Without doubt, the Chase Freedom card is one best cash back reward credit cards you can apply for these days. The card offers respectable sign-up bonuses, and it allows you to earn some pretty nice rewards for your spending. However, Chase Freedom comes with one glaring question mark: It imposes foreign transaction fees on purchases made outside the U.S.
But Just how big a hindrance is the Chase Freedom foreign transaction fee to what is, otherwise, an excellent credit card?
- Benefits Of The Chase Freedom Card
- The Limits Of The Chase Freedom Card
- Which Chase Cards Offer No Foreign Transaction Fee?
- Other Credit Cards with No Foreign Transaction Fee
- How To Choose The Right No Foreign Transaction Fee Credit Card
And is that fee worth paying in order to have the Chase Freedom card in your wallet.
Benefits Of The Chase Freedom Card
Let’s start by laying out what are some pretty awesome benefits associated with this card:
- $150 cash-back sign up bonus after spending just $500 on the card in the first 3 months – a whopping 30% cash-back bonus.
- Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate and unlimited 1% cashback on all other purchases. Through June, the bonus category is grocery stores and home-improvement stores. Categories for the third and fourth quarters have not yet been announced.
- Cash back rewards never expire, and you can redeem the cash at any time, regardless of amount.
- 0% interest rate for first 15 months after account opening on all purchases and balance transfers (though you will pay a fee of as much as 3% of the value of the balance that you transfer).
- No annual fee.
Taken as a whole, those are some prime benefits in the world of credit cards.
But, as I said, there is that one, glaring issue with the Chase Freedom Card…
The Limits Of The Chase Freedom Card
The Chase Freedom foreign transaction fee is not an insignificant matter.
The world is a much-smaller place these days, and people are hopping on airplanes in record numbers to venture about the world, even if it’s something as quick and simple as a long-weekend in the Caribbean.
Whip out your Chase Freedom card to pay for your expenses while you’re outside the U.S., and Chase will ding you with pay a foreign transaction fee equal to 3% of each transaction in U.S. dollars% of the price of whatever you purchase – hotel rooms, meals, transportation, souvenirs, whatever.
While that might not sound like much, the fee can really add up. CreditDonkey reported last year that the average cost of a family holiday overseas is about $4,580. The Chase Freedom foreign transaction fee applied across that cost means you’re paying an extra $137 for no reason, just for that one trip.
And it’s not just physical travel we’re talking about here. There’s also electronic travel.
Thanks to the Internet, we can now buy goods and services online all over the world. Every day, the average Americans spends almost two hours shopping online, according to Finder.com, and in 2019 online retail sales globally are expected to top $3 trillion. It’s hard to say how much money the average American spends shopping at online sites overseas, but an online transaction at an overseas retailer is subject to Chase Freedom’s foreign transaction fee as well. So, there’s more money out of your pocket for no reason.
If you’re a global traveler, or if you regularly purchase items online from overseas sellers, you have better options for a credit card than the Chase Freedom card.
What you want is a no foreign transaction fee credit card. And these days, those no foreign transaction fee credit cards are plentiful … even within Chase.
Which Chase Cards Offer No Foreign Transaction Fee?
Chase offers several credit cards that impose no foreign transaction fee. It just depends on what you want, or if you are loyal to a particular airline. The only downside is that all of them charge an annual fee of $95 to $99.
Chase Sapphire Preferred:
- No foreign transaction fee.
- 60,000 bonus points after spending $4,000 on the card in the first months (that’s worth $750 toward travel when redeeming the points through Chase Ultimate Rewards).
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value from your points when you redeem through Chase Ultimate Rewards, meaning, for example, you get 1,250 worth of value for each 1,000 points redeemed.
- $95 annual fee.
Southwest Rapid Rewards Premier Card:
- No foreign transaction fee.
- 40,000 bonus points after spending $1,000 in the first months.
- 2 points per $1 spent on Southwest purchases. x points on Southwest Airlines purchases; 1x on everything else.
- 6,000 bonus points after your cardmember anniversary points every year on card anniversary.
- $99 annual fee.
United Explorer Card:
- No foreign transaction fee.
- Earn 40,000 Bonus Miles after you spend $2,000 on purchases in the first 3 months your account is open. Plus, earn an additional 20,000 Bonus Miles after you spend $8,000 total on purchases in the first 6 months after your account is open.
