In the complex world of credit cards, one of the biggest offerings from leading US bank Chase is known as Sapphire: that’s the name it gives to two types of credit card, Sapphire Preferred and Sapphire Reserve.
Both these credit cards are especially popular with travelers, because of the extra points they offer on travel-related purchases. So you might well be interested to learn if there are any fees you have to pay when using a Chase Sapphire credit card abroad: if there are any foreign transaction fees or other related costs.
This article will get you up to speed.
Neither Chase Sapphire credit card has any foreign transaction fees.¹ So when you use a Sapphire Preferred or Sapphire Reserve credit card abroad, there’s no special fee to pay simply because you’re out of the country.
Does that mean there are no fees at all, though? Don’t forget you’re dealing with a credit card here. Everything comes at a cost.
There may not be a foreign transaction fee, but whether your card is Sapphire Preferred² or Sapphire Reserve,³ there are other fees to remember. Here’s an overview:
- Annual fee. The Sapphire Preferred costs $95 per year, while the Sapphire Reserve is $450 per year, with a $75 fee for each authorized user.
- Balance transfers. Both Sapphire credit cards will cost $5 or 5% of the transfer amount - whichever is greater.
- Cash advances. Again, both credit cards charge the same for cash advances: the greater of $10 or 5%.
- Late or return payments. These can go up to $39 with a Preferred card, or $38 with Reserve.
- APR. If you don’t pay your balance promptly, you could have to pay interest at a rate of 18.24%-25.24% for Preferred, or 19.24%-26.24% for Reserve.
What are the benefits of each card, though? For travelers, there are quite a few. Both credit cards come with a high number of bonus points if you spend $4,000 in the first 3 months, and those points can translate into hundreds of dollars of savings in travel costs.
And there are more travel bonuses. Generally, with both cards you earn 1 point per dollar, but when you spend on travel or eating out, you earn double points with Sapphire Preferred, or triple points with Sapphire Reserve. Redeeming your points through Chase Ultimate Rewards gives you extra value, too.⁴
Foreign transaction fees aren’t the only cost that’s specific to traveling abroad. Another one, easy to forget about, is the exchange rate.
What are your US dollars really worth in a foreign currency? It’s a surprisingly difficult question, and not just because exchange rates are constantly changing: it’s also hard to answer because different institutions charge different rates.
That’s why if you send money abroad or get foreign cash from a currency exchanger, it pays to shop around to find a decent exchange rate. What you really want is an exchange rate as close as possible to the mid-market rate, which is what the banks use to trade between themselves. With TransferWise, you can even send money abroad at the mid-market rate itself, with only a simple and clearly stated fee to pay.
When you use a Chase Sapphire Preferred or Reserve credit card abroad, your money will likely be converted at an exchange rate set by Visa, the card issuer. The Visa rate tends to be a relatively good value way to spend money internationally.
But if you want the real mid-market rate itself, another option is coming. You can also get the TransferWise debit card, so you can withdraw cash from ATMs, and pay for goods and services wherever you are in the world. Using money in your TransferWise borderless multi-currency account, in which you can hold 40+ international currencies, you’ll be able to use the real local currency during your trip, having converted your US dollars at the mid-market rate.
There are no foreign transaction fees, the conversion fees are typically between 0.35% and 2.85%, and — like the borderless account itself — there’s no monthly or yearly fee at all. True, you don’t get points — but you do get great value for money.
A quick note about using credit cards abroad. Sometimes, when you try to get cash out at an ATM, the machine will ask you whether you want to make the transaction in the local currency or your home currency, US dollars. It might sound useful to do it in US dollars, so that you can have a better idea of exactly how much it costs. But don’t do it.
If you’re asked this, you should always choose the local currency. Otherwise, the machine will use a conversion method known as Dynamic Currency Conversion, which will leave you a lot worse off — just for the sake of seeing an amount in dollars rather than the local currency. Don’t give them the satisfaction: just familiarize yourself with the exchange rate, and use the local currency for your cash withdrawal.
Both Chase Sapphire credit cards provide lots of highly tempting offers for frequent travelers, mainly geared around rewarding big spending. The lack of foreign transaction fees means that if you are going to spend that much money on your trip, Chase may be offering you a relatively good value way to do so.
On the other hand, credit cards are seldom truly cheap, and these are no exceptions. Alternative options like debit cards might be worth exploring if you want to consider avoiding costly yearly membership fees and so on. And the TransferWise debit Mastercard will offer an especially efficient way for you to use your money abroad.
All sources last checked 20 March 2019
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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