Avoid currency conversion and overseas ATM fees or receive complimentary travel insurance with a credit card on your next holiday.
There are many ways for Australians to take their cash on holiday, including credit cards designed for overseas use. These credit cards generally charge low or no foreign transaction fees, no currency conversion fees and no ATM withdrawal fees while offering travel-centric perks such as complimentary travel insurance, rewards programs and airline lounge passes. Unfortunately, these cards aren't entirely cost-free though. As the best* credit card for you to use overseas will depend largely on where you're travelling, how you plan on spending and your financial situation, you can use this guide to compare your options and find the right card for you.
Comparison of the best* credit cards to travel with
Compare the list of credit cards below with $0 Foreign Transaction Fees
How to compare credit cards for overseas travel
Credit cards provide you with access to credit overseas to make purchases. This type of credit card can provide additional benefits including zero fees on overseas purchases, $0 ATM withdrawal fees and complimentary travel insurance. To help make your comparison easier, we've outlined some of the fees and features you can factor into your comparison to find the right card for you.
Features of travel credit cards
International acceptance
In your hunt for a credit card to use overseas, one of the first features to consider is international acceptance. Credit cards with affiliation to Visa or MasterCard find acceptance in most countries around the world, at ATMs and EFTPOS terminals alike. Acceptance of Diners Club and American Express cards is not as widespread, and their use could attract higher fees.
Credit card fees
The fees you have to pay when you use your credit card overseas can have a significant effect on how much you end up repaying on your credit card account, so make sure you pay due attention to this. Here are some of the fees you can expect when using your credit card outside Australia:
- Foreign transaction fees. When you make an international purchase using your card, the money goes through currency changes. Your credit card, for example, converts Australian dollars to US dollars first, and then proceeds to convert the US dollars to the required currency. When this happens, you're usually charged a fee between 2% and 3%. If you want to avoid this fee each time you make a transaction overseas, consider a credit card that doesn't charge a foreign currency conversion fee.
- Annual fees. If you have a card that's designed for overseas use and it comes with extra features, it's likely that it could also come with a higher annual fee. Before you apply, make sure the value you get from the card's features outweigh the cost. Some cards also come with no annual fees for a promotional period or for the life of the card, so you should also factor this into your comparison.
- ATM withdrawal fees. If you use your credit card to withdraw funds overseas, you might be charged a few different fees. Firstly, most credit cards charge a cash advance fee when you use your card for ATM withdrawals (whether you're in Australia or overseas). As well as the cash advance fee, you'll immediately attract the high cash advance interest rate. Secondly, many banks charge an overseas ATM withdrawal fee when using your card for this withdrawals outside of Australia. Thirdly, the local ATM provider might also charge a withdrawal fee. If you want to avoid this last fee, consider using a credit card that belongs to an ATM alliance.
Complimentary insurance
If you're travelling overseas, you're going to have to organise international travel insurance. Using a credit card that offers complimentary insurance can help you save the time and money you'd otherwise spend on standalone cover. Depending on the card, the international travel insurance usually includes overseas medical insurance, transit accident insurance and travel delay insurance to name a few. The cover might also extend to your spouse or any dependent children travelling with you. As well as travel insurance, some credit cards offer purchase security insurance and extended warranty so you can shop with peace of mind. Complimentary insurance is often a feature of platinum credit cards, so make sure the feature is worth the cost of the card before applying.
Exclusive Credit Card Offer
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- Eligibility criteria, T&Cs, fees and charges apply.
Frequent Flyer benefits
Using frequent flyer credit card is an easy way to pick up rewards points as you spend overseas. Depending on the card, you might be able to redeem these points for flights with a specific airline, accommodation with partner hotels, travel vouchers, cash back on your account or products from a rewards store. If your card is designed for overseas use, you might find that you can even earn more points on foreign purchases. Compare frequent flyer credit cards with no foreign transaction fees to earn points without paying an extra cost overseas.
What should I be aware of when using a credit card overseas?
- Adding funds to your credit card. There are certain people who add funds to their credit cards accounts before they leave for overseas, and they then make use of these funds through their card in the form of a debit card. By doing this, you can avoid paying interest. What you should know is that card providers don’t take any responsibility for funds you add to your credit card account, so if you end up losing your card, and if someone accesses the money in your account, you might lose out on valuable funds.
- Consider other options. Using your credit card is not the only way you can spend money overseas. You can turn to traveller’s cheques and travel money cards, and you can even look forward to using a MasterCard or Visa debit card.
