My wife and I traveled internationally a great deal last year with my work. It was a blast. We got to see so many great places and meet many interesting people.
However, while looking back at last years credit card activity a couple of things stand out as items I’d want to change for the 2008 travel season:
1) I’d like to have a separate credit card for the reimbursable expenses incurred at my corporate job; and
2) I want to find a way to avoid currency exchange fees charged by the credit card company or bank.
Oh, and the thing I don’t want to change is the ability to earn plenty of reward points off of those travel costs (mainly hotels and meals). Therefore, with these goals in mind, I’ve set off to find the right credit card.
Right now we have these two credit cards: Bank of America World Points Platinum Plus Visa and Chase Flexible Rewards Visa Card. We also have these debit/credit cards attached to our checking accounts: Bank of America My Access Checking Debit/Credit Visa and ING DIRECT Electric Orange Account MasterCard Debit Card. While we’ve enjoyed the rewards from these cards, all of them charge either a 2% or 3% currency exchange fee.
By the way, check out our debt reduction goals to get a feel for how we like to handle our credit cards. Also, see this post in my 10 Things series that explains how to get out off too much credit card debt.
OK, now the research: Here’s a June 2006 CNN Money article about Finding the Right Credit Card to Take Overseas. The author, Shaheen Pasha, provides a sampling of the policies of some of the nation’s top credit card players:
“Capital One…doesn’t charge consumers one dime in currency exchange fees for using its cards abroad…the company doesn’t even pass on the 1 percent fee it is charged by Visa and MasterCard. Bank of America and Citigroup, by comparison, charge their consumers a 3 percent currency exchange fee. For a $1,000 purchase, that adds up to $30 in additional fees.
Consumers may also want to check out credit card companies that aren’t on Visa or MasterCard’s network. Morgan Stanley’s credit card business, Discover, doesn’t pass along any currency exchange fees, while American Express charges a 2 percent fee for using its card abroad, according to spokeswomen for both companies.”
I also found this article at MSN Money which provides a similar comparison but in a list format. It’s still got Capital One and Discover with 0% and all others from 1% to 3%.
Well, it sounds like I need to check out some Capital One credit cards. It looks as if the No Hassle Miles Rewards Card might be my best option. Although, I cannot find in the disclosures where they mention any currency exchange fees. Seems like they would mention it if it was one of their big selling points. The card offers these benefits which seem to line up closest with my goals:
- Earns 25% more than regular mileage cards—1.25 miles per dollar spent on purchases
- Fly any airline, anytime with no blackout dates or seat restrictions
- Miles don’t expire for the life of your account and no limit on the miles you can earn
- Miles can be exchanged for cash
- 0% on purchases until September 2008, after that, a variable APR, as low as 9.4%
- $0 annual fee
- AND presumably $0 foreign currency exchange fees
I will still have to make a call to Capital One to clarify no fees, but all signs point to me getting this card for my international business travel. Has anyone else used this card recently?
UPDATE: I just had a chance to call Capital One and they told me that they do not have any foreign transaction fees on any of their credit cards. They also directed me to the fact section of the website which contained this:
“Does Capital One charge fees for foreign currency transactions made with a credit card? Capital One does not charge a fee for using your credit card for foreign currency transactions. Foreign purchases will be converted at the foreign exchange rate in effect at the time of posting the charge.”
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