Debit cards with no foreign transaction fees
If you travel a lot, an Australian debit card with no foreign transaction fees will save you money on every purchase you make overseas.
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Key takeaways
- Foreign transaction fees are charged as a percentage of every overseas purchase, so avoiding them can save you hundreds on an average trip.
- Consider accounts like Macquarie Transaction for no international transaction and ATM fees.
- Beyond transaction fees, look for no monthly fees and note overseas ATM fees, often $5 or more per withdrawal.
What is a foreign transaction fee?
Your bank charges a foreign transaction fee whenever a currency conversion is required. If you buy something from a US website with your Australian debit card your bank needs to convert your Australian dollars into US dollars. And it charges you a fee.
The foreign transaction fee is a percentage of the transaction value, and it varies by bank (compare each card's fee in the table above). For example, if you made a $300 purchase from an American site, a 3% foreign transaction fee would cost you $9.
This fee gets expensive if you make regular international purchases.
What are the best debit cards with no foreign transaction fees?
Macquarie Transaction Account
The Macquarie Transaction Account and debit card has no account keeping fees, no international ATM fees and pays a refund on any local ATM fees charged. Plus, you can earn a high interest rate of 3% on balances up to $250,000 in your account without needing to meet any conditions. So you can earn interest while you travel!
Suncorp Everyday Options Account
This account has no monthly account keeping fees, no international transaction fees and no overseas ATM withdrawal fee by Suncorp (the ATM operator fees may still apply though). You can also link up to 9 sub accounts to your main account which could help you budget and manage your travel expenses.
Looking for a credit card instead? Check out these credit cards with no foreign transaction fees.
How do debit cards with no foreign transaction fees work?
You usually receive a debit card when you open an everyday bank account. The debit card allows you to access your own money to make everyday purchases in store or online, plus lets you withdraw your own money from an ATM. Some banks offer debit cards with low or even no foreign transaction fees. This means that you can still make purchases using your own money, but you won't be hit with the fee when you make overseas purchases.
How much can I save with a no foreign transaction fee debit card?
The amount you could save depends on how much you're planning to spend overseas. If you go overseas often, you could save hundreds of dollars (or more) per trip. Take a look at the fictional example below of a short overseas holiday.
For the fictional holiday above, you could save $238 when no foreign transaction fees are charged.
Benefits of using a debit card with no foreign transaction fees
- Save money on international purchases made online. You can avoid paying a percentage fee on every purchase when you shop online from overseas retailers.
- Save money when using your card overseas. You can use your card overseas just as you would at home and won't have to worry about transaction fees on every single purchase.
- Global and easy. You can use your Australian debit card all over the world, in store and online plus at international ATMs.
- No overspending and no interest accruing. Unlike a credit card, a debit card only allows you to access the cash in your transaction account so you can't rack up a big bill.
- Keeping it simple. You don’t have to load foreign currency on to your card, you don’t have to exchange cheques for cash, and you don’t have to apply for a credit card or separate travel card.
What fees are normally involved when using a debit card for international purchases?
- Foreign transaction fee. This is a percentage of the transaction value, charged when a currency conversion is required.
- Overseas ATM fees. This can be around $5 or more each withdrawal. Try to use your bank's international ATM partners and withdraw larger sums to reduce your ATM visits.
- Foreign exchange rate margin. Banks make money by adding a margin on top of the real exchange rate when transferring one currency into another. While this cost is not as transparent, if your bank is offering a poor exchange rate you could be losing money when using your debit card overseas.
- International money transfer fee. If you'd like to send money to someone overseas from your regular bank account in Australia, your bank will likely charge you a hefty fee, sometimes over $20. To avoid this, use a dedicated international money transfer service instead.
How do these debit cards compare to travel money cards or credit cards?
Credit cards
- Credit cards can give you access to extra funds outside of your available debit balance, which can come in handy during emergencies.
- There are credit cards available that don't charge foreign transaction fees.
- Overspending can become a problem and you could end up accruing high amounts of interest if you’re unable to pay your balance in full.