- Earn 2 miles per $1 spent on tickets purchased from United.x miles at hotels, restaurants and for United Airlines purchases.
- 1x miles on everything else.
- Free checked bag for cardmember and companion on United-operated flights.
- Priority boarding.
- 2 United Club passes on each anniversary.
- Up to $100 credit when you use your card to pay for Global Entry or TSA PreCheck.
- 25% back as a statement credit on all United inflight purchases, including food, beverage and onboard WiFi.
- Annual fee: $0 first year $95 after that.
Ink Business Preferred Card:
- No foreign transaction fee.
- 80,000 bonus points after you spend $5,000 on purchases in the first 3 months after account opening. That's $1,000 toward travel rewards when you redeem through Chase Ultimate Rewards®.
- 3x points on the first $150,000 in spending each year on travel, shipping, telecom services (Internet, cable, phone), and advertising purchases made with social-media sites and search engines.
- Unlimited 1x points on everything.
- Get 25% more value from your points when you redeem through Chase Ultimate Rewards, meaning, for example, you get 1,250 worth of value for each 1,000 points redeemed.
- Annual fee: $95.
Other Credit Cards with No Foreign Transaction Fee
Of course, Chase isn’t the only company offering no foreign transaction fee credit cards. You will find these cards all over the place.
And if you do any level of travel overseas, you absolutely want to consider what are the best credit cards for international travel.
As a global travel myself – and a long-time financial writer – here are a few non-Chase cards that I think are worthy of consideration:
Capital One VentureOne Rewards Card:
- No foreign transaction fee.
- 50,000 bonus miles after spending $3,000 in first 3 months.
- 2x miles on every purchase.
- $0 intro for first year; $95 after that thereafter.
Barclaycard Arrival Plus World Elite Mastercard:
- No foreign transaction fee.
- Enjoy 70,000 bonus miles after spending $5,000 on purchases in the first 90 days bonus miles after spending $5,000 in the first months.
- Unlimited 2x miles on all purchases.
- Redeem miles for travel of cash-back statement credit, gift cards or merchandise.
- 5% points back each time you redeem.
- Annual fee: $89(waived first year).
HSBC Cash Rewards Mastercard:
- No foreign transaction fee.
- $0 cash bonus after spending $10,000 in the first 12 months.
- 1.5% cash back on every purchase.
- 10% anniversary cash back bonus on all cash rewards earned during the year.
- 0% interest rate on all purchases and balance transfers in the first 15 months after account opening. (Balance transfer fee is up to 10% of the value of the transfer).
- No annual fee, no foreign transaction fees.
CitiBusiness® / AAdvantage Platinum Select World Mastercard:
- No foreign transaction fees.
- 60,000 bonus miles after spending $4,000 in the first 4 months.
- 2x miles on cable, satellite and select telecom providers, as well as on eligible American Airlines purchases, gas stations and car rentals.
- 1x on everything else.
- First checked bag free on domestic flights for you and up to 4 traveling companions. Preferred boarding on American Airlines flights. 25% savings when using the card for inflight food, beverage and onboard WiFi.
- Annual fee: $99, waived for first 12 months.
How To Choose The Right No Foreign Transaction Fee Credit Card
Honestly, the choice here really boils down to how you travel.
If you’re looking for the best credit cards for international travel, then you have to ask yourself: Do I want to be loyal to one particular airline? If so, I would argue you want a credit card associated with that air carrier. You will get the best of both worlds: No foreign transaction fee, and bonus miles and other perks for signing up with and for purchases with that particular airline.
If you are not loyal to any one carrier, then I would say either the Chase Sapphire Preferred or the Barclaycard Arrival Plus World Elite Mastercard are the way to go. They both offer sizeable sign-up bonuses, and 2x points on all purchases, easily putting them ahead of the others.
The Wrap Up
The Chase Freedom Card is a top-notch credit card for a lot of consumers. But the 3% foreign transaction fee it charges is an unnecessary tax that international travelers can avoid by choosing a better credit with no foreign transaction fees.
But we want to know: If you travel internationally, do you ever stop to consider the foreign transaction fee you’re paying – or does it not matter to you?
Let us know in the comments below.