- Excessive debt. When overseas, you might be tempted to buy one or more things that you can’t really afford, and since a credit card gives you instant access to money, you could let temptation get the better of you. Remember at all times that you’d have to repay all the money you spend using your credit card, and avoid getting into a situation that is difficult to handle.
What are the pros and cons of using a credit card overseas?
Pros
- Global acceptance. If you're using a MasterCard or Visa credit card, you'll be able to use your credit card in millions of locations around the world. American Express and Diners Club cards are also accepted worldwide, though in fewer places than Visa or MasterCard.
- Travel perks. Credit cards designed for overseas use often come with travel-related benefits such as frequent flyer rewards programs, complimentary insurance and airline lounge passes.
- Security of credit. When you're travelling overseas, it's wise to have more than one way to access your cash. Even if you have a prepaid card or debit card organised for everyday spending, a credit card can be used as a back up and the security of credit could come in handy in an emergency situation.
Cons
- Fees. Depending on the card, using your credit card overseas can come with many costs. Make sure you understand exactly what you'll pay when using your card for foreign transactions before you apply.
- Limitations. Some cards come with limitations, including eligibility requirements, restrictions on how and where you can use the card plus, if it comes with a rewards program, constraints on your point earning opportunities.
- Temptation to spend. While a line of credit can provide you with peace of mind, it might also tempt you to spend money that you don't really have. Remember that you'll have to pay back everything you charge (plus interest in many cases).
If I have a 28 degrees Mastercard, does it mean when I withdraw cash from an overseas ATM that there will not be a withdrawal fee?
Thanks for your help in clarifying my query.
Hi Bebe, thanks for your inquiry!
The 28 Degrees MasterCard provides no international transaction fees on purchases, which only covers currency conversion rate charges. Overseas ATM withdrawals may still incur a charge, depending on the local ATM’s withdrawal policies and fees.
Cheers,
Jonathan
Hi,
Is there any card that offers zero foreign transaction fee, and currency conversion fees? If not what card offers the lowest fees.
Regards
Tony
Hi Tony,
Thanks for your question.
You can compare a range of cards that charge no foreign currency conversion fees or transaction fees on this page.
I hope this will help.
Thanks,
Elizabeth
Hi,
Can I obtain cash out at the point of purchase in the USA like we can here in Oz?
Hi N,
Thanks for your question.
This is possible, but it’s up to the discretion of the retailer.
I hope this has helped.
Thanks,
Elizabeth
I have been told that to avoid bank currency exchange rates that if you load your credit card up with extra money that there is no foreign exchange rate charge – is this true ?
I have the NAB premium card.
Hello,
I would like to avoid taking a credit card and have the Qantas traveller card but am a little confused with conversion – I am going to Brazil and the card does not hold the Brazilian Real, but if I load it up with Australian or American money, can I still use it at an ATM in Brazil ie: will the machine convert my money and give out Brazilian Real? Thank-you.
Hi Emma,
Thanks for your question.
Yes you can still use an ATM in Brazil, just make sure it displays the same symbol on your card (Mastercard/Visa/Amex etc). Usually the ATM gives out the local currency as well.
Please note a currency conversion fee could apply, because you don’t have the preloaded currency read in your card.
Cheers,
Shirley
Hi Paul.
This is not correct. You will be charged a currency conversion fee regardless of whether your account is in a positive balance. You can compare travel money options on this page. These cards do not charge a currency conversion fee when you carry out a transaction in a currency other than Australian dollars.
Thanks for your question.
i want know how can i get cash from my international credit card.
Hi Renotta. Thanks for your question. There are a couple of ways you can access cash from a credit card when you use it overseas – either you can withdraw it from an ATM, or you can use your card to make a purchase over the counter. Fees and charges will vary depending on how you use you card. If you’re using your card to withdraw from an overseas ATM, you will incur: cash advance interest rate, cash advance fee, international ATM fee, local ATM fee and cross currency conversion fee – these charges vary depending on the card and the ATM you use. Making a purchase over the counter is cheaper overseas and you just get charged the cross currency conversion fee and the purchase rate of interest – excluding any interest free days. There are cards that do not charge some of the fees listed above, you can check the fees in ‘fees table’ at the bottom of each card’s review and application page, and you can compare travel money options here. Let me know if you have any questions about travel money. Bon Voyage! Jacob.