You don’t need to be travelling to be hit with currency conversion fees. While credit cards are invaluable when you’re overseas, they can also help when you buy stuff online from foreign retailers such as ASOS or Amazon. Credit card providers can charge a variety of fees on international transactions. As a one-off those fees may not seem too bad, but they will add up over time.
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.
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).
|humm90 Mastercard ||Designed for shoppers, humm90 Mastercard provides a massive 110-days interest free period on purchases with long-term interest-free plans of up to 60 months for a range of retail partners. Plus, pay no transaction fees on foreign purchases made overseas or online.|
|ANZ Rewards Travel Adventures Card ||Save on card costs with no international transaction fees on purchases overseas, including online from international websites. Plus, waived cash advance fee when used at overseas branches and ATMs. Currently offers 40,000 bonus Reward Points, minimum spend required.|
|NAB StraightUp ||Pay no interest or late payment fees – just a simple monthly fee, which is reversed if you don’t carry a balance for an entire statement period. The card comes with no foreign currency fees on international purchases, online or overseas.|
|ING Orange One Low Rate Credit Card ||Pay no ING International Transaction Fees for eligible customers when you shop overseas or online. Packed with money saving features which include no annual fee, low interest rates on purchases and cash advances, and friendly rates on instalment plans to pay off your purchases over time.|
|Coles Rewards Mastercard ||This card waived its international transaction fee on retail purchases except cash advance in foreign currency or cash advance made overseas. Currently offering cashbacks; 0% p.a. on both purchases and balance transfers in the first year; and 30,000 bonus Flybuys when reaching minimum spend requirement.|
|Westpac Lite Credit Card ||As light and as friendly as it is, this card offers everything low and easy to your pockets with its low purchase rate of 9.90% p.a., up to 45 days interest-free, plus $0 foreign transaction fees when you shop overseas or online.|
|Latitude 28 Degrees ||Pay no annual fee ever. Save more when shopping overseas or online with the $0 international transaction or currency conversion fees.|
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.
|Issuer||International Transaction Charge||Foreign ATM Withdrawal fee?|
|Bank of Melbourne||3%||$2.50|
|Bank of Queensland||3.4%||$4|
|CBA||3%||$4 or 1.75% (whichever is greater)|
|Westpac||3%||$2.50 except Global Alliance ATMs|
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.
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:
Read more about credit card travel insurance here.
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.
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:
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 ANZ Low Rate. This special offer has no annual fee first year, a low purchase rate and long 0% balance transfer. Have a look also at the huge 0% for 30 months balance transfer from Citi with no balance transfer fees.
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