Pick your debit card wisely or risk getting smashed with overseas ATM fees
Debit cards are great if you don’t want a credit card. You’re not using the bank’s money so there’s no risk of getting into debt, and debit cards have fewer fees than credit cards and travel money cards. But taking your debit card overseas may not be the best idea. Like most accounts, the charges for using a debit card overseas are excessive. You can pay anywhere between $5 - $10 per ATM withdrawal at an international ATM. And there’s a 2 - 3% currency conversion fee that applies to all transaction to think about.
There are accounts that have no charge for currency conversion, no international ATM fees and some banks have ATM partnerships with different lenders around the globe. There are even accounts that offer rewards points too. if you don’t want a travel card or credit card, and just want to transfer your travel money between your savings and transaction account as you need it, then a debit card is a good idea. We’ve compared and outlined the options available if you want to use a debit card while you’re on holiday, and listed the pros, cons and frequently asked questions about these products below.
Debit cards for travel
How it works: Pay attention to the currencies you’re able to load onto the cards as well. Different cards support different currencies. The available currencies on each card should be the first consideration when comparing these products. If you spend on a currency not loaded onto the card, you will incur a fee for currency conversion, which in many cases, can be as high (if not higher) than the charge for currency conversion with other personal finance products.
Why debit cards work for travelling.
- Global ATM alliances. Mean you can avoid ATM withdrawal fees and currency conversion fees for purchases whilst you are overseas.
- Access your savings.Travel debit cards allow you to manage your spending more effectively by only accessing your funds, avoiding the need of applying for a credit card if you are not inclined to use one.
Considerations when choosing a debit card for travelling.
- Booking services. When you book with a hotel, vehicle or other rental agency the holding fee/ bond can often take a few days to return. This may cause your account balance to be temporarily lower and cause inconvenience when funds are required.
Compare Debit Cards for Travelling
Guide to Travel Debit Cards
What are the different types of debit card to take overseas?
Debit cards with no foreign currency conversion fee
This type of account does not charge for currency conversion when you transact in a foreign currency.
There’s currently only one debit card that does not charge an international transaction fee: the Citibank Plus Transaction Account.
The Citibank Plus Transaction Account also offers fee free international money transfers to any international bank account, and fee free ATM withdrawals at Citibank ATMs all over the world.
If you want to use this account while you’re on holiday, but don’t want to switch all your banking services to Citibank, you will need to ‘top up’ this account with funds so you can spend abroad. Remember that it takes a couple of days for a bank to bank transfer to go through.
Debit cards that offer rewards points
Rewards transaction accounts have traditionally only offered rewards or frequent flyer points on transactions made with the linked debit card. Offering points on the money held in the account — kind of like rewards points interest — is a new concept.
Spend while you’re on holiday and you can earn points which can be redeemed for a number of rewards, including flights. You can also earn points just by having money in your account.
Bankwest have two accounts that incentivise spending: The Bankwest Qantas Transaction Account and the Bankwest Rewards Transaction Account.
Bankwest Qantas Transaction Account
Earn Qantas Points when you spend on the Bankwest Qantas Transaction Account debit card. Earn points based on the amount of money you have in your account as well.
- Maximum Rate: 0.01% p.a.
- Standard Variable Rate: 0.01% p.a.
- Monthly Account Fees: $6
- Minimum Balance: $0
- Minimum Deposit: $0
- Bankwest Qantas Transaction Account
The Bankwest Qantas Transaction account is a Qantas Points addict’s dream. Earn 5 Qantas Points per purchase with your Debit MasterCard, 5 Qantas Points for every overseas ATM withdrawal and 12 Qantas Points for every $100 you hold in your account per month.
Although not as high as the standard 1:1 earn rate with most Qantas Frequent Flyer credit cards, the Bankwest Qantas Transaction Account does not charge for overseas ATM withdrawals and the account-keeping fee is waived if you deposit more than $2,000 per month.
- Bankwest Rewards Transaction Account
The Bankwest Rewards Transaction Account gives you Bankwest Rewards Points for a number of different transactions, and for having money in your account, too.
Like the Bankwest Qantas Transaction Account, the Bankwest Rewards Transaction Account also waives the international ATM withdrawal fee. This is a saving of approximately $4 per transaction.
As with all rewards accounts, you have to weigh the value of the rewards on offer against the fees. In the case of the Bankwest accounts, although they do not charge for currency conversion, there is a charge for currency conversion: 2.95%.
