Business credit cards with no foreign transaction fee (UK): who charges 0%, and what 3% costs

The short list

• Limited company or LLP with any dollar or euro spend: Capital on Tap. 0% non-sterling transaction fee, £0 annual fee, and the 1% cashback applies to foreign-currency spend as well, so your US software earns cashback instead of costing a surcharge. It is the card I use.
• Limited company that wants a second 0% option with a published APR: iwoca (0% (Visa exchange rate), £0 a year, 35.40% APR representative (variable); rates from 14.99%).
• Established limited company: Funding Circle (0%, £0 a year), whose eligibility is limited companies only; at least one year trading; £30,000+ turnover.
• Sole trader who banks with NatWest or Santander: NatWest Business Plus (0% on purchases; £70 per card) or Santander Business Cashback (0% on purchases in the local currency; £30 a year).
• Mostly euro spend: Metro Bank (0% in SEPA Europe; 2.99% elsewhere) if you bank there; Virgin Money charges 2.95% (not charged on euro, Swedish krona or Romanian leu spend in the UK or EEA).
• Sole trader with no suitable bank card: Barclaycard Premium Plus at 0.99%, or a business debit card with no fee if you do not need credit.

0% business credit cards

These charge nothing on non-sterling purchases, though several with conditions: read the fee column in full. Capital on Tap is first because it is the card we use. Tide’s business credit card is Capital on Tap’s card brokered by Tide, so it is not listed separately.

Three of the 6 are specialist lenders for limited companies: Capital on Tap, iwoca and Funding Circle. Capital on Tap is not a bank, so the business bank account it asks for is one you already hold, and Funding Circle says outright: no need to switch your business banking. All three pair 0% FX with 1% cashback and no annual fee, which makes them the best value for a company with overseas suppliers. The difference between Capital on Tap and Funding Circle on everything else is covered in Capital on Tap vs Funding Circle. The other 3, NatWest Business Plus Credit Card, Santander Business Cashback Credit Card and Metro Bank Business Credit Card, accept sole traders but need their bank’s business current account, and each has a catch in the small print: NatWest Business Plus costs £70 per card; Santander’s is 0% on purchases in the local currency, with a fee of £30; and Metro is 0% in SEPA Europe; 2.99% elsewhere, which rules it out for most US software.

Low-fee and typical cards

Barclaycard Premium Plus is the only card in our data with a reduced fee: 0.99%, on a card that costs £150 per account. It suits a business that travels, wants the bundled travel insurance and can use a sole-trader-friendly card, rather than one that simply wants to avoid FX fees.

Everything else charges between 2.75% and 2.99%. That includes the free Barclaycard Select Cashback (2.99%), every American Express card and most high-street bank cards. Where an issuer’s own pages disagree we say so: for Bank of Scotland we show 2.95%, but the fees table says 2.95%; a comparison note on the same page refers to 2.75%. Virgin Money waives its fee in one case: 2.95% (not charged on euro, Swedish krona or Romanian leu spend in the UK or EEA).

Debit and expense card alternatives

If you do not need credit, a business current account card can avoid the fee too. Starling charges 0%, Mastercard rate. Monzo charges 0% on card spend. Revolut Business uses the interbank rate within a monthly allowance (Basic £1,000, Grow £15,000, Scale £60,000), then 0.6%; +1% outside market hours. Wise is often described as fee-free, but it is not: it uses the mid-market rate plus a conversion fee from 0.24%; free to spend a currency you already hold. The catch is that you are mostly spending money already in the account, so there is usually no credit to smooth cash flow and, in every case here, no rewards. The trade-offs are in business credit card vs debit card, and the closest comparison with the card we use is Capital on Tap vs Revolut Business.

The fee is not only for travel

People think of foreign transaction fees as a holiday problem. For a small UK business they are mostly a desk problem. The fee is charged on any card transaction in a currency other than sterling, wherever you are when you make it. Many US software companies bill UK customers in dollars. Ad platforms bill in whatever currency the account was set up in. Hosting, domain registrars, stock libraries, freelance marketplaces and conference tickets are frequently priced in dollars or euros. Each of those payments carries the fee on a typical card, month after month, without anyone noticing, because it appears as a separate small line or is folded into the converted amount.

Two practical habits help. First, look at your last few statements for non-sterling transactions; most businesses are surprised by how many there are. Second, put overseas subscriptions on a 0% card, ideally on their own virtual card so each can be cancelled or capped independently. Capital on Tap offers instant virtual cards; how we set it up is in virtual cards for subscriptions.

What a foreign transaction fee costs a year

The arithmetic is simple and still surprising. At 2.99%, the fee on £500 a month of non-sterling spend is £179.40 a year; on £2,000 a month, £717.60; on £5,000 a month, £1,794.00. Here is every card in our FX fee data at the same three levels.

Put the fee next to cashback and the picture is starker. A card paying 1% cashback and charging 2.99% on non-sterling spend loses about two pounds for every pound it gives back on that spend. A 0% card that pays 1% cashback, as Capital on Tap does, turns the same spend from a cost into a small gain. The FX fee calculator takes your own figures, and the cashback cards comparison shows the other half of the sum.

Always pay in the local currency

When a card terminal abroad, a cash machine or an overseas website offers to charge you in pounds, it is offering dynamic currency conversion. The conversion is done by the merchant’s payment provider at a rate it chooses, which usually includes a margin well above the card scheme’s rate. It is presented as a convenience, and the screen may even promise “no commission”, but the cost is in the rate.

On a 0% card, choosing pounds is the worst option: the transaction reaches your card already converted, at the merchant’s rate, and the card’s 0% has nothing left to save you. The rule is always to choose the local currency, whether that is euros at a hotel desk or dollars at an American checkout, and let your card do the conversion.

A 0% fee still means an exchange rate

No card converts currency for free in the sense of giving you the rate you see on the news. A 0% card means the issuer adds no fee on top of the card scheme’s exchange rate. Capital on Tap cards run on Visa, and iwoca’s fee is 0% (Visa exchange rate). Santander says purchases are converted at the Mastercard exchange rate; Starling’s fee is 0%, Mastercard rate. Visa and Mastercard rates are close to the wholesale rate but not identical to it, and they move daily. Wise is the exception that works the other way: the mid-market rate plus a conversion fee from 0.24%; free to spend a currency you already hold. What the 0% cards remove is the extra percentage on top, which is the part worth avoiding.

Cash withdrawals abroad are a separate charge

A 0% non-sterling fee usually covers purchases. Cash is treated differently on nearly every card. Capital on Tap charges £0 ATM fee, but interest on cash withdrawals from the day you take them, with no interest-free period, and you can make two withdrawals and £400 in any 24 hours. Neither iwoca nor Funding Circle allows cash at all (cash withdrawals not available; cash withdrawals not permitted). Santander charges 3% (min £3); cash interest rate 27.9%. Barclaycard Premium Plus charges 3% (min £3), plus 0.99% if non-sterling. If you need local cash on a trip, a debit card is usually cheaper than any credit card. Every Capital on Tap charge is listed on the Capital on Tap fees page.

Who should choose which

If you run a limited company or LLP and any of your card spend is in dollars or euros, a 0% card is the single easiest saving available, and Capital on Tap is the one I use: no FX fee, no annual fee and cashback on the same spend. If you are a sole trader it is not available to sole traders; the sole trader guide and the Barclaycard Select Cashback review are the places to start. Every card we track, on every measure, is on the business credit cards comparison.