Foreign Transaction Fees on Credit Cards

Senior News Journalist · 11 December 2017
If you are travelling overseas, or even buying something online in Australia that comes from overseas, you may have to pay a foreign transaction fee. Canstar reveals some credit cards on its database that don’t charge currency conversion fees.

When it comes to deciding how you will spend your money overseas, there are so many options out there from credit cards to travel money cards. Choosing a credit card is a popular and convenient option, but it’s important to consider how much your card could cost you.

Foreign transaction fees are one thing to look out for when selecting a credit card to take with you on your travels.

What are foreign transaction fees?

Foreign transaction fees can include a range of fees that could put you out of pocket if you aren’t aware of them. When comparing your options for a credit card with no foreign transaction fees, it’s a good idea to consider some of the following fees:

Currency conversion fee

You will likely be charged a relatively minor currency conversion fee when making a purchase to convert your Aussie dollars to the local currency. According to Canstar’s recent analysis of 5-Star Rated travel credit cards, the average currency conversion fee sits at 2.80%, with the maximum charged being 3.65%.

But guess what – there are travel credit cards out there with a 0% conversion fee.

If you’re looking for a credit card with no conversion fee, you might want to consider one of the 0% conversion fee credit cards on Canstar’s database. You can see a snapshot of the ones with links to providers’ websites in the table below, sorted by annual fee.

Table only displays a sample of products. Click here to see more. Be sure to read the full terms and conditions of each deal before signing up.

Overseas ATM withdrawal fees

If you are travelling to a heavily cash-based country you are going to want to be able to take out cash pretty often. But you might find your bank charges a fee to withdraw cash in a different country. You could be paying as much as $5.50 per ATM withdrawal, while the average of $3.52 isn’t exactly cheap either.

It’s worth considering your options and comparing credit cards to find something suitable for you.

Overseas ATM cash advance fee

You can be charged to withdraw money from an ATM machine while overseas even if you have a credit card that offers $0 ATM fees.

Getting cash out at an ATM in a foreign country with your credit card can generally cost 2-4% of the amount. Plus, higher interest rates may apply and you could also be charged a flat dollar fee if you use an ATM outside your bank’s network.

Other credit card fees to watch out for

There are a few more credit card fees that you might be charged and should know about. Most of them are avoidable – but only if you know about them in the first place!

Be aware of the potential to be charged:

  • An annual fee
  • An annual fee for a subsequent card
  • Credit card interest
  • Foreign currency conversion fee
  • ATM cash advance fee
  • Late payment fee
  • Over the limit fee
  • Dishonour fee
  • Over the counter payment fee
  • Replacement credit card fee

For a more detailed summary of credit card fees, check out Canstar’s roundup of 11 credit card fees you need to know about.

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