If you are travelling overseas, having a credit card can be invaluable. You can use it to pay for everyday transactions as you travel, you can use it for emergencies, and you can use it as a back-up if you happen to run out of money. However, using your credit card overseas isn’t without its drawbacks.
You don’t even need to travel overseas to be hit with these fees. If you buy stuff online, and the retailer happens to be overseas (such as ASOS or Amazon), you may have to pay a fee to your credit card provider to cover the currency conversion.
This is called a foreign transaction fee or a currency conversion fee, and it can be charged when you pay for something overseas – whether online or in person. It is usually charged as a percentage of the transaction, typically around 2-3%.
If you withdraw money from an overseas ATM, you may also have to have to pay a withdrawal fee – to the ATM operator and to your credit card provider.
Note: If you want to earn points on your travel spending, check out our monthly update of the Best Frequent Flyer cards, and our list of all Frequent Flyer cards here.
A solution: ‘No foreign transaction fee’ credit cards
If you want to save money on currency conversion or foreign transaction fees, there are certain cards that allow you to do this. Often, premium credit cards can charge low or no foreign transaction fees.
Other credit card providers offer cards that are marketed specifically to frequent online overseas shoppers. Alternatively, you could consider applying for a prepaid travel card (see more about those below).
Our top ‘no foreign transaction fee’ credit cards
ANZ Rewards Travel Adventures Credit Card – No overseas transaction fee on purchases, Overseas Travel and Medical Insurance. 75,000 bonus Velocity Points if you spend $2,500 on eligible purchases within the first 3 months of approval.
Latitude 28 Degrees – No annual fee credit card with no currency conversion fees or international transaction fees – seen as a great travel choice
Coles Rewards Mastercard – No international transaction fees on purchases, $99 annual fee
Bankwest Breeze Platinum Card – a low interest rate and no foreign fees
Bankwest Zero Platinum card – $0 annual fee and no foreign transaction fees – great combination for annual travel and occasional use – may also suit shoppers paying their balance off each month
Westpac Lite Credit Card – Low 9.90% p.a. purchase card with no fees for foreign transactions or late payments. Credit limit of $500 to $4,000. Monthly $9 card fee.
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 Transaction Fees by Issuer
| Issuer | International Transaction Charge | Foreign ATM Withdrawal 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 | 2.5% | $4 |
| CBA | 3% | $4 or 1.75% (whichever is greater) |
| CUA | 3.4% | $5 |
| Diners Club | 3% | – |
| Heritage | 2.5% | $5 |
| HSBC | 3% | – |
| IMB | 3.3% | $5 |
| Jetstar | 3% | – |
| Latitude Financial | 3% | $4 |
| Macquarie | 3% | – |
| ME Bank | 2.5% | – |
| NAB | 3% | $4 |
| St George | 3% | $5 |
| Suncorp | 3.4% | $5 |
| Virgin | 3.3% | $5 |
| Westpac | 3% | $2.50 except Global Alliance ATMs |
| Woolworths | 3% | $2.50 |
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.
Consider travel insurance costs
If you think you need to purchase standalone travel insurance, you should weigh up the costs associated with taking it out, against the costs and benefits that come with the credit card you are considering – and you might be pleasantly surprised by what you discover.
We’ve made this job really easy with our free travel insurance comparison, showing you key features for major credit cards and credit card providers.
Credit cards can be an economical way of obtaining travel insurance, and it’s often activated automatically so 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 are properly covered.
- Always, always keep the credit card statement showing the purchase of your flights and/or accommodation to hand, 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 such as Smart Traveller and shop around for the best deal – making sure you are 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.
Use prepaid travel cards 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 often offer reasonable exchange rates, however, 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 are choosing a prepaid travel card, be aware of the small print and any fees that may be applicable. It’s worth bearing in mind that you may 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 would 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.
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 foreign transaction 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 is 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).
Roland Bleyer
Founder of Creditcard.com.au. Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications. Some popular offers on our site right now include the St.George Vertigo. Ever popular with a low annual fee, purchase rate and 0% balance transfer. For those wanting a long balance transfer period. Have a look at the 0% balance transfer Virgin Flyer offer with no balance transfer fee, points earning plus $129 Virgin Australia Gift Voucher each year.
