0% Foreign Fees Credit Cards

A great option for keen travellers and avid online shoppers, this type of card lets you pay no foreign currency fees on transactions made overseas, or online with international retailers.

What is a 0% Foreign Fees Credit Card?

Unlike the majority of other credit cards, a 0% foreign fees credit card does not charge a foreign currency conversion fee for transactions made in a foreign currency.

Most credit cards charge a fee between 2-4% of the transaction amount to cover the 'cost' of converting your local currency into a foreign currency. If you spend a lot online from overseas retailers or you travel the globe, those fees can add up to hundreds of dollars a year.

The pros and cons of 0% foreign fee credit cards

Pros

• Save money on foreign currency conversion fees
• Plenty of cards to choose from
• Other travel-related benefits on offer
• Can be more secure than other options, such as cash

Cons

• There may still be other fees to be aware of
• 0% foreign fees credit cards may charge higher annual fees and interest

Frequently Asked Questions about cards with no foreign fees

How does the foreign currency exchange work on a credit card?

When you use an Australian credit card to make a transaction in a foreign currency, the credit card provider has to convert the transaction amount from Australian Dollars (AUD) into the local currency of the merchant.

That conversion process is normally charged a fee. That fee is waived on 0% foreign fee cards, which makes overseas shopping cheaper.

How much could you save with a 0% Foreign Fees Credit Card?

Your savings depend on how much you use the card for overseas spending, and how much you would have paid in fees.

For example, if you spent $3,000 on a credit card that charged a foreign currency conversion fee of 3%, you would pay an extra $90 compared to using a 0% foreign fees credit card.

If you spent $10,000 on a credit card that charged a foreign currency conversion fee of 4%, you would pay an extra $400 compared to using a 0% foreign fees credit card.

Just bear in mind that there are often fees attached to ATM withdrawals and overseas cash advances. Some cards will waive ATM fees, but there's a chance you'll still be charged by the ATM provider.

What other foreign fees should I look out for? 

Credit cards come with fees and charges you should be aware of, especially if you're taking your card overseas:

• Overseas ATM withdrawal fee: If you withdraw cash at an ATM overseas, you may be charged an overseas ATM withdrawal fee of either $3 or so, or 2-4% of the total transaction. If you plan on using your card to withdraw money overseas frequently, choosing a card that doesn't charge for international ATM withdrawals could be a good idea.
• Overseas cash advance fee: When withdrawing money from an ATM on a credit card overseas – even one that doesn’t charge overseas ATM fees – you may still be expected to pay an overseas cash advance fee. This transaction will attract interest at the cash advance rate, which is typically higher than the purchase rate.
• Annual fee: Just like any other credit card, a 0% foreign fees credit card may charge an annual fee. Weigh up the cost of the annual fee against the features you get in return to work out whether the card offers good value.
• Purchase rates: Again, just like any other credit card, a 0% foreign fees credit card charges interest on purchases made when the balance is not cleared month-to-month. If you want to save on interest while travelling, consider applying for a card with a 0% purchase offer.

Taking all that into account, be sure to look at any other travel-related extras your 0% foreign fees credit card has to offer. Complimentary travel insurance, frequent flyer rewards and airport lounge access can make fees and charges you have to pay on the card more worthwhile.

Can you earn rewards on a 0% foreign fees credit card?

Yes, some cards that waive foreign fees earn rewards points. Here are some programs to look for when you're comparing:

• Everyday rewards: With these rewards programs, you can earn points on everyday spending, which can then be redeemed within the program. Rewards could include gift cards or merchandise, travel or money back when shopping at partner retailers.
• Frequent flyer rewards: These rewards programs are focused on travel. You can earn points on both travel and everyday spending, to then redeem those points on flights, accommodation, merchandise and more.
• Cashback rewards: Offering a somewhat simpler system, these rewards programs offer cashback as a percentage of your card spending. You are then free to spend that cashback as you like.

One of the most appealing aspects of choosing a rewards card with 0% foreign fees is that you don’t lose out on points earned on overseas spending. Why? Let’s look at an example.

Your card charges 4% on foreign transactions. You earn 1 point per $1 spent overseas and at home. You spend $10,000 overseas and $10,000 at home. To cover the spending you earn overseas, you pay $400 in foreign transaction fees. So, although you earn 10,000 points within each category of spending, your overseas points offer less in value because of the cost of foreign fees.

Why should I choose a card with no foreign fees?

Credit cards that waive foreign fees are best suited for people who travel frequently or buy from overseas stores online. The savings on fees can make a difference to how much your trip or products cost.

Say your foreign transaction fee is 3%. If you spent $5,000 when travelling overseas, you would pay $150 in fees. Similarly, if you shopped online at international retailers, a total spend per year of $4,000 would mean paying $120 in fees.

But, it's only one factor of a card, and there may be other things to consider. Remember to look at the card's annual fee and any other charges associated with using it. If the fees are too high, you might not end up saving much overall.

What else should I look for in a 0% foreign fees credit card?

Paying no foreign fees can certainly help you save money. But, chances are, you’re looking for more from your credit card than just that one feature. No matter how you plan to use your card, take time to look for 0% foreign fees cards that offer other features that provide value to you.

Concierge service: A concierge is a personal assistant services that helps you arrange flights, hotels, bookings, reservations and even pet care.

Travel insurance: Travel insurance saves you time and money by covering you on your trips if you meet the criteria laid out in the insurance PDS. Always read the PDS to make sure you understand how to activate your cover, and what limits and exclusions apply.

Lounge access: A great extra for frequent flyers, complimentary access to airport lounges gives you someone far nicer to relax during stopovers. You'll often get free food and drinks, WiFi and showers.

How do I compare 0% foreign fees cards?

When applying for a 0% foreign fees credit card, you need to consider the type of card you need, and everything on offer. You'll find 0% foreign fees credit card that have no annual fee, a low interest rate, or earn rewards points.

0% foreign fees credit cards come in all shapes and sizes, charging varying rates of interest and fees. Some will be packed with features, rewards and introductory offers, while others will be basic. Just as you would do when comparing any other credit card, make sure you choose a 0% foreign fees credit card that gives you everything you need at the lowest possible price.

What are the other payment options when travelling overseas?

There are other options for spending overseas. Just note these may not come with credit card features like purchase protection or travel extras like insurance.

Debit card: Your everyday debit card may be used overseas as long as it is a Mastercard or Visa. You'll need to read the PDS to see what fees and charges might apply.

Pre-paid travel money card: Pre-paid travel money cards let you load several foreign currencies onto the card to spend overseas in the local currency, which saves on transaction fees. Be aware that some fees and charges may apply, so read the small print before you go.

Foreign cash: If you choose to take foreign currency overseas, and that money is lost or stolen, you may only be able to claim it back if you have travel insurance. You may also find that certain fees are applied when exchanging currency, and exchanging money can be more expensive in certain places such as at the airport.