Using the wrong card abroad can cost you 3% to 5% on every transaction through foreign transaction fees alone, plus another 1% to 3% through unfavourable exchange rates. Over a two-week holiday, that adds up fast.
Travel credit cards solve this problem by offering no foreign transaction fees, near-perfect exchange rates, and additional protections that debit cards cannot match. This guide explains which cards to use where, how to avoid common pitfalls, and the US, UK, and Canadian specific advice you need before you fly.
What Makes a Card Good for Travel?
A travel credit card has three core advantages over a regular card:
No Foreign Transaction Fees
Foreign transaction fees (also called FX fees or international transaction fees) are charged by most credit cards when you make a purchase in a foreign currency. They typically range from 2.5% to 3.5% in the UK, 2.5% to 3% in the US, and 2.5% in Canada.
A travel card with no foreign transaction fees eliminates this cost entirely. On a 2,000 holiday spend, that saves you 50 to 70 immediately.
Near-Perfect Exchange Rates
When you pay in a foreign currency, your card network (Visa, Mastercard, or Amex) converts the charge to your home currency using their own exchange rate. Visa and Mastercard rates are typically within 0.1% to 0.3% of the interbank (wholesale) rate, which is the best rate you can get.
American Express tends to add a slightly wider margin, but still offers competitive rates for cardholders.
Travel Protections
Travel credit cards often include benefits that protect you while abroad:
- Purchase protection: Covers damage or theft of items bought with the card
- Travel insurance: Covers trip cancellation, medical emergencies, and lost luggage
- Extended warranty: Extends manufacturer warranties on purchases
- Car rental insurance: Covers damage to rental vehicles
- Emergency assistance: 24/7 support for lost cards or travel emergencies
Best Travel Credit Cards in the US
Chase Sapphire Reserve
- Annual fee: $550
- Foreign transaction fee: None
- Earning rates: 10x on hotels and car rentals via Chase, 5x on flights via Chase, 3x on dining and travel, 1x everything else
- Sign-up bonus: 60,000 points after spending $4,000 in 3 months
- Travel perks: $300 annual travel credit, Priority Pass lounge access, Global Entry/TSA PreCheck credit, trip delay insurance, lost luggage reimbursement
Why it stands out for travel: The $300 travel credit applies automatically to any travel purchase, effectively reducing the annual fee to $250. Points are worth 50% more when redeemed through Chase for travel. The 3x earning rate on all travel and dining makes it a strong everyday card for travellers.
Capital One Venture X
- Annual fee: $395
- Foreign transaction fee: None
- Earning rates: 10x on hotels and car rentals via Capital One, 5x on flights via Capital One, 2x on everything else
- Sign-up bonus: 75,000 miles after spending $4,000 in 3 months
- Travel perks: $300 annual travel credit, Priority Pass lounge access, 10,000 bonus miles annually, Hertz President’s Circle status
Why it stands out for travel: The 2x flat rate on all non-travel spending is the highest flat rate among premium travel cards. The $300 travel credit plus 10,000 annual bonus miles (worth $100) effectively make the card pay for itself. Capital One’s transfer partners include British Airways, Singapore Airlines, and Turkish Airlines.
Bank of America Travel Rewards
- Annual fee: $0
- Foreign transaction fee: None
- Earning rates: 1.5x on everything, 3x on travel booked through Bank of America
- Sign-up bonus: 25,000 points after spending $1,000 in 90 days
- Travel perks: No annual fee, points never expire, no foreign transaction fees
Why it stands out for travel: A no-fee card with no foreign transaction fees is rare. The 1.5x flat rate is lower than premium cards, but for occasional travellers who do not want to pay an annual fee, this is the best option. Points are worth 1 cent each when redeemed for travel.
Best Travel Credit Cards in the UK
Barclaycard Avios Plus
- Annual fee: £12/month (£144/year)
- Foreign transaction fee: None within Europe, 2.99% outside Europe
- Earning rates: 1.5 Avios per £1 spent, 3 Avios per £1 on British Airways
- Sign-up bonus: Varies (typically 5,000 to 25,000 Avios)
- Travel perks: Companion voucher after spending £12,000/year, BA cabin upgrade voucher
Why it stands out for travel: The companion voucher alone can be worth hundreds of pounds. Earn Avios on overseas spending within Europe at no extra cost. The 2.99% fee outside Europe is a drawback for long-haul travel, so pair this with a no-FX-fee card for trips outside Europe.
