Travel credit and debit card fees in 2018 – are you paying too much?

As many people who have been overseas can tell you, everyday expenses can really add up quickly. Whether it’s paying for dinners, drinks, taxis, sightseeing or souvenirs, spending money overseas is not always as straightforward as spending money in Australia.

Some people like to just use cash, while others use a travel money card, a credit card or their debit card.

Understanding the differences between a credit card or debit card when travelling overseas and comparing the fees that could apply may help you choose the best travel credit card or debit card for you.

Here are some key differences between travel credit cards and debit cards.

Jump to the 5-Star cards…

What fees do travel credit cards charge?

As a part of Canstar’s annual Travel Credit and Debit Card Star Ratings, we’ve looked at the minimum, maximum and average fees for both types of cards to give you an idea of what you might pay when using these cards to make overseas purchases.

Canstar evaluated the cards based on two traveller profiles: occasional and regular. The occasional traveller takes one overseas trip a year, while the regular traveller takes two overseas trips a year. The tables below show the annual fees for travel credit cards for occasional and regular travellers were on average, significantly lower than the market average. For the occasional traveller, the market average for annual travel credit card fees was $113.77, while for 5-Star Rated cards, the average was $46.33.

Travel Credit Card Costs – Occasional Traveller
Market Min Market Average Market Max 5-Star Average
Annual Fee $0.00 $113.77 $700.00 $46.33
Currency Conversion Fee 0.00% 2.82% 3.65% 1.23%
Cost of $5,000 of Overseas Spend $0.00 $140.91 $182.50 $61.62

Source: Canstar. Data correct as at 31 August 2018

Travel Credit Card Costs – Regular Traveller
Market Min Market Average Market Max 5-Star Average
Annual Fee $0.00 $113.77 $700.00 $109.59
Currency Conversion Fee 0.00% 2.82% 3.65% 2.06%
Cost of $10,000 of Overseas Spend $0.00 $281.82 $365.00 $102.94
Reward Return* $0.00 $73.37 $176.79 $76.95
*Reward return is only considered in the Regular Traveller profile and is only based on overseas spend (i.e. $10,000)

Source: Canstar. Data correct as at 31 August 2018

Canstar Research found a number of fee-free credit cards for both occasional and regular travellers. It is the same for travel debit cards, which has four institutions offering free-fee products for travellers (some may require you to meet certain conditions).

One of the most significant travel credit card fees is currency conversion costs. At the time of writing, the average currency conversion fee was 2.82% and the maximum was 3.65%. However, the average currency conversion fee of Canstar’s 5-Star Ratings credit cards was 1.23%.

The fee comparisons above show that your average 5-Star rated card from Canstar attracts significantly lower fees than other cards in the market.

Canstar’s Senior Research Analyst Josh Sale said with a number of cards scrapping currency conversion fees altogether in the past year, there was no shortage of cards that represented good value.

He said while fees were one aspect to consider, other factors such as rewards, insurance coverage and airline lounge access could provide additional value to certain consumers, particularly for those who travel more frequently.

Related article: Credit cards with no currency conversion fees

Be wary of complimentary add-ons

One of the reasons some people choose credit cards over a simple debit card when travelling is the perks it might offer, such as airport lounge access, tempting rewards programs and free travel insurance.

Despite the lure of these extra benefits, the data indicates that they may not be so free after all, as the table of fees below show.

Cost of Cards with Complimentary Travel Insurance
Market Min Market Average Market Max Cards with Travel Insurance Average
Annual Fee $0.00 $113.77 $700.00 $200.01
Currency Conversion Fee 0.00% 2.82% 3.65% 2.77%
Cost of $5,000 of Overseas Spend $0.00 $140.91 $182.50 $138.73
Cost of $10,000 of Overseas Spend $0.00 $281.82 $365.00 $277.46

Source: Canstar.

“In general, cards that come with extra perks such as rewards programs, concierge service and complimentary travel insurance do tend to come with higher costs than other cards available in the market,” Mr Sale said.

“However, there are some exceptions to this general rule, with a number of Canstar’s 5-Star cards offering low or no annual fees in addition to features such as providing complimentary travel insurance.”

Mr Sale said it was wise to carefully read and understand your policy documents before relying on your card’s travel insurance in order to know what you are and aren’t covered for.

“It’s also important to understand how the policy is activated,” he said.

“In some cases, it is as simple as notifying your card issuer via their app to advise of your travel plans, but more commonly you will be required to meet certain spending conditions such as booking your return flights on the card.”

What fees travel debit cards charge?

When it comes to debit cards, the main fees to be aware of are monthly account keeping fees, ATM withdrawal fees and point of sale transaction fees.

