts in Sterling (assuming a 2.99% fee is levied in all cases).
£92.51 – Mastercard
£92.58 – Visa
£91.54 – AMEX
Surprisingly, AMEX comes out the least expensive in this exercise but APRs on AMEX cards tend to be higher.
Comparison of my current travel reward cards
The table below shows the fees levied by each of my current reward card providers. As you can see they are pretty steep. Given that you are unlikely to ever get greater than a 1p value for your airmiles, it will always pay to leave the travel reward card at home when you travel. Instead, take a zero charge travel card as that will save you around 1.99% (2.99% less your 1% value on the miles.)
| Card | Airmiles/Membership rewards (A) | Non-sterling transaction fee (B) | Non-sterling transaction fee for cash withdrawal (C) | APR |
| AMEX Gold | 1 per £1 spend | 2.99% of the amount | 3% plus the non-sterling fee of 2.99% | 22.9% |
| British Airways Premium Plus card | 1.5 per £1 spend | 2.99% of the amount | 3% plus the non-sterling fee of 2.99% | 22.9% |
| Virgin Atlantic Rewards card* | 0.75 per £1 spend | 2.99% of the amount | 5% plus the non-sterling fee of 2.99% | 22.9% |
| Virgin Atlantic Reward+ card* | 1.5 per £1 spend | 2.99% of the amount | 5% plus the non-sterling fee of 2.99% | 22.9% |
For the sake of simplicity, I have valued each reward at 1p. It isn’t as constant as that in reality as it depends on how much value you can squeeze out of your redemptions (top tips here! and here) Also, note that although Virgin currently have an offer in place for no overseas transactions fees this is only for a limited period. Be wary of signing up for their cards if you are solely interested in free overseas transactions, as the offer expires in November. Furthermore, Virgin won’t extend this to existing customers so they obviously don’t value your loyalty.
Best travel credit card selection criteria
So, here are the best travel credit cards that I found that have zero fees. There are tons of other cards but I have deliberately restricted this list to the ones with the lowest APR unless they offer other additional benefits. If the only benefit of the card is free overseas transactions costs why would you settle for a higher APR unless it offers something extra?
I have also excluded cards that only offer free transaction fees if you pay off the balance in full. Although I always recommend you do pay off the balance in full, holidays can be expensive affairs and sometimes you may need a few months to clear the balance. If this is the case, a card that charges you is worthless!
I have however included a few cards with higher APRs where they do offer other benefits which might compensate for the extra charge. Again, I always recommend paying off the balance in full and assuming you do, you will not pay extra for the benefit of those rewards. If you do not plan to pay off in full, you will need to decide whether the additional cost is worthwhile for the extra benefits.
Travel credit cards with zero fees
| Card | Transaction fee | Cash withdrawal fees | APR | Annual fee | Other benefits |
| Natwest | 0% | 3% | 9.9% | £0 | None |
| Royal Bank Credit Card | 0% | 3% | 9.9% | £0 | None |
| Virgin Atlantic Rewards card* | 0% | 5% | 22.9% | £0 | 0.75 Flying Miles per £1 spend |
| Virgin Atlantic Rewards+ cards benefits | 0% | 5% | 22.9% | £160 | 1.5 Flying Miles per £1 spend |
| Santander Zero | 0% | 0% | 18.9% | £0 | 0% interest on all purchases for 12 months from account opening |
| Santander World Elite | 0% | 3% (£3 minimum) | 18.9% | £180 | Lots!! See here for more details. |
| B Credit card | 0% | 3% (£3 minimum) | 9.9% | £0 | None |
*This deal only applies to new customers and only until the end of November. Thereafter the 2.99% charge applies for all overseas purchases or purchases in foreign currency. In the interest of space, I have only highlighted the earnings rate for Virgin but you can read this post for full details of all the Virgin Atlantic Rewards cards benefits. Note also that the cash withdrawal charge is considerably higher than for other credit card companies.
