How do credit cards with no foreign transaction fees work?
When you travel or shop online with an overseas business, many cards charge a foreign transaction fee of around 2–3% of the purchase amount. But credit cards with 0% foreign transaction fees waive this cost or give you a rebate, helping you save money on international transactions.
How much can I save with a 0% foreign transaction fee card?
It depends on the amount you spend overseas and the fees you would pay if you used a different card. But as an example, if you spent $2,000 on a card with a 3% international transaction fee, it would cost you $60. If you had a card with a 0% foreign transaction fee you wouldn't pay anything, so you'd save the full $60.
And if you had a credit card with a higher fee of 3.4% for international transactions, you'd save even more ($68 in this example).
Keep in mind that the cost of foreign transaction fees may not be obvious straight away, as they are added as separate transactions on your credit card account.
The Australian Competition and Consumer Commission (ACCC) has also warned people that some major online brands will attract foreign transaction fees, even if the website ends in .com.au or the price is shown in Australian dollars.
If buying overseas items or travelling overseas, consider an international transaction fee-free credit or debit card. Make sure to compare fees and charges of different options.”
How to compare no foreign transaction fee credit cards
0% fee requirements
Some credit cards automatically waive foreign transaction fees when you make an international purchase.
Others offer a rebate on foreign transaction fees when you meet specific requirements, such as spending a set amount per month. If that's the case, you could still be charged a fee if you don't meet the requirements.
Credit card annual fees typically range from $29 to $400 or more for higher-end cards. You can weigh this cost against the value you'd get from 0% foreign transaction fees and any other perks to help choose a card.
If the 0% foreign fee savings aren't as much as you thought, you could be better off comparing $0 annual fee credit cards. You could also consider a card that offers both no foreign transaction fees and no annual fee, although there are only a few of these on the market.
Interest rates on these cards range from around 10% to 27% for purchases. If you pay off your credit card as you go – or pay the total by the due date on your statement – you'll typically get interest-free days on your purchases.
But if you end up carrying over a balance, a low rate credit card could be a more cost-effective option.
Other travel benefits
Some cards offer additional perks when you're travelling, which can include:
If there's another benefit you want, you could use Finder's table filters to narrow down your comparison of 0% foreign transaction fee cards. Just make sure you check what requirements you need to meet to use the perks.
Australian credit cards offer zero liability for fraudulent transactions and 24-hour emergency support services. Most also offer fraud-monitoring services.
Other security features can include virtual cards, transaction limits for overseas spending, temporary account blocks and extra online security through Visa Secure, Mastercard SecureCode or American Express SafeKey.
Overseas ATM withdrawal fees
Overseas ATM fees typically cost around $5 or between 2-3% of the total transaction. And that's not including any charges added by the overseas ATM operator.
There are some credit cards that offer $0 international ATM withdrawals, but keep in mind that you'll still pay cash advance fees and any third-party charges.
Cash advance costs
When you use a credit card to withdraw cash, buy foreign currency or make any other cash advance transaction, you'll pay a fee worth around 2-4% of the transaction. You'll also be charged interest at the cash advance rate, which is higher than the purchase rate on most credit cards.
If you need to get cash when you're overseas, you can avoid these costs by using a debit card or prepaid travel card instead.
Want to use your credit card in Australia as well?
The range of credit cards that offer no foreign transaction fees means it's worth looking for other features that you want on your credit card. For example frequent flyer points, 0% interest rate offers, cashback bonuses or something else. The key is to find a card with features that add value when you're shopping in Australia and overseas.
More credit card tips for travellers
When you're planning to use your card overseas spending, keep the following details in mind:
- Daily cash withdrawal limits. Some credit card providers have a limit on the amount you can withdraw from an ATM using your credit card – and it could be lower than your available credit limit. Check your credit card account details through Internet or mobile banking, or call your provider for specific information on these limits.
- Global ATM alliance networks. Many Australian credit card providers have ATM alliance networks that extend around the world and allow you to get cash out overseas without paying an ATM withdrawal fee. For example, a credit card from Westpac, St.George, BankSA or Bank of Melbourne gives you access to the Global ATM Alliance network, which includes Westpac NZ (New Zealand), Barclays (UK), Bank of America (US) and Deutsche Bank (Germany and Spain).
- Exchange rates. Currency exchange rates will apply when you use an Australian credit card for a transaction in another currency. This rate can fluctuate daily, and can make it hard to work out the cost in Australian dollars (until it's added to your transaction list). Check with your credit card provider to find out when exchange rates are updated, or just keep an eye on your transaction list and available balance to work out how much you've spent once the transactions converted to Australian dollars.
Meet our money expert Graham Cooke
Graham heads Finder's insights team and specialises in a variety of financial topics, including credit cards, loans, insurance and investing. He regularly appears on TV including ABC News, Sunrise and Today, and edits Finder's Insights column.
Graham's top credit card tips
- Credit cards often charge a significant foreign transaction fee, so check your card's terms before you travel.
- A card with low or no international transaction fees could help you save when travelling or shopping online with overseas businesses.
- You could also consider debit cards which offer low transaction fees or refund ATM charges.
Frequently asked questions
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