- Be aware that using your credit card to withdraw funds from an ATM, or to buy foreign currency or travellers cheques, is considered a cash advance transaction. These transactions attract an additional fee.
Travel money cards
- Load multiple currencies onto a single travel card to avoid currency conversion fees at the time of purchase.
- You can lock exchange rates in place before you travel.
- You may be charged a high fee when loading funds on the card or withdrawing money from ATMs.
- Exchange rates may be less competitive than what your bank offers.
Pros and cons of using a debit card with low foreign transaction fees
Pros
- Access your own money. Since you’re accessing money from your own bank account, you don’t have to worry about repayments, paying interest or overspending.
- Low or no foreign transaction fees. If you’re outside Australia for a considerable duration and end up using your debit card regularly, low or no foreign transaction fees can lead to noticeable savings.
- No transfers required. Since your debit card gives you direct access to money in your bank account, you don’t have to worry about transferring money from your account to another account or card.
- No conversion required. Using your debit card to pay in foreign currency is easy and does not require you to carry out complicated calculations. Your card provider does this for you using current exchange rates.
Cons
- No access to extra emergency funds. You can only access funds in your bank account, and no more, so in case of an emergency a credit card could work better.
- Limited choice of providers. While a number of Australian financial institutions provide debit cards, not many offer debit cards with no foreign transaction fees, so your choices remain limited.
- Conditions to meet. There may be account conditions you're required to meet in order to enjoy no foreign transaction fees.
Frequently asked questions
Karen Eley is the founder of Women Talking Finance, which provides money coaching and financial literacy and education services. An experienced and former financial adviser who has worked in financial services industry for 22 years, Karen is a Certified Money Coach (CMC), holds a Bachelor of Accounting and an Advanced Diploma in Financial Planning and CFP.
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How to use a debit card for online payments
Every wondered what the process was for your debit card when you made an electronic transaction?
Citibank is soon to have their cards charging international transaction fees or overseas ATM fees (sorry I can’t remember which). Is it still in your opinion the best to use? It’s a real shame!
Hi Connor,
Thank you for your enquiry.
Citibank will swap its current Visa debit cards with MasterCard debit cards, beginning March this year, but there will be no changes to the international transaction fees or free Citibank-branded ATM overseas withdrawals, aside from the fact Mastercard exchange rates will apply, rather than Visa.
You may want to know more about Citibank switching to Mastercard through our website.
You may also check other cards for overseas use and learn more about your options.
Kind regards,
Jason
My 15 year old daughter is traveling to Italy and Spain on a school excursion. What is the best option for card access to spending money when she is away? Travel card or debit card?
Hi Kathy,
Thanks for your question.
As a comparison website, we provide general advice only. There are plenty of options for being able to access spending money while overseas. As you may have seen on this page, debit cards allow you to do this through ATMs or EFTPOS terminals. With debit cards, it’s important to note any overseas ATM fees or currency conversion fees. Our comparison tables on this page helps you compare debit cards with transaction fees and debit cards with no overseas ATM withdrawal fees.
Hope this helps.
Clarizza
You have “Westpac Choice” appearing under “No foreign transaction fees”, this is incorrect they do charge these fees
Hi GM,
Thanks for your feedback.
You are correct in saying the Westpac Choice does charge international transaction fees.
We have reviewed the table, it should be accurate now.
Many thanks!
Hello,
I am interested in getting a CitiBank Plus account because we travel quite a bit. Quite a lot of my travel is in Germany. I have looked up on CitiBank website for ATMs in Germany but nothing seems to come up. Do they not have any ATMs in Germany? Are there any partners there which provides the same waiver for ATM fees and transaction fees.
Thanks,
Cindy
Hi Cindy,
Thanks for your question.
Unfortunately Germany doesn’t have a Citibank presence. However, according to user reviews, you may be able to use most ATMs in Germany for free. The Citibank Plus everyday transaction accountcharges no account keeping fees, no overseas ATM fees and no foreign transaction fees. Keep in mind that the local ATM operator may still charge its own fee when you use an ATM overseas.
I hope this helps.
Cheers,
Shrirley