Travelling overseas can be expensive enough without having to worry about extra fees and charges being added to your credit card. If you want to avoid paying more than you have to on your overseas spending – whether that’s in person overseas, or online within Australia – you may want to consider a 0% foreign fees credit card.
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.
You will find most credit cards charge a fee between 2-4% of each foreign currency transaction, which can get pretty expensive if you like shopping online with overseas merchants, or you enjoy exploring other countries with your credit card in hand.
Making shopping overseas somewhat more affordable, a 0% foreign fees credit card waives the fee associated with foreign currency conversion, which can make them very appealing indeed.
Types of 0% Foreign Fees Credit Cards
When applying for a 0% foreign fees credit card, you obviously need to consider the type of card you need, and everything it has to offer. You may choose a 0% foreign fees credit card that is a no annual fee credit card, a low rate credit card, a rewards credit card or a prestige card, like a gold or platinum option.
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.
0% Foreign Fees Credit Cards vs. Other Options
Wondering whether a 0% foreign fees credit card is right for you? Here are a few other options you may want to consider:
Debit Card: Your everyday debit card may be used overseas as long as it is a Mastercard or Visa. Be aware that fees and charges may apply, and your debit card may not offer the range of travel-related extras and support that a 0% foreign fees credit card might.
Pre-Paid Travel Money Card: With a pre-paid travel money card, you can load a number of foreign currencies onto the card, which can then be used overseas. 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.
Ready to compare the options? Check out the great range of 0% foreign fees credit cards on CreditCard.com.au today and start saving on your overseas transactions!
0% Foreign Fees Credit Cards - Frequently Asked Questions
When you use an Australian credit card to make a transaction in a foreign currency, the credit card provider has to convert the total amount of that transaction into Australian Dollars (AUD). However, the conversion process varies according to the credit card provider.
Mastercard and American Express convert the foreign currency amount into United States Dollars (USD), to then convert it into AUD. These conversions will both be transferred according to the daily exchange rate.
Visa, on the other hand, converts the foreign currency amount directly to AUD at the daily exchange rate, as long as the initial transaction was made in USD, Canadian Dollars, New Zealand Dollars, Singapore Dollars, Pounds Sterling, Euros or Japanese Yen.
For all transactions made in other foreign currencies, Visa converts the foreign currency amount to USD, to then convert it to AUD.
As you can imagine, if the Australian Dollar is not faring favourably against the United States Dollar, this process of converting foreign currency transactions through USD would end up costing the cardholder more than it should.
If you want to compare daily exchange rates on your current credit card, you can use the Mastercard or Visa foreign currency exchange calculator. American Express, unfortunately doesn’t provide one for its customers to use.
Choosing a 0% foreign fees credit card can certainly save you money on foreign currency conversion. However, there are other fees and charges you should be aware of:
- 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.
The amount you could potentially save on a 0% foreign fees credit card will depend on the amount you spend on the card, and the fees you would have paid on a standard credit card.
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.
And that’s before any other fees such as overseas ATM withdrawal fees or overseas cash advance fees are taken into account.
Still weighing up whether a 0% foreign fees credit card is right for you? Here are some of the pros and cons to take into consideration.
- 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.
- There may still be other fees to be aware of.
- 0% foreign fees credit cards may charge higher annual fees and interest.