Sapphire Preferred Foreign Transaction Fee: Everything You Need to Know

by | May 9, 2024 | Transactions fee | 0 comments

Understanding the Sapphire Preferred Foreign Transaction Fee Policy

When traveling abroad, one of the most important factors to consider is the foreign transaction fee charged by your credit card. Many cards impose a fee of around 3% on every purchase made in a foreign currency, which can quickly add up and eat into your travel budget. However, with the Chase Sapphire Preferred credit card, you can enjoy the peace of mind of knowing that you won’t be hit with any additional fees for your international transactions.

The Sapphire Preferred is a popular choice among travelers due to its generous rewards program and travel perks. But one of its most valuable features is the absence of foreign transaction fees. Whether you’re dining at a local restaurant, shopping for souvenirs, or booking a hotel room, you can use your Sapphire Preferred card without worrying about incurring extra charges.

No Foreign Transaction Fees with Sapphire Preferred

The Sapphire Preferred foreign transaction fee policy is straightforward: there are none. Chase absorbs the cost of converting your purchases from foreign currencies to U.S. dollars, saving you money on every transaction. This can add up to significant savings over the course of a trip, especially if you’re traveling for an extended period or making frequent purchases.

It’s worth noting that while the Sapphire Preferred doesn’t charge foreign transaction fees, some merchants may still impose their own fees for accepting credit card payments. These fees are separate from those charged by your card issuer and are generally unavoidable. However, by using a card with no foreign transaction fees like the Sapphire Preferred, you can minimize the extra costs associated with international travel.

How the Sapphire Preferred Compares to Other Travel Cards

While the Chase Sapphire Preferred credit card is an excellent choice for international travel, it’s not the only card that waives foreign transaction fees. Many other travel rewards cards, such as the Capital One Venture Rewards Credit Card and the American Express Platinum Card, also offer this benefit. However, the Sapphire Preferred stands out for its combination of rewards, perks, and affordability.

Compared to other travel cards, the Sapphire Preferred offers a competitive rewards rate on travel and dining purchases, as well as a generous sign-up bonus. It also provides valuable travel protections, such as trip cancellation/interruption insurance and primary rental car coverage. And with an annual fee of just $95, it’s a more affordable option than many premium travel cards.

Exchange Rates and Currency Conversion with Sapphire Preferred

When you use your Sapphire Preferred card abroad, your purchases are converted from the local currency to U.S. dollars using the Visa exchange rate. This rate is determined by Visa and is generally very close to the mid-market exchange rate, which is the rate you’ll find on currency exchange websites and in financial publications.

It’s important to note that the exchange rate used by Visa can fluctuate throughout the day based on market conditions. This means that the rate you receive for a particular transaction may be slightly different from the rate listed online or in the news. However, Visa is committed to providing transparent and competitive exchange rates to its cardholders.

Understanding the Visa Exchange Rate Used by Sapphire Preferred

The Visa exchange rate is the rate at which Visa converts foreign currencies to U.S. dollars for its member banks, including Chase. This rate is based on the mid-market exchange rate, which is the average of the buy and sell rates for a particular currency on the global currency markets.

Visa updates its exchange rates on a daily basis, taking into account factors such as supply and demand, economic indicators, and geopolitical events. While the Visa exchange rate may not be identical to the mid-market rate, it is generally very close and is considered one of the most favorable exchange rates available to consumers.

Avoiding Dynamic Currency Conversion Fees

When making purchases abroad, you may sometimes be offered the option to pay in your home currency rather than the local currency. This is known as dynamic currency conversion, and it can be tempting to choose this option to see the exact cost of your purchase in familiar terms. However, dynamic currency conversion often comes with additional fees and less favorable exchange rates.

To avoid these fees and ensure that you receive the best exchange rate possible, always choose to pay in the local currency when using your Sapphire Preferred card abroad. This way, your transaction will be processed using the Visa exchange rate, and you won’t be subject to any extra charges beyond the purchase price. Some merchants may try to pressure you into using dynamic currency conversion, but remember that you have the right to decline this option and pay in the local currency.

Maximizing Rewards with the Sapphire Preferred Abroad

One of the biggest advantages of using the Chase Sapphire Preferred credit card for international travel is the ability to earn valuable rewards on your purchases. The Sapphire Preferred offers 2 points per dollar spent on travel and dining, which can add up quickly when you’re exploring new destinations and trying local cuisines.

In addition to earning points on your purchases, the Sapphire Preferred also offers a range of redemption options through the Chase Ultimate Rewards program. You can use your points to book travel directly through the Chase portal, where they’re worth 1.25 cents each, or transfer them to one of Chase’s many airline and hotel partners for potentially even greater value.

Earning Ultimate Rewards Points on Foreign Transactions

When you use your Sapphire Preferred card abroad, you’ll earn Ultimate Rewards points on every purchase, regardless of the currency. This means that you can continue to rack up rewards while exploring new countries and cultures, without having to worry about foreign transaction fees eating into your earnings.

It’s worth noting that some merchants may code their transactions differently than you might expect. For example, a restaurant located within a hotel may be coded as a hotel purchase rather than a dining purchase, which could affect your earning rate. However, in most cases, you can expect to earn 2 points per dollar on dining and travel purchases made abroad, just as you would at home.

Redeeming Ultimate Rewards for International Travel

One of the best ways to use your Ultimate Rewards points is for international travel. You can use your points to book flights, hotels, rental cars, and more through the Chase travel portal, where they’re worth 1.25 cents each. This can provide significant savings on your travel expenses, especially when combined with the lack of foreign transaction fees on your Sapphire Preferred card.

Another option is to transfer your points to one of Chase’s airline or hotel partners, such as United Airlines, Southwest Airlines, Hyatt, or Marriott. By transferring your points, you can often get even more value for your rewards, particularly if you’re able to book high-value awards like first-class flights or luxury hotel stays. And because Chase’s transfer partners include several international brands, you can use your points to travel all around the world.

Airline Partners Hotel Partners
United Airlines World of Hyatt
Southwest Airlines Marriott Bonvoy
JetBlue Airways IHG Rewards Club
British Airways
Air France/KLM
Singapore Airlines
Virgin Atlantic

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