HSBC Premier World Elite Mastercard
- Annual fee: £0 (requires HSBC Premier account)
- Foreign transaction fee: None
- Earning rates: 1 Avios per £1 spent
- Travel perks: Worldwide travel insurance, airport lounge access (4 visits/year via LoungeKey), no foreign transaction fees
Why it stands out for travel: No foreign transaction fee on all spending worldwide. The included travel insurance and lounge access make this one of the best value travel cards in the UK. Requires an HSBC Premier account, which has its own eligibility criteria.
First Direct Credit Card
- Annual fee: £0
- Foreign transaction fee: None
- Earning rates: 0.5% cashback on all spending
- Travel perks: No foreign transaction fees, worldwide acceptance
Why it stands out for travel: The simplest option for UK travellers. No annual fee, no foreign transaction fees, and a modest 0.5% cashback rate. First Direct is part of the HSBC group, so it benefits from the same exchange rate infrastructure. Ideal as a travel card for people who do not want complexity.
Revolut Card (Not a Credit Card)
- Annual fee: £0 (Standard), £5.99 (Plus), £11.99 (Premium), £25 (Metal)
- Foreign transaction fee: None on weekday exchanges up to limits
- Exchange rate: Interbank rate on weekdays, small markup on weekends
- Travel perks: Fee-free ATM withdrawals up to limits, virtual cards for online spending
Important note: Revolut is not a credit card. It is a prepaid debit card linked to a current account. However, it deserves mention because it offers the best exchange rates available to UK travellers. The interbank rate on weekday exchanges is unbeatable, and the fee-free ATM withdrawals are generous.
Best Travel Credit Cards in Canada
Scotiabank Gold American Express
- Annual fee: $150
- Foreign transaction fee: None
- Earning rates: 5x on groceries, 3x on dining, 3x on entertainment, 3x on gas, 1x everything else
- Sign-up bonus: 40,000 Scotia Rewards points after spending $1,000 in 3 months
- Travel perks: No foreign transaction fees, Scene+ integration, travel emergency assistance
Why it stands out for travel: The no-foreign-transaction-fee benefit saves 2.5% on all overseas spending. The 5x grocery earning rate is the highest in Canada, making this a strong card for everyday spending at home too. Amex acceptance can be limited abroad, so pair with a Visa or Mastercard.
TD First Class Travel Visa Infinite
- Annual fee: $139 (first year waived)
- Foreign transaction fee: None
- Earning rates: 3x on travel and dining, 1x everything else
- Sign-up bonus: Up to 80,000 TD Rewards points
- Travel perks: $100 annual travel credit, Priority Pass membership, trip cancellation insurance, auto rental collision damage coverage
Why it stands out for travel: No foreign transaction fees with Visa acceptance worldwide. The Priority Pass lounge access adds comfort for frequent travellers. The $100 annual travel credit effectively reduces the fee to $39 after the first year.
BMO Ascend World Elite Mastercard
- Annual fee: $250
- Foreign transaction fee: None
- Earning rates: 5x on travel, 3x on dining, gas, and transit, 1x everything else
- Sign-up bonus: 60,000 BMO Rewards points after spending $3,000 in 3 months
- Travel perks: Priority Pass lounge access (4 visits/year), travel insurance, auto rental coverage
Why it stands out for travel: The 5x travel earning rate is among the highest in Canada. No foreign transaction fees with Mastercard acceptance worldwide. The lounge access and travel insurance make this a comprehensive travel card.
How to Avoid Dynamic Currency Conversion
Dynamic currency conversion (DCC) is a practice where merchants or ATMs offer to charge you in your home currency instead of the local currency. This seems convenient but typically costs 3% to 8% more than paying in the local currency.
How DCC Works
- You make a purchase abroad for 100 euros.
- The terminal asks: “Pay in euros (100) or your home currency (115)?”
- If you choose your home currency, the merchant converts at their own rate (usually 3% to 8% worse than the card network rate).
- Your card then charges you in your home currency, so there is no foreign transaction fee — but you have already paid the inflated DCC rate.
How to Avoid It
Always pay in the local currency. When given the choice, select the local currency option. Your card’s exchange rate will almost always be better than the merchant’s DCC rate.
