Enjoy the benefits of shopping online without paying transaction fees. Read on to learn how.
If you have ever bought an item online from a store based outside of Australia, then you might have had a shocker when you received your credit card bill. That’s because you saw an additional 2- 3% charge plus other “expenses” such as unfavourable conversion rates for your dollars.
There are some great bargains to be had on the internet, so fees or bad exchange rates shouldn’t stop you. Here are some ways to shop online and save on fees.
Knowing your options:
There are a number of credit cards, debit cards and travel cards available which won't charge foreign transaction fees.
Credit cards
There are a range of credit cards which waive foreign transaction fees when buying items and services from overseas merchants. These are offered by card providers including, Bankwest and GE Money. These credit cards come with a range of other features including complimentary insurance policies which may cover the item you buy from damage, theft or loss in the immediate months after purchasing it. Each card provider will have their own exchange rate, or might use the exchange rates set by MasterCard or Visa, so check these out before applying for any one card.
Debit cards
There's currently two debit cards on the market which waive foreign transaction fees. The Citibank Plus Transaction account and the NAB Gold Visa Debit card. The latter is only available to those with a NAB Private Tailored Package, whereas the Citibank Plus Transaction Account is available to most Australians. There's no minimum deposit required, account-keeping fees or fees for international ATM withdrawals or global funds transfers.
information on comparing debit cards
Travel cards
Travel cards are usually used when physically overseas, but if you still have a card lying around from a previous trip they can be used to avoid foreign transaction fees. Some cards require you to only spend on the supported currencies on the card, whereas others like the CBA Travel Card will waive foreign transaction fees on all foreign purchases regardless of the currency. These cards can have reload fees and other charges which might not make them a great tool to use in the long term. If you are looking to travel or interested in learning more, see our travel money guide here.
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- Currency conversion rate – if you are paying in a foreign currency, it’s inevitable that banks will give you less than the official currency conversion rate. Your choice should depend on just how much of a cut they will get from you in relation to what foreign transaction fees. Some cards will waive the foreign transaction fee but offer an inferior exchange rate, so be sure to investigate.
- Funds transfers - some cards, such as the Citibank Plus, offer free global funds transfers, which may suit shoppers who pay through funds transfers, for example on classifieds websites.
- Purchase protection insurance – as mentioned, there are some credit cards that offer this feature. It’s very useful for online purchases because it generally covers damages and theft.
- Global acceptance – how widely accepted is the payment method? Visa and MasterCard credit cards are accepted by almost all online stores. PayPal is also becoming a popular method to pay for goods and services online.
- Refunds – refunds are difficult to implement in practice. Although some credit cards do offer this feature, it is a long and stressful process. On the other hand, PayPal offers hassle-free refunds if you can prove that the seller did not abide by the agreement.
- High rewards points – if you have to use a credit card to make online purchases, it may be important to choose one that offers rewards. There are cards in the market that can award three points for every dollar you spend. So browse around and determine which one offers you the best deal.
Shopping online and finding yourself better deals and offers
Online shopping gives Australians access to attractive deals from international merchants. Whether you are looking for designer clothes, gadgets, or novelty items, you are sure to find them on countless websites that aim to serve you. You can now take advantage of these deals without worries once you know the facts about foreign transaction fees and how to avoid them. Once you have made your credit card or debit card choice, you may also want to find out if the merchant has promotional codes or sales on offer. We've grouped together some of the shopping offers from leading retailers here.
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