As with travel credit cards, there is a distinct difference between the market average fees and the fees charged by Canstar’s 5-Star rated cards. There are also cards that don’t charge any fees at all for transacting overseas.

Travel Debit Cards
Market Min Market Average Market Max 5-Star Average
Monthly Account Keeping Fee* $0.00 $2.69 $35.00 $0.80
Cost of $2,500 of Point of Sale Transactions $0.00 $74.95 $141.25 $32.50
Cost of $2,500 of Cash ATM Withdrawals $0.00 $96.18 $141.25 $22.50
*Monthly Account Keeping Fees can often be waived when certain conditions are met (e.g. regular monthly deposit into account)

Source: Canstar.

Mr Sale said having access to your regular everyday banking account while overseas can be convenient, but also costly if you don’t have the right account.

“It is important to understand the charges you’ll incur on your card when both transacting on the card at point of sale terminals and also when withdrawing funds from ATMs,” he said

“You should consider looking for an account that doesn’t charge a currency conversion fee or an ATM withdrawal fee for foreign ATMs – many accounts will charge both.”

Mr Sale said it was becoming more common for some providers to allow holders to transact completely fee-free overseas with some products, with many familiar brands such as Macquarie Bank, Citi, ING and UBank offering this feature.

“One fee that is still difficult to avoid is third party ATM charges which are charged by the owner of the ATM that you are using overseas,” he said.

“However, ING recently announced they would be rebating these charges for consumers who meet certain requirements.”

Compare Travel Debit Cards

2018 Travel Credit & Debit Card Star Ratings

After analysing a grand total of 190 credit cards and 102 debit cards from 77 institutions, Canstar is pleased to announce the winners of the 2018 Travel Credit and Debit Card Star Ratings.

These Star Ratings involve a sophisticated rating methodology, unique to Canstar, that compares both cost and features across both credit cards and debit cards it rates, with a particular focus on the cards’ overseas fees and features.

Canstar assesses three different customer profiles for travel debit and credit cards. They are:

  1. Travel Credit Cards – Occasional Traveller
  2. Travel Credit Cards – Regular Traveller
  3. Travel Debit Cards

The following Travel Credit and Debit Cards received a 5-Star Rating in 2018 (listed in alphabetical order).

5-Star Travel Credit Cards

Travel Credit Cards – Occasional Traveller
Bank Australia – Visa Credit Card
Bank First – Visa Classic Credit Card
Bankwest – Breeze Platinum Mastercard
Bankwest – More Platinum Mastercard
Bankwest – Qantas Platinum Mastercard
Bankwest – Zero Platinum Mastercard
Coles – No Annual Fee Mastercard
Coles – Rewards Mastercard
Endeavour Mutual Bank – Visa Credit Card
First Option Credit Union – Low Rate Visa Credit Card
Horizon Credit Union – Visa Credit Card
ING – Orange One
Latitude Financial Services – 28 Degrees Platinum Mastercard
Macquarie Credit Union – Visa Credit Card
ME – frank credit card
UniBank – Visa Credit Card
Westpac – Lite Card

Source: Canstar Travel Credit and Debit Cards Star Ratings 2018.

Compare Travel Credit Cards for Occasional Travellers

Travel Credit Cards – Regular Traveller
ANZ – Rewards Travel Adventures Card
Bankwest – Breeze Platinum Mastercard
Bankwest – More Platinum Mastercard
Bankwest – More World Mastercard
Bankwest – Qantas Platinum Mastercard
Bankwest – Qantas World Mastercard
Bankwest – Zero Platinum Mastercard
Coles – Rewards Mastercard
Commonwealth Bank – Low Fee Gold Mastercard
Diners Club Australia – Frequent Flyers Club Card
HSBC – Platinum Credit Card
ING – Orange One
ING – Orange One Platinum
Latitude Financial Services – 28 Degrees Platinum Mastercard
QANTAS – Qantas Premier Everyday
Westpac – 55 Day Platinum
Westpac – Lite Card

Source: Canstar Travel Credit and Debit Cards Star Ratings 2018.

Compare Travel Credit Cards for Regular Travellers

5-Star Travel Debit Cards

Travel Debit Cards
Citi – Global Currency Account
Citi – Plus Transaction Account
First Option Credit Union – Access Saver
HSBC – Everyday Global Account
ING – Orange Everyday
Macquarie Bank – Platinum Transaction Account
Macquarie Bank – Transaction Account
Macquarie Credit Union – Cheque/Card Account S5
Macquarie Credit Union – General Savings Account
Regional Australia Bank – eFree
UBank – Ultra Transaction Account

Source: Canstar Travel Credit and Debit Cards Star Ratings 2018.

Compare Travel Debit Cards
For more information on how Canstar researches and rates travel card products, read our methodology below.

View Research Methodology

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