Fees On Travel Credit & Debit Cards In 2017

Going overseas? Canstar has compared the fees on our 5-Star Rated Travel Credit & Debit Cards with other competitor products in the market.

With the Australian dollar hovering around a high of about 80 US cents, now might be a good time to take that overseas trip you’ve been planning. But spending money overseas isn’t always as simple as it is here. It’s wise to be prepared, and travel credit & debit cards can be a good option to consider.

Travel credit and debit cards are two popular ways to spend money overseas. Travel credit cards function much the same as regular credit cards with the inclusion of certain fees, while travel debit cards offer a greater control over your spending and cheaper ATM access.

It’s good to be aware the fees on these cards can add up, particularly for travellers who don’t familiarise themselves with the various fees and charges associated with using their card before leaving home.

With this in mind, Canstar has analysed a range of the travel credit & debit cards on the market today in order to determine the fees you can expect to pay for everyday transactions.

Compare Travel Credit & Debit Cards with Canstar

What fees apply when using travel credit & debit cards?

Travel credit & debit cards can charge a range of fees, such as:

  • Ongoing Fees e.g. Annual fees or monthly account keeping fees
  • Currency conversion fees
  • ATM fees
  • Point of Sale fees
  • Cash advance fees

For more information on what these fees mean and when they’ll be charged, you can read this article on the topic.

Cards that have minimal or no fees are likely to provide better value to someone travelling, especially if you’re likely to be making frequent withdrawals and purchases. To do the groundwork for you Canstar has compared the fees on all travel credit & debit cards we rate with the 5-Star rated cards in this year’s research.

We’ll start with travel credit cards.

Fees on Travel Credit Cards

The sole fee on travel credit cards we’ll review here is the currency conversion fee, one that can tend to catch people out. A currency conversion fee is charged to your card to pay for something in the local currency rather than your card’s default currency and is often charged on every $1,000 spent.

The table below shows the minimum, maximum and average currency conversion fees on the market at the time of writing.

Number of products Minimum Maximum Average
192 0.00% 3.65% 2.80%
Source: www.canstar.com.au (04/08/2017)

Traditionally, the currency conversion fees on travel credit cards were usually around 2-3% on average, and this year’s data shows this has stayed the same in 2017. The average currency conversion fee still sits at 2.80%.

2017’s research also found the maximum conversion fee charged was 3.65%, which as you can see is the highest conversion fee on the market this year. Canstar’s research shows you tend to get what you pay for –  the lower the Star Rating on the card, the more likely it will carry a higher currency conversion fee.

For a better chance of finding a card with a low (or non-existent) conversion fee, you might want to consider one of our 5-Star rated travel credit cards for occasional travelers. You can see a snapshot of them in the table below, sorted by currency conversion on purchases.

Fees on 5-Star Rated Travel Credit Cards

Overall, this year’s rating saw a total of 28 travel credit cards achieve a 5-Star rating. Some of these cards fit into both the Occasional Traveller and Regular Traveller category, with the following breakdown:

The table below shows the minimum, maximum and average currency conversion on just the 5-Star cards:

Number of products Minimum Maximum Average
5-Star 28 0.00% 3.00% 1.52%
Source: www.canstar.com.au (04/08/2017)

If this table is anything to go by, this is one of the key reasons why these cards were awarded a 5-Star rating for Outstanding Value. Accounting for around 14% of the cards we rated, they averaged a currency conversion fee of 1.52% – a near 1.30% difference when you compare with other cards on the market.

Currency conversion fees are the main culprits in hiking up travel costs, so you’ll likely have better luck finding one without excessive fees by considering our 5-Star rated cards.

You can view which cards achieved a 5-Star rating in our 2017 Travel Credit Card Research.

Compare Travel Credit Cards

Fees on Travel Debit Cards

If you’re taking a travel debit card overseas, you can usually expect to withdraw at least a couple of thousands of dollars from your bank account over the course of your trip. If you’re going to a heavily cash-based country like Japan, you’ll want to be able to withdraw cash from local ATMs, making both the foreign ATM fees and currency conversion fees especially important.

In addition to these two fees, there are also the foreign point-of-sale fees to consider, which are fees paid to merchants when paying at local retailers.

In 2016, these fees were the following:

Foreign ATM Fee Foreign Point of Sale Fee Currency Conversion
Min Max Average Min Max Average Min Max Average
$0.00 $5.50 $3.86 $0.00 $5.00 $0.81 0.00% 3.65% 2.80%
Source: www.canstar.com.au. Data collected 17 August 2016.

According to the table below, there have been some slight changes since then.

Number of products Foreign ATM Fee Foreign Point Of Sale Fee Currency Conversion
Min Max Average Min Max Average Min Max Average
All 112 $0.00 $5.50 $3.52 $0.00 $5.00 $0.91 0.00% 3.65% 2.66%
Source: www.canstar.com.au (04/08/2017)

You can see across the market as a whole that things can potentially become costly with the wrong travel debit card. You could end up paying as much as $5.50 per ATM withdrawal, while the average of $3.52 isn’t cheap either. These fees can really add up with the addition of a fixed fee and currency conversion fees!

Currency conversion fees are quite similar to those of travel credit cards. While the average conversion fee on credit cards remained at 2.80% year-on-year, the average for debit cards fell slightly to 2.66%, indicating that more providers are dropping their fees.

How do these fees compare to just the travel debit cards that achieved a 5-Star rating in this year’s research? You can view a snapshot of the current 5-star travel debit cards, sorted by currency conversion fee (lowest first).

Fees on 5-Star Rated Travel Debit Cards

As with travel credit cards, there is a major difference in terms of paying fees on your everyday purchases with travel debit cards:

Number of products Foreign ATM Fee Foreign Point Of Sale Fee Currency Conversion
Min Max Avg Min Max Avg Min Max Avg
5-star 10 $0.00 $5.00 $1.25 $0.00 $0.00 0.00% 2.50% 1.50%
Source: www.canstar.com.au (04/08/2017)

The average ATM withdrawal fee for 5-Star travel debit cards in foreign countries is $2.27 less than the market average and for foreign point-of-sale purchases, there are no fees on any 5-Star travel debit cards at the time of writing. The average currency conversion fee on everyday purchases and ATM withdrawals is just 1.50%, 1.16% less than the debit card market average.

There are some standout cards rated on the Canstar website that have no fees for at least one of these three categories. The Citi Plus Transaction Account, for example, has zero purchase, currency conversion or monthly fees.

Compare Travel Credit and Debit Cards

What else to look for in travel credit & debit cards

While you shouldn’t solely rely on these cards to make do while travelling (it is advised to always carry some cash), travel credit and debit cards can be an easy and hassle-free way to access your funds while in another country.

With credit cards, we recommend looking at some of the features they offer, such as low-interest rates and other complimentary extras like travel insurance and airport lounge access. Generally speaking, you should look for a card that has a solid combination of a lack of fees, price and extra features and bonuses. You can look for such a card on the Canstar website:

Compare Travel Credit & Debit Cards with Canstar

Canstar also rates travel money cards, which are different to travel debit and credit cards but are a popular option with travellers nonetheless. Find out how they are different here.

Compare Travel Money Cards

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