At ATMs, always choose to be charged in the local currency. Some ATMs default to DCC, so read the screen carefully before confirming.
In online shops, check whether the site offers to charge you in your home currency. If it does, decline and let your card handle the conversion.
US, UK, and Canada: Country-Specific Advice
United States
- Foreign transaction fees vary widely by card. Always check before travelling.
- Chip and PIN is standard in most countries, but some US cards are chip-and-signature. This can cause problems at unattended kiosks (train stations, parking meters) in Europe and Asia.
- Contactless payments (tap to pay) are widely accepted abroad. Make sure your card has contactless capability.
- Travel insurance is not included with most US credit cards unless you have a premium card. Consider purchasing separate travel insurance for international trips.
- ATM access is good globally with Visa and Mastercard. American Express ATMs are limited outside major cities.
United Kingdom
- Section 75 protection applies to credit card purchases between 100 and 30,000. This makes credit cards significantly safer than debit cards for large purchases abroad.
- Chip and PIN is universal. All UK cards use PIN authentication, which works globally.
- Contactless payments are accepted almost everywhere in Europe, Australia, and increasingly in Asia and the Americas.
- Revolut and Monzo offer excellent exchange rates and fee-free spending, but they are debit cards with weaker protections than credit cards. Use them for convenience, not for large purchases.
- Amex acceptance is limited in many European countries, especially outside tourist areas. Always carry a Visa or Mastercard as backup.
Canada
- Foreign transaction fees of 2.5% are standard on most Canadian credit cards. No-FX-fee cards are rare and valuable.
- Interac debit does not work internationally. You need a Visa Debit or Mastercard Debit for international debit transactions.
- Chip and PIN is universal. Canadian cards work seamlessly in Europe and most other countries.
- Travel insurance is commonly included with premium Canadian credit cards. Check your card’s coverage before purchasing separate insurance.
- Amex acceptance is strong in Canada but limited in some international markets. Carry a Visa or Mastercard as backup.
The Best Travel Card Setup
No single card is perfect for every travel situation. The best approach is to carry two or three cards that complement each other.
For US Travellers
- Chase Sapphire Reserve as your primary travel card (no FX fees, 3x on travel and dining, lounge access)
- Discover it as backup (no FX fees, but limited acceptance outside the US)
- A Visa debit card from your bank for ATM withdrawals abroad
For UK Travellers
- HSBC Premier World Elite Mastercard or First Direct as your primary card (no FX fees worldwide)
- Revolut for day-to-day spending abroad (best exchange rates on weekdays)
- Barclaycard Avios for British Airways bookings and Avios earning
For Canadian Travellers
- Scotiabank Gold American Express or TD First Class Travel as your primary card (no FX fees)
- A Mastercard or Visa as backup for when Amex is not accepted
- A Canadian bank debit card for ATM withdrawals (check your bank’s international ATM fees)
Quick Comparison: Travel Cards at a Glance
| Card | Country | Annual Fee | FX Fee | Key Travel Benefit |
|---|---|---|---|---|
| Chase Sapphire Reserve | US | $550 | None | $300 travel credit, lounge access |
| Capital One Venture X | US | $395 | None | $300 travel credit, 2x everywhere |
| Bank of America Travel Rewards | US | $0 | None | No fee, 1.5x everywhere |
| Barclaycard Avios Plus | UK | £144/year | None in Europe | Companion voucher, 3x on BA |
| HSBC Premier World Elite | UK | £0 | None worldwide | Travel insurance, lounge access |
| First Direct | UK | £0 | None worldwide | Simple, no fees, 0.5% cashback |
| Scotiabank Gold Amex | CA | $150 | None | 5x groceries, no FX fee |
| TD First Class Travel | CA | $139 | None | Priority Pass, $100 travel credit |
| BMO Ascend World Elite | CA | $250 | None | 5x travel, Priority Pass |
Final Thoughts
The right travel credit card saves you money on every transaction abroad, protects your purchases, and earns rewards on travel spending. The wrong one charges you 3% to 5% on everything and offers nothing in return.
Check your current cards for foreign transaction fees. If they charge one, apply for a no-FX-fee card before your next trip. The savings accumulate immediately, and the protections are worth their weight in peace of mind.
Always pay in local currency, always carry a backup card, and always let your card issuer know you are travelling. Do these three things and your money goes further wherever you go.