It’s not a necessity if you’re getting a debit card to use overseas. You can still transfer funds from your regular transaction account over to your travel money debit card, you just need to plan you transfer so you don’t run out of cash — allow up to three days for the transfer to clear.Back to top
You can have a look at the transaction accounts and debit cards suitable to take overseas in the comparison table at the top of this page. Compare these cards based on their fees and return value. Return value comes in the form of interest, rewards or waiving certain fees.
If you can’t decide between the Citibank and Bankwest accounts, think about it like this. The Citibank Plus Transaction Account does not charge for currency conversion (approximately 3%); while the Bankwest rewards accounts do not charge for international ATM withdrawals (approximately a $4 saving). So if you’re planning on making frequent ATM withdrawals (not a good idea considering the local ATM operator fee will still apply), then you may want to consider the Bankwest accounts. However, if you’re planning on mainly using the account to make over the counter purchases, then the Citibank Plus Transaction Account may be better suited.Back to top
What are the pros and cons of using a debit card when you’re overseas?
- Spend only what you have. Debit cards are not a credit product, you can only spend what you’ve deposited into the account and nothing more. This is great for the budget conscious travellers.
- Protected from card fraud. You won’t be liable for fraudulent transactions detected on your account if you stick to the requirements of the Visa and MasterCard no liability guarantees. These guarantees give you a full reimbursement if you’re the victim of card fraud.
- No emergency cash. This can be a negative as well as a positive. There’s no access to cash through a cash advance facility if you find yourself in trouble and in need of funds.
- Fees and charges. Unless you have an account which waives the currency conversion and international ATM fees, using an Australian debit card overseas will cost you a fortune, especially if you’re making frequent ATM withdrawals.
- No backup. Unlike travel cards, debit cards do not come with a backup. If you lose your debit card, or it’s stolen, it could be a couple of weeks before you get a replacements.
Avoid this if you use your debit card abroad
Avoid making frequent ATM withdrawals while you’re abroad. Even if you have an account that does not charge for you for international ATM withdrawals, local operator fees will still apply. Conversely, Australian banks that have international ATM partners will still charge you a fee for international ATM withdrawals, even if the local ATM operator waives the fee on their end.
Frequently asked questions about using a debit card in another country
Will my debit card work in another country?
The answer is probably yes. Visa, MasterCard and EFTPOS debit cards should work at the majority of ATMs you encounter. Be sure to look for the logos which are displayed on the front of the machine.
If your debit card does not have a chip, it will not work at overseas merchants when you go to pay over the counter.
What fees will I be charged by my bank when I use my debit card?
The fees and charges vary depending on whether you use your debit card at an ATM or to make a purchase over the counter, and on the type of card you’re using.
Expect to pay the following with the majority of Australian debit cards:
When you withdraw cash from an ATM, there’s the international ATM fee (about $4 - 5 depending on the account issuer) and a local ATM fee of roughly the same amount. Add the currency conversion fee (2 - 3% on average) to this transaction as well.
Paying over the counter:
When you make a purchase over the counter, only the currency conversion fee will apply.
You can avoid the currency conversion fee by going with a debit card that waives this fee, like the Citibank Plus Transaction Account.
If I apply, how long till I receive my new debit card?
Allow up to two weeks to receive your debit card in the mail following a successful application.
What happens if my debit card is lost or stolen?
If your debit card is lost or stolen, get in touch with Visa or MasterCard and your bank right away and they will block the card and arrange for a new card to be sent to you.
What if I see transactions on my account that I didn’t make?
If you’ve been the victim of card fraud, notify MasterCard or Visa and your financial institution immediately and they will open an investigation into the transactions. If you’ve been defrauded, and you’ve taken steps that comply with the guidelines of the MasterCard and Visa no liability guarantees, you will be fully reimbursed.
Which accounts do not charge for currency conversion?
Currently only the Citibank Plus Transaction Account does not charge for currency conversion.
Which accounts don’t charge for international ATM withdrawals?
Currently only the Bankwest Qantas and Rewards Transaction Accounts do not charge for international ATM withdrawals.
What do I press when I want to make a purchase over the counter?
When you want to make a purchase over the counter at an international merchant, press ‘debit’ to complete the transactions. If your debit card is enabled with contactless technology, simply press your card against the reader for transactions under $100.