International Credit Cards: Features and Benefits

Q: What is the difference between an international credit card and a domestic credit card?

An international credit card is simply a credit card that is ideal for international travel. Also known as travel reward cards, they typically have no foreign transaction fees, are widely accepted around the world, and come with travel perks like bonus rewards on travel purchases and access to airport lounges. They may also offer chip-and-PIN capability, a security feature that is widely used in Europe.

Q: Should I use my international credit card to withdraw cash from international ATMs?

Not unless you desperately need cash. Whether you use a credit card to get cash at an ATM in the U.S. or abroad, you will likely get hit with a cash advance fee. On top of that, your withdrawal will likely start accruing interest right away. And, on top of that, the local ATM provider may charge you a withdrawal fee.

Q: Do I need a credit card with 0% foreign transaction fees?

It depends on how much you travel abroad. If you frequently visit foreign countries, you could save a fair amount of money by avoiding a foreign transaction fees (often 3% of the purchase price). If, on the other hand, you rarely leave the country and the card offering a 0% foreign transaction fee comes with a hefty annual fee, it may not make economic sense.

Q: How can I find out which countries accept a given card?

One simple way to do this is to visit the website of the payment system the card uses, such as Visa or Mastercard, and look up its international use network.

International Credit Cards: Features and Benefits

Jason SteeleUpdated October 18, 2022

Share this article:

Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

When traveling abroad, using a credit card is generally more convenient than carrying around a lot of local currency or traveler’s checks. But be forewarned: Not all credit cards are accepted by merchants in foreign countries. What’s more, many cards charge a foreign transaction fee for every purchase you make outside the U.S., which can result in an unpleasant surprise once you're back stateside and receive your credit card bill. An international credit card is one that is widely accepted around the world, doesn’t charge any fees for foreign transactions, and may also offer added security features and travel benefits. Here’s what you need to know about international credit cards, including what they offer, how they work, and how to choose the best card for your travel needs.

What Is an International Credit Card?

An international credit card is one that is easy to use both at home and abroad, as well as for making purchases on international websites. These cards typically do not charge foreign transaction fees and may offer bonus rewards on travel purchases, along with benefits like travel insurance, travel credits, airport lounge access, and chip-and-PIN capability (more on that in a bit).

How Do International Credit Cards Work?

Cards on the Visa or Mastercard network tend to be the most widely accepted internationally. If an establishment in a foreign country takes credit cards, chances are fairly good that your Visa or Mastercard will work. However, some cards within these networks are better suited to international use than others.To understand why, it helps to know how credit cards work overseas. When you make a purchase in a foreign country, the currency exchange is automatically calculated by the card issuer based on the current exchange rate. In return for offering this convenient way to pay, the credit card issuer will often charge a fee (typically 3% of the transaction value) which is reflected in your total purchase cost.The best international cards, however, will calculate the currency exchange for no added costs or fees.

Features of International Credit Cards

International credit cards are similar to other types of credit cards, with the exception of a few special features. One, as mentioned above, is that they won’t charge transaction fees. Another is that they often feature international chip-and-PIN technology. What exactly does that mean?Most cards in the U.S. are chip-and-signature cards. This means that you use your card and sign if necessary. However, in many other countries, you will be asked to use a PIN (personal identification number) instead of a signature. A PIN is a four-digit number associated with the card that identifies the cardholder’s authenticity and authorizes transactions. Many international cards have chip-and-PIN capabilities to comply with these practices in other countries.

Benefits of Having an International Credit Card

Here’s a look at some of the key benefits offered by international credit cards.

Avoiding Credit Card Foreign Transaction Fees

Foreign transaction fees are among the most common credit card fees. A surcharge of 3% may not seem like a big deal on a single purchase. If you buy a souvenir in another nation’s currency and the total bill comes to $100, for example, the total including the transaction fee will be $103. However, this surcharge will be added to all your purchases, including hotel reservations, transportation, restaurant meals, entertainment, and ATM withdrawals, which can potentially turn into hundreds of dollars.Your credit card agreement should include the terms and conditions of your foreign transaction fees.

Earn Reward Points for Spending Abroad

Overseas travel can be costly, making it a good opportunity to rack up credit card points. With an international card, you may be able to accumulate points at a faster clip, since many offer generous travel rewards, such as 10x points on hotels and car rentals and 3x points on restaurants.

