Benefits of No Foreign Transaction Fee Credit Cards
There are certain cards that are classified as no foreign transaction fee credit cards. They are classified such way as you don’t need to pay any fee for using the card outside United States or outside your country if you are non-US cardholder. The usual thing is that, when you use your regular credit card outside US, you are charged a fee for converting your dollar into the currency of that country. However, this time around, you don’t need to make any foreign exchange by yourself. The conversion will be done automatically. Even if you are paying in dollars, you will still be charged a fee as long as the payment processing will have to pass through another foreign bank. The disadvantage of this is not just about the fee, it means you will have fewer amounts available for spending. But if you hold a no foreign transaction fee credit card, this fee will be waived for you. Apart from this, you will be able to convert the currency at a favourable rate. You won’t need to stress yourself on the issue of foreign exchange. Therefore, you will not need to carry much cash with you. This makes your money to be more secure.
Who Need No Foreign Transaction Fee Credit Cards?
You need to understand that there are different types of credit cards in the market. If you have a very good credit score, you will constantly get credit card offers in your mail box. However, the fact that you are offered a particular card does not mean that you should go ahead to apply for the card. It is your responsibility to determine the one that will suit you and help you achieve your objective. Just like the way a 50% cut in an airline ticket may be useless to you if you don’t plan to travel, the same way the credit cards with no foreign transaction fees may not be a good card to you. So, who actually needs this type of card? If you belong to the group of people discussed below, you will definitely need the card.
If you travel very often, I mean trips outside US or your country; you will need a credit card that charges no foreign transaction fee. I don’t mean people that travel just once in a year. If you don’t travel regularly, you may not be able to enjoy the full benefits of the card. In most cases, no foreign transaction fee credit cards attract annual fee. The annual fee you will pay on the card may wipe away the foreign transaction fee you are trying to save. But for people that travel abroad often and make purchases, having a credit card with no foreign transaction fee will help you save some costs. Besides, you can enjoy other benefits such as annual air credit bonus and other benefits which will be discussed later.
There is this misconception about no foreign transaction fee credit cards. People think that it is just meant for overseas travellers only. This is a myth. There are people who have never travelled outside the shore of United States that use the card. If you use your regular credit card to buy things online from other countries, you might discover that you are charged a particular fee for the transactions. It is actually the cost of processing the payment from another bank. So, one of the ways to lower charges you pay on your credit card is to get a card that charge no fee on foreign transactions you make whether online or abroad.
Other benefits that you can enjoy by using no foreign transaction fee credit cards are:
- Travel Assistance: Please note that this is different from travel insurance. Therefore, it doesn’t cancel or replace the need to buy travel insurance any time you want to travel. But having a travel card that provides travel assistance may help you reduce your travel insurance rate. The kind of travel assistance a travel credit card that charge no foreign transaction fee provides may include lost or delayed baggage tracking; emergency medical evacuation and repatriation; replacement of lost or forgotten prescriptions. Other benefits may include provision of access to a medical help line, emergency travel arrangements. In case you lost your card, you can be provided emergency cash advances and credit card replacement
- Concierge Services: You can enjoy the services of a concierge to assist you perform various tasks such as making restaurant reservations, booking hotels and arranging for spa services. If you are in a country that you know little or nothing about, a concierge can help recommend night life hot spots or book transportation or travel arrangements and tours to local attractions.
- Identity Theft Recovery: If you never suffered identity theft, you may not know the impact it may have on you and your finance. Your card issuer may help you recover your identity and guide you the appropriate steps you need to take.
- Roadside Assistance: Anything that is mechanically propelled can develop faults at any time. If your vehicle suddenly breaks down, having the assurance that you cannot be stranded and that you will get the needed assistance immediately to get you to where you are going can go a long way in making your trip pleasurable.
- Extended Warranty: In some cases, customers do enjoy warranty on purchases they make. However, the period of the warranty provided by the manufacturers may not be long enough. Some items usually develop faults after the expiration of the warranty period. Part of the benefits some credit cards with no foreign transaction fees make available to their customers is the provision of extended warranty. If the original warranty from the manufacturer is one year, the credit card company may provide you a one year additional warranty.
- Purchase Assurance: One of the disadvantages of making online purchase is that, the thing you are buying may not actually reflect exactly what you have in mind. On the other hand, the product may suffer some defects which may necessitate that you return the item. Even though most of the companies that sell things online have return or refund policies, there is no hundred per cent assurance that you will get refund from the company. But if your card provides purchase assurance, you can rest assured that you are safe using your card for online purchase.
Before I conclude this article, it is important that you understand that credit cards with no foreign transaction fees will still charge you if you use the card to withdraw cash. This is called cash withdrawal fee. The interest rate on cash withdrawal can be high. Therefore, it will be better that you still travel with cash no matter how little. You may find yourself in a situation that will require that you pay with cash. You may even discover that your credit card has been lost or stolen. If you don’t want to carry too much cash, it may be nice to travel with your debit card as a backup. You can even make a photocopy of your credit card for two reasons. First, if you lose your card, you can still have access to the customer service you can quickly reach out to. Second, you will still be able to make online purchase as you only need your card number with the security codes. However, keeping a photocopy of your credit card comes with additional risk. You should protect the photocopy the same way you would protect the card itself.