If you travel abroad, withdraw from an overseas ATM, or buy stuff online from foreign shores, you’ll pay an extra 2% to 4% to cover foreign currency conversion. It's a kick in the bank account, for sure.
Credit cards with 0% currency conversion fees waive the cost, which - cha ching! - saves you money every day. Like this:
| Amount spent | Conversion fee 2% | Conversion fee 3% | Conversion fee 4% |
|---|---|---|---|
| $500 | $10 | $15 | $20 |
| $1,000 | $20 | $30 | $40 |
| $2,000 | $40 | $60 | $80 |
| $3,000 | $60 | $90 | $120 |
| $5,000 | $100 | $150 | $200 |
As a one-off purchase, the smaller amounts might seem like a fair price to pay. But if you frequently shop online from overseas retailers (and let’s face it, that’s most products on Amazon and social media ads), those small amounts add up over a year.
And that’s not including any ATM charges for withdrawing cash while you’re travelling the world.
A simple breakdown of currency conversion fees (purchases and ATM withdrawals)
When making a purchase
There are 2 different fees applied when you purchase from another country:
The card scheme fee: A small fee of around 0.5 - 1% of the purchase amount is baked into the currency exchange process (this is called the spread). You can’t avoid this fee.
The card’s own foreign transaction fee: The credit card itself may charge a fee of 2-4% of the purchase amount on top.
A credit card with no foreign transaction fee means the card’s fee is waived - but you’ll still pay the small and unavoidable exchange rate fee.
What about Dynamic Currency Conversion (DCC)?
DCC happens when a merchant or ATM offers to convert the transaction into AUD at the point of sale at an inflated rate with markups that can total 18% or more. If a seller offers DCC, say no.
When withdrawing from an ATM
Most banks add on a surcharge for withdrawing from an ATM. It’s likely to be either a percentage of the withdrawal amount or a flat fee per transaction.
For example:
- NAB charges a flat $5 ATM withdrawal fee
- Amex charges $2.50 or 2% of the withdrawal amount, whichever is greater
- Bendigo Bank charges a $5 fee plus the cash advance rate of $3 or 3%, whichever is greater
⚠️ ATM withdrawals from a credit card are often charged as a cash advance. That means you’ll pay the maximum interest on the withdrawal amount immediately. It’s typically best to avoid using a credit card to withdraw cash.
How much can you save with a $0 foreign fee card?
Let’s say Marvin heads over to the Maldives for a surfing holiday. He spends $3000 on his accommodation using a credit with a 3% currency conversion fee. Marvin forks out an extra $90 that he could have saved with a $0 foreign fee card.
What about Suri and her family? They head off to France and spend $10,000 on their trip. The currency conversion fee is 4%, which means they’ve paid $400 more than they needed to. That’s about 920 baguettes.
How is the exchange rate calculated on credit cards?
Most credit cards will use the exchange rate of the card scheme, either Visa or Mastercard. Amex has its own exchange rate, which is typically close to the midmarket rate. This table gives you an idea of the different rates used by the card schemes:
| Card scheme | Exchange rate used |
|---|---|
| Visa | Visa uses its own daily exchange rate, which includes a hidden markup over the mid-market (interbank) rate. |
| Mastercard | Mastercard uses its own exchange rate. Non-USD currencies are typically converted to USD first, then to AUD (2-step conversion). |
| American Express | Amex applies its own exchange rate, based on wholesale rates but with a markup. Rate varies by currency and may change daily. |
Your options for saving on overseas purchases
We’ve found the only way to avoid foreign transaction fees is to use:
- Cash in the local currency (but be aware of ATM withdrawal fees)
- A credit card that waives foreign fees
- A travel card that waives foreign fees
Using cash overseas. You’ll definitely save on fees by using cash, but remember you’ll pay foreign transaction fees if you withdraw while overseas, as well as a possible ATM fee by the operator.
And of course, there are also the safety risks of carrying large amounts of cash while you travel. A bum bag can only protect you so much.
Using prepaid or money transfer cards. These can be a good option, but make sure you understand the fees, terms and conditions. Also remember you won’t get any card insurances, free travel insurances and other perks, or fraud protection.
Using a credit card. Some people worry about annual fees, but you can get credit cards with $0 foreign fees that have crazy-low or no annual fees. If you add up some of the other perks like travel insurance, lounge access and even rewards points, you might find it has far more value than its fees.
What’s the bad news?
$0 foreign fee cards aren’t all sunshine and roses, so here’s a quick rundown of the pros and cons. Gotta be honest, there aren’t many cons. Most of these cards are geared towards travellers, so they’re nifty to have while you’re abroad.
Pros and cons of a $0 foreign fee credit card
Pros
- Save money on foreign currency conversion fees
- Make a plan to pay off your debt before the interest-free period ends
- A new card may have perks you can use to save money and pay off your debt faster
Cons
- There may still be other fees to be aware of
- You may need to pay an annual fee
- You may be charged interest if you don’t pay it off each month
Can you earn rewards on a 0% foreign fees credit card?
Sure, but it’s less common. Some cards will offer points on everyday purchases and some will give you cashback as a reward. Saving on fees also maximised the value of any rewards you earn.
For example, the Latitude 28° Global Platinum Mastercard earns Latitude Reward Points that can be spent on groceries, dining, discounts, cinemas and unique experiences.
It’s also worth checking out rewards credit cards that may not waive the foreign fee. You might find it’s worth the extra cost on overseas transactions if you’re earning enough in points to save money on travel through discounts and freebies, especially if it’s a card that earns frequent flyer points.
Other perks you might like
If you’re planning to travel with a credit card, you could get some other handy perks on top of your transaction-fee savings:
- Complimentary international travel insurance: Travel insurance saves you time and money by covering you on eligible trips, which is key if you’re a frequent overseas traveller (make sure to read the PDS). Bankwest Breeze Platinum Mastercard offers this feature as well as $0 foreign transaction fees.
- Lounge access: A great extra for frequent flyers, complimentary access to airport lounges gives you somewhere far nicer to relax during stopovers. You'll often get free food and drinks, WiFi, and showers.
- Concierge service: A concierge is a personal assistant service that helps you arrange flights, hotels, bookings, reservations, and even pet care.
Tips for saving on overseas fees
"We often forget that everything we buy online has a conversion fee attached if it’s an overseas seller. Those costs add up over time, which drains your account and dulls the value of your reward points. A $0 foreign fee card can be an inexpensive solution."
How much are foreign fees on credit cards?
This table will help you see how much you might pay using a credit card overseas.
Foreign currency transaction fees are usually calculated as a percentage of what you’re buying. This table lists the current fees charged by major credit card providers for overseas transactions.
Credit Card International Fees by Brand
| Brand | Intl Txn Fee | O/S ATM Fee |
|---|---|---|
| American Express | 3% | TBC |
| ANZ | 3% | $4 |
| Bank of Melbourne | 3% | $2.50 |
| Bank of Queensland | 3.4% | $4 |
| Bank SA | 3% | $2.50 |
| Bank Australia | 2% | $3.50 |
| Bankwest | 2.95% | $4 |
| Bendigo | 2% | $15 |
| Citi | 3.3% | $5 |
| Coles | 3% | $4 |
| CBA | 3% | $4 or 1.75% (whichever is greater) |
| CUA | 3.4% | $5 |
| Diners Club | 3% | - |
| Westpac | 3% | $2.50 except Global Alliance ATMs |
Aisha
10 November 2025Pauline
13 November 2025