Use Reward Points for Travel and International Stay

Most international credit cards allow you to redeem rewards points for overseas travel (including flights, hotels, rental cars, and vacation packages) when you book directly through the card’s travel portal. In some cases, they also offer a sign-on bonus, such as 50,000 miles or $500 towards travel. This can help make traveling the globe a little less costly.

Factors to Consider When Getting an International Credit Card

There are many international credit cards available, but some offer better card terms and benefits than others. Here are a few factors to consider while looking for a travel card.

Foreign Transaction Fees

These are fees applied when you use your card abroad or on a foreign website, and they’re typically around 3% per transaction. If you frequently, or even occasionally travel overseas, you may want to choose a card that waives these fees.

Chip-and-Pin Capabilities

It can be worth looking for an international card with chip-and-pin capabilities. With this type of card, you “dip” your card into the reader, then insert your PIN. Having this feature can prevent you from ending up at an unattended kiosk unable to use the card because it requires a PIN to complete your transaction. This technology also provides added security and cuts down on fraud, since scammers can’t use a card without the associated PIN.

Merchant Acceptance

Generally, cards that use the Visa or Mastercard network are widely accepted worldwide. American Express and Discover also have an international presence. However, they tend to be accepted by fewer merchants in foreign countries.Before choosing a card, it can be smart to ask the card issuer if there is any reason why the card would not be accepted by a merchant in the countries you plan to visit.

Annual Fee

International credit cards may come with an annual fee. Although there are no-annual-fee travel cards, some of the international credit cards that have the most to offer, like travel credits or travel protections, charge an annual fee in exchange for these benefits. You will need to weigh the benefits with the cost to decide whether the annual fee for a credit card is worth it.

Rewards and Benefits

Many international credit cards are focused on travel-related rewards and benefits. Bonus rewards categories could include dining, airfare, or hotels. Other common travel benefits include access to airport lounges, priority boarding, free checked bags, or free upgrades. Again, these cards may charge annual fees. If they do, you’ll need to weigh whether these benefits are worth the annual cost.

Travel Protections

Many international cards, especially premium travel cards, offer travel protections like travel insurance, auto rental collision damage waivers, trip delay reimbursement, lost luggage reimbursement, and emergency evacuation and transportation. These travel protections can save you money and provide peace of mind when traveling. You’ll find more of these protections with premium travel cards. However, mid-tier travel cards may also offer these benefits to some degree.

Applying for International Credit Cards

Applying for an international credit card is similar to applying for any other credit card. Before you submit any applications, however, it can be a good idea to check your credit score to see what type of card you may qualify for. International cards that offer generous travel perks often require a good or, more likely, an excellent score. As a result, a low score could get in the way of your goals of traveling with an international credit card in hand. If that's the case, you may want to consider using a credit-building card in the near term, so that you may be able to qualify for an international card at some point in the future.

Keeping Your Credit in Check When Using International Credit Cards

Just like any credit card, misuse of an international credit card can have a negative impact on your credit scores. To keep your credit in good standing – while enjoying all the perks of an international card – you’ll want to be sure to pay the card on time every time, since payment history has a major impact on your scores.Also consider spending only a small portion of the card’s credit limit. This helps keep your credit utilization ratio (how much of your credit limit you’re using) low. It's a good rule of thumb to keep your credit utilization at 30% or lower. When you get close to maxing out your card, creditors might take that as a sign you’re at risk of being unable to pay back what you’re borrowing.

The Takeaway

International credit cards can provide benefits if you travel overseas frequently. Not having to pay for foreign transaction fees can potentially save you a fair amount of money. You may also be able to take advantage of the other travel-related benefits, like bonus points on travel purchases, access to airport lounges, and travel insurance. However, some of these cards tack on a hefty annual fee in exchange for offering the extra international perks. And, you generally need good to excellent credit to qualify for some of the best travel reward cards.No matter what your credit, however, you may be able to qualify for a new credit card. With Lantern by SoFi’s online marketplace, you can shop different types of cards (including credit-building cards) and compare multiple credit card offers all in one place without making any type of commitment.

Frequently Asked Questions

What is the difference between an international credit card and a domestic credit card?

Should I use my international credit card to withdraw cash from international ATMs?

Do I need a credit card with 0% foreign transaction fees?

How can I find out which countries accept a given card?

Photo credit: iStock/Deepak Sethi

LCCC0922001

About the Author

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.

Share this article: