We write a lot on Head for Points about ways to minimise the 2.99% foreign exchange fee added to most credit and debit card transactions outside the UK.
For personal travel you might want to get a separate free credit card to use abroad. There are no travel rewards card without a foreign exchange fee. One option is to get a free Curve Card – see this HFP article – and link it to a miles-earning Visa or Mastercard.
Another option is to open an account with online bank Starling. It comes with a debit card which charges no fees on FX cash withdrawals up to £300 per day and no fees at all on overseas transactions. You can fund Starling by moving money to and from your existing bank account via their app. Our review of Starling Bank is here and you can apply here.
When you are travelling for work, however, your credit card bills will be reimbursed by your employer. There is no incentive for you to get a separate 0% foreign exchange fee card. Your goal should arguably be on maximising rewards for yourself.
I won’t focus on credit card spend bonuses here because those don’t change whether you are spending in the UK or abroad. I just want to look at cards which increase your earning rate for FX transactions.
Here are your options for cards which have bonuses for foreign spending, but in return add on a 2.99% FX fee:
American Express Preferred Rewards Gold – double points abroad, so 2 per £1. That translates into 2 Avios or other airline miles, 4 Hilton Honors points, 3 Marriott Bonvoy points or 6 Radisson Rewards points amongst other things. The card is free for the first year. Representative APR 56.6% variable including the annual fee (free in year 1) based on a notional £1,200 credit limit.
IHG Rewards Club Mastercard – double points abroad, so 2 IHG Rewards Club points per £1 which I value at 0.8p. The card is free. Representative APR 22.9% variable.
HSBC Premier Mastercard – double points abroad, so 1 Avios or other airline mile. The card is free but you must have a HSBC Premier current account which has strict eligibility criteria. Representative APR 18.9% variable. The World Elite version of this card, with a £195 fee, also earns double points abroad and is worth 2 Avios per £1.
As you can see there are some good options here that can get you a return of around 2% on your spending. That is less than the 2.99% foreign fee you are incurring, of course, which is why these are not attractive deals for personal use, just for business expenditure.
Want to earn more points from credit cards? – November 2020 update
If you are looking to apply for a new credit or charge card, here are my November 2020 recommendations based on the current sign-up bonus.
British Airways American Express
5,000 Avios for signing up, no annual and a companion voucher for spending £20,000 Read our full review
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
Earn both Avios and BA On Business points with your business spending Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.