Money & Banking

Intermediate

6 min read 7 stepsMay 8, 2026Verified May 2026

How to Use a Travel Credit Card Without Getting Tripped Up by Fees

Pick the right travel card, avoid foreign transaction fees, and use rewards points to lower trip costs without falling into common traps.

At a Glance

Pick a card with no foreign transaction fee

~42s

If any part of the trip is outside the United States — including a cruise that stops in foreign ports — the card must have a 0% foreign transaction fee. Cards that charge 3% include most Bank of America cash-back cards, most basic Citi cards, and many store cards. Cards with 0% include every Capital One card, Chase Sapphire Preferred and Reserve, and every Discover card (though Discover is rarely accepted overseas). Check the cardholder agreement under "Foreign Transaction Fee" or call the number on the back of the card.

Warning

Cruise lines bill in US dollars even when the ship is overseas, so cruise charges usually do not trigger foreign transaction fees. But port-of-call shops, taxis, and restaurants on shore do. Always carry a no-foreign-fee card for shore days.

Read the annual fee and decide if it pays for itself

~29s

Annual fees range from $0 (Capital One VentureOne, Wells Fargo Autograph) to $95 (Chase Sapphire Preferred, Capital One Venture) to $550 to $695 (Chase Sapphire Reserve, Amex Platinum). A fee makes sense only if the card's perks save you more than the fee each year. A $95 fee that comes with one free hotel night worth $200 pays for itself. A $550 fee that comes with airport-lounge access you use twice a year may not. Make the math match your travel pattern.

Notify the card company of travel dates

~27s

On the card's app or website, look for "Travel Notice," "Trip Notification," or under Account Services. Enter the destinations and dates. This stops the fraud-detection software from declining your card the first time it is used in another state or country. Most major cards (Chase, Amex, Capital One) no longer require travel notices because their fraud software has been updated, but smaller banks and credit unions still do. When in doubt, file the notice — it takes 2 minutes.

Pay in local currency at every overseas terminal

~33s

When you pay with a card outside the US, the credit-card terminal often asks: "Pay in US dollars or local currency?" Always pick local currency. The "US dollars" option is called Dynamic Currency Conversion, and the merchant's bank sets the exchange rate — usually 5% to 8% worse than your card's rate. Picking local currency lets your own card use the wholesale Visa or Mastercard rate, which is within 1% of the real exchange rate.

Quick Tip

The same rule applies to overseas ATM screens that ask if you want to be charged in US dollars. Always say no, always pick local currency.

Never use the credit card for cash advances

~42s

Pulling cash from an ATM with a credit card triggers a cash-advance fee (usually 5% or $10, whichever is greater) plus interest at 25% to 29% that starts accruing the same day. There is no grace period. A $200 ATM withdrawal can cost $15 in fees and $4 in same-day interest. Use a debit card from your checking account for ATM withdrawals, or carry the cash you need before the trip.

Warning

Some hotels and rental car companies place a temporary "hold" on the card of $200 to $500 above the room or rental rate. The hold is not a charge but reduces the available credit until released, usually within 7 days of checkout. If a card is near its limit, the hold can cause the next purchase to be declined.

Pay the statement balance in full each month

~22s

On the due date, pay the full statement balance, not the minimum payment. Set up auto-pay for "Statement Balance" through the card's website so it happens without thinking. Carrying a balance at 22% to 29% interest costs more than any rewards program could ever return. The point of a travel card is the rewards — the rewards are negative if interest is paid.

Use points before they lose value

~26s

Card-company points programs change rules regularly, and the changes almost always make points worth less. Once a year, log in to the card's rewards portal and either book a flight or hotel with the points or transfer them to an airline or hotel program where they can be used. Do not let points sit for 5 years assuming they will keep their value. They almost certainly will not. AARP's travel benefits page lists current point values for major programs.

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A travel credit card, used carefully, can pay for a free flight or two free hotel nights every year. Used carelessly, the same card can cost $300 in foreign transaction fees, $95 in annual fees you forgot about, and 22% interest on a balance you meant to pay off. The difference is not the card itself. It is how the cardholder uses it.

Travel credit cards fall into three rough groups. General travel cards (Chase Sapphire Preferred, Capital One Venture) earn points that can be used on any airline or hotel. Airline cards (Delta SkyMiles, American AAdvantage, United MileagePlus) earn miles only on that airline but include perks like free checked bags. Hotel cards (Marriott Bonvoy, Hilton Honors, IHG One Rewards) earn points at one hotel chain and often include free anniversary nights. NerdWallet's 2025 review found that the average retiree gets the most value from a single general travel card with no foreign transaction fee plus an airline co-brand card for the airline they fly most often.

The traps that cost older travelers money are predictable. Foreign transaction fees of 3% on every purchase abroad add up fast — a $4,000 European trip becomes a $4,120 trip without the cardholder noticing. Annual fees that auto-renew on cards no longer in use drain $95 to $695 a year. Cash-advance fees of 5% plus 25% interest from the day of withdrawal punish anyone who uses the card at an ATM. And points that sit unused often expire or lose value when the card company changes the rewards program.

This guide walks through the seven habits that turn a travel card into a tool that saves money on every trip. The first habit — paying the balance in full each month — is the foundation. No rewards program in the world earns more than the 22% to 29% interest that a carried balance costs.

None of this requires a finance degree. It requires checking a few things before booking the trip and a few things after returning home. About 30 minutes a year of attention is enough.

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Official Resources

Consumer Financial Protection Bureau FTC — Identity Theft AnnualCreditReport.com

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