Many credit cards charge cardholders a fee to use their card when making purchases in foreign countries, often called a foreign transaction fee or currency conversion fee. These fees vary and can be as high as three or four percent, which could tack on an extra $90 to $120 to a total bill of $3,000.
Pentagon Federal Credit Union (PenFed) has recently announced that it will be dropping all foreign transaction fees from the PenFed Premium Travel Award American Express. In addition to the waived fee, cardmembers earn five points per $1 spent on airlines, three points per $1 spent on dining and hotels and one point per $1 spent everywhere else. PenFed points (not to be confused with American Express Membership Rewards points) can be used for flights, travel awards, gift cards, merchandise and more. Cardmembers who spend $15,000 to the card annually receive complimentary Priority Pass membership plus two complimentary lounge passes to participating Priority Pass airport lounges worldwide. The card has a $50 annual fee that is waived for the first year and comes with a 20,000-point sign up bonus when you spend over $650 to the card in the first three months.
To apply for the card, you must be a member of the Pentagon Federal Credit Union, which provides financial services to members of the U.S. Military, American Red Cross employees and volunteers and other eligible businesses. If you aren’t affiliated with the armed forces or other participating organizations, you can join the National Military Family Association and pay a one-time $20 fee to become eligible for membership in the Pentagon Federal Credit Union.
Bottom line: The PenFed Premium Travel Award American Express is a useful card for international travelers who frequently pay for services overseas with a credit card. Cardmembers used to be charged a two percent foreign transaction fee. While American Express isn’t as widely accepted as MasterCard or Visa, this card may be worth checking out if your current credit card charges a foreign transaction fee. Plus the $50 annual fee is relatively low for a rewards card. Visit http://www.penfed.org/amex for more information about the card.