Likewise, although Santander charge no fees for overseas cash withdrawals, all credit cards apply interest on cash withdrawals from the date of withdrawal.
So which is the best travel card?
Best travel credit card for no overseas fees if you will not repay in full
Any of the Natwest, Royal Bank credit or B cards will do the trick. They have the lowest APR of 9.9% and have zero transaction fees worldwide.
Best travel credit card for no overseas fees if you will not repay in full
Santander Zero wins in this scenario as the higher APR of 18.9% is irrelevant. It also offers 0% cash withdrawals but remember you will pay interest on cash withdrawals from the date of withdrawal.
Best travel credit card for no overseas fees and rewards
The Virgin cards win in this case but note the zero fee is an offer which expires in November. Without this offer, these cards would not feature in this list at all.
What do you think?
Maybe you use a different card which does not feature. If so, I would love to know which and why you like it. Have your say in the comments below.
I took out the Halifax Clarity Mastercard years ago, purely for foreign spend – note ‘foreign spend’, not overseas spending, as it can also be used when paying for things like the ESTA or eTA, where you have to pay in non-sterling currencies.
It seems similar to the Santander Zero, with 0 fees for foreign spend AND foreign cash withdrawals, the latter accruing interest at 18.9% from the point of withdrawal. Best bet if you HAVE to withdraw cash is to transfer funds (through an app or website or whatever) to clear your card balance as soon as you can so no interest is charged.
I’ve also recently got a Curve card, which acts kind of like an intermediary between you and your cards. The idea is you link your debit and credit cards in the app to your Curve account, for which you have a Curve card. You use the Curve card like a debit card to make purchases/withdraw cash, then have that spend attributed to whatever card in your Curve account you like.
No FEx fees or charges are made by Curve, and many – though apparently not all – credit card issuers see an ATM withdrawal as a purchase, not a cash withdrawal. I’m sure you can extrapolate that to see how that can be (ab)used astutely, which is probably why limits ae in place from Curve.
There’s also quite a natty ‘go back in time’ feature, that allows you to change where a transaction gets posted to AFTER you’ve made the purchase! For example, you buy something with the Curve card linked to credit card A for cashback benefits, then realise it would have been better directed at credit card B for meeting spend targets a day or so later. This feature allows you to move it!
Another benefit – for self employed/ small business people mainly, but also those under self assessment – HMRC treat Curve as a personal debit card, thus no charge for paying them with it – and the payment can then be linked to any credit card in your Curve account.
The biggest downside is that Curve cannot currently have AmEx linked to it. 😡
I’m planning on using the Curve when I go to the US later, though not at weekends as their is a slight surcharge on the interbank rates, linked to my cashback Halifax credit card. All the benefits of the Clarity card – but with Cashback earned! Plus, no interest on ATM withdrawals, as they are treated as purchases!!
If I was interested in Virgin miles, I could have one of their cards linked instead of Halifax and earn miles, I think.
Of course, there’s a referral scheme… so if you or anyone else is interested, sign up with code DLL8XVZD and we both get £5 credit to our Curve accounts! https://curve.page.link/oo2G
Cash, however, is often easier to spend, easier to keep track of/ budget and quicker to use. Apparently – though I’ve not yet done the maths myself – you are better off spending via a decent card than exchanging before you go!
(Slight typo, by the way, in the heading where the Santander Zero is the best choice 😉)
Thanks so much for this very long and comprehensive response (although I cannot find the typo you reference unless I am seriously going blind!!)
Funnily I wrote some time ago about Curve as I used it a lot when it first came to market but I felt with the recent changes that it was less attractive for me. I may need to revisit this payment method.
Blimey – I hadn’t realised I’d written so much!
Curve is not reaching it’s true potential for Avios fans, but could be useful for those going for Virgin miles. If they sort out their issues with AmEx, they will be a force to reckon with. Until then, being able to pay Self Assessment and VAT bills with an underlying cashback card is better than nothing…
Re: typo: compare and contrast with the previous heading 😉