We write a lot on Head for Points about ways to minimise the 3% 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, although the Virgin Atlantic credit cards are fee-free in the Eurozone.
Another option is to get a free card from Currensea. Currensea is a simple but clever idea. You pay abroad with your Currensea Mastercard debit card. Currensea translates the cost to Sterling with just a 0.5% fee (83% less than most cards charge) and withdraws the money from your bank account. Currensea also works off the spot rate, giving you an extra saving from the wholesale rate used by your card company. You can find out more by clicking here. Currensea is free so there is no risk in giving it a try.
You can also look at debit cards from the like of Revolut. Curve Card is also an option although it has got increasingly confusing to use, with different FX rules applying based on your type of card, the day of the week and the currency you are spending in.
If you have a Limited Company, you DO have a credit card which has 0% FX fees and earns 1 Avios per £1 – the Capital On Tap Business Rewards Visa. Our review is here.
You may choose to act differently when travelling for work
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.
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 two options for reward cards which have extra bonuses for foreign spending but in return add on an FX fee of around 3%.
American Express Preferred Rewards Gold
American Express Preferred Rewards Gold offers double points when you spend abroad, which means 2 Membership Rewards points per £1.
This translates into two Avios or other airline miles, four Hilton Honors points, three Marriott Bonvoy points or six Radisson Rewards points amongst other things. The card is free for the first year.
Interesting, The Platinum Card from American Express – which has a £575 annual fee – does not offer this benefit.
FX spend may also help you trigger another Amex Gold benefit. You receive 2,500 bonus Membership Rewards points for every cumulative £5,000 you spend, up to a maximum of 12,500 bonus points per year. This means that a £5,000 spend in a foreign currency would earn 12,500 Membership Rewards points – 5,000 base points, 5,000 FX spend bonus points and a 2,500 points bonus for hitting another £5,000 mileston.
HSBC Premier and Premier World Elite Mastercards
The two HSBC Premier cards offers double points abroad.
On the free card, this means you are earning 1 Avios or other airline mile instead of the standard 0.5 miles per £1.
On the World Elite card, which has a £195 annual fee, you would be earning 2 Avios or other airline miles instead of the standard 1 mile per £1.
You must have a HSBC Premier current account to apply for either of these cards which has strict eligibility criteria. HSBC Premier is free, however, so if you do meet the income criteria then it isn’t a bad option for your day to day banking and is (just) a step ahead of your average current account.
As you can see there are a couple of good options here that can get you a return of around 2% on your non-Sterling spending. This assumes that you value an Avios or airline mile at 1p.
That is less than the 3% 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? – December 2023 update
If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.
SPECIAL OFFER: Until 9th January 2024, you will receive 30,000 Membership Rewards points (convertible to 30,000 Avios) with American Express Preferred Rewards Gold. You receive 25,000 points if you spend £3,000 in three months and a further 5,000 points if you hold the card for 15 months. You can apply here.
SPECIAL OFFER: Until 9th January 2024, you will receive a huge 100,000 Membership Rewards points (convertible to 100,000 Avios) with The Platinum Card. You receive 75,000 points if you spend £10,000 in six months and a further 25,000 points if you hold the card for 15 months. You can apply here.
British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 30,000 points (TO 9th JANUARY), FREE for a year & four airport ….. Read our full review
The Platinum Card from American Express
Crazy 100,000 points (TO 9th JANUARY) and a huge range of valuable benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 bonus points and 1.5 points for every £1 you spend 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 offers:
British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
American Express Business Platinum
40,000 points bonus and an annual £200 Amex Travel credit Read our full review
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
Capital On Tap Business Rewards Visa
Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review
For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.