A solution: ‘No foreign transaction fee’ credit cards

Bankwest Breeze Platinum Card Get all the great perks of a platinum card and save money, especially when shopping online or overseas – there are no fees for foreign transactions! You’ll also enjoy 0% interest on purchases and balance transfers for the first year, with a 2% balance transfer fee that goes back to 12.99% after that. Go to offer

Some credit cards waive the foreign transaction fee as one of their features. It’s often the case with high-tiered cards that come with a bunch of perks, rewards and higher annual fees.

But, if you spend overseas frequently, it might be worth comparing and deciding whether your spending makes the ongoing costs of the cards worth it.

There are also cards that offer reasonable annual fees, no currency conversion fees and other bonuses like 0% interest offers, and even repayment instalment plans that rival Buy Now Pay Later schemes.

So, it’s all about comparing to see which card works best for you and how much you spend.

Here’s an example of how much you could save on currency conversion fees in one month:

As a one-off purchase, the smaller amounts might not seem that bad. But if you frequently shop online, those small amounts add up over the course of a year. An overseas family holiday can easily cost $200 extra just in conversion fees.

And that’s not including any ATM charges for withdrawing cash while you’re overseas.

BankWest also waive international fees on their Bankwest More Platinum credit card. We’ve picked the two above however, as they have more overall benefits, as well as the waived foreign transaction fees.

Credit Card International Fees by Brand

Alternative: Wise Travel Money Card

The Wise Travel Money Card is a prepaid travel card that allows you to load and spend money in multiple currencies when traveling abroad. It can hold up to 40 currencies and has no foreign transaction fees, offering competitive exchange rates compared to banks and other travel cards. The card can be managed through an app, allowing you to check your balance, view transactions, and transfer money between currencies. It is free to order and load money onto the card and can be used at ATMs and merchants worldwide that accept Mastercard.

Different types of cards for travellers

Credit cards marketed to frequent travellers will often have low or non-existent foreign currency charges. In particular, a number of Gold and Platinum cards offer this feature (for example the BankWest Platinum range).

These cards will still have administrative costs, however, and they will tend to have either higher annual fees (though the BankWest Zero Platinum card has none) or higher interest rates, so work out whether this is actually going to save money on a card-by-card basis.

A Platinum card can be an option if you would use features such as frequent flyer points, travel insurance, extended warranty or purchase protection (if buying within Australia), so just because the card charges an annual fee doesn’t mean it is automatically more expensive if you would use those extras.

You can also check if the card has competitive exchange rates as part of their frequent traveller features.

Need travel insurance? Maybe your card covers it. 

Plenty of cards offer complimentary travel insurance as one of their handy little perks. 

To compare cards and the insurances they include, you can see our free travel insurance comparison, which highlights all the key features for major credit cards and credit card providers.

Credit cards can be a super economical way of insuring yourself while you travel, and it’s often activated automatically as long as you buy your tickets or certain travel expenses on the credit card. 

There are a few tips to remember though:

• Purchase the tickets with the card, or the insurance may not be activated.
• Don’t expect to be covered automatically for pre-existing conditions. If you have asthma, diabetes or some other condition check whether you need separate or additional cover and pay any applicable surcharge to ensure you’re properly covered.
• Always, always keep the credit card statement showing the purchase of your flights and/or accommodation to hand, as some credit cards require a copy of this before paying out on a claim.
• If you insist on separate travel insurance, take the advice of trusted websites like Finder.com.au and shop around for the best deal, making sure you’re covered for everything you want to be. Also make sure you understand any exclusions, such as adventure sports or Acts of God in any policy before you sign.

Read more about credit card travel insurance here.

If you choose prepaid, use it wisely

Foreign currency prepaid credit cards are pre-loaded with foreign currencies up to a certain value. These cards can allow you to lock in an exchange rate, and can offer reasonable exchange rates (see below for a word of caution about that).

Qantas Cash and Virgin’s Global Wallet are both examples of prepaid travel cards. With each option, you can pre-load foreign currencies on to the card, allowing you to lock in an exchange rate on each pre-loaded amount. You can then use the card to make overseas and domestic purchases. This can save you a huge amount in foreign conversion fees often charged by standard credit cards.

Qantas Cash and Global Wallet also allow you to earn rewards points on their respective loyalty programs, and can allow for faster check-in and boarding. To find out more about Qantas Cash and Global Wallet, what each one offers, and how they stack up against each other, read our post here.

If you’re choosing a prepaid travel card, be aware of the small print and any fees that might apply. Remember, you might have to pay ATM fees to withdraw money at ATMs both in Australia and overseas.

Fees to be aware of:

• Application fee: There is no fee to apply for a Qantas Cash card or Global Wallet.
• Top up/Reload fee: No top up fee on Qantas Cash or Global Wallet.
• Monthly service fee: No monthly service fee on Qantas Cash or Global Wallet.
• Inactivity fee: While Qantas Cash does not charge an inactivity fee, Global Wallet charges a $1 inactivity fee if the card remains inactive for 12 months or more.
• Currency conversion fee: If you use Qantas Cash or Global Wallet to pay for something in a currency that is not loaded on your wallet, you will pay a 3% currency conversion fee.

Use prepaid as a backup, and watch the exchange rate

If you do go with a prepaid option, make sure you understand its fees and its terms and conditions, and we’d still recommend having at least one back-up card for the time you’re away. This can ensure you’ll always have access to cash should anything happen.

A recent analysis also found a massive $193 difference in cost between providers based on different exchange rates they used. That means whether you get the card at Australia Post, ANZ, NAB or elsewhere, the currency exchange rate will be different and will vary depending on where you’re going and which currencies you’re loading.

Deciding on the right overseas-friendly credit card

So, does it sound like you should be exploring your options when it comes to overseas cash access? You’d definitely be right, and you’ve found the perfect place to start here, by comparing the transaction fees that major card providers offer. 

Once you’ve had a look at the fees your bank charges, you can decide whether you should apply to another bank for a card with no international fees.

Far from just believing that your current bank will look after you while you’re overseas, if you explore your options you might discover that another provider offers a better solution for you while you’re overseas.

For standard credit cards, the foreign currency transaction fees are usually calculated as a percentage of the purchase amount (because that’s the amount exchanged in foreign currency on each transaction). The table above lists the current fees charged by major credit card providers for overseas transactions.

We’ve found that the only way to avoid annoying foreign transaction fee is:

• To use cash in the local currency (but be aware of ATM withdrawal fees),
• To use one of the selected cards above that doesn’t charge a transaction fee,
• To use local debit or credit card (but this may only be an option if you have been living overseas for quite some time already).