Paying Off An Overseas Credit Card

What’s the cheapest option for paying an overseas credit card?

A user wrote in with this question:

Paying off the debt using a 'cheque to self' from Citi

The Citi Ready Credit is very unique and allows you make a 'cheque to self' which can be used to then payoff any of your debts. You can read our full review on the Citi Ready Credit here to find out more about the product and see whether or not you're eligible.

Is it possible to pay an overseas debt with a balance transfer?

This is a question that’s been asked more and more recently: how does a person moving country a) bring their debt with them when they move and b) consolidate that debt into one low interest rate like with a balance transfer?

A balance transfer is one of the most popular options for Australians looking to get ahead with their credit cards, but the rules around accepted balance transfers can be restrictive.

1. The balance must come from an Australian credit card or store card.
2. The balance must not come from a credit card related to the institution you're transferring to.
3. You can only transfer up to approximately 95% of your approved credit limit on your new card.

A balance transfer from a New Zealand (NZ) credit card to an Australian credit card is out of the question and consolidating the debt through a personal loan with lenders like Fox Symes or GE Money is also not an option. Much like credit card providers offering low interest balance transfer promotions, these institutions will not ‘buy’ overseas debt and ‘resell’ it to a customer at a low rate of interest.

To answer Michelle’s question, an option for her is to balance transfer from her existing NZ credit card to a new NZ credit card taking advantage of a balance transfer promotion - they do exist in the NZ credit card market. This works much the same way had she performed a balance transfer to an Australian credit card. She would transfer the debt, receive a low rate of interest for a set period of time and use the low interest period to pay off as much of the outstanding balance as possible - she would do this from Australia, converting Aussie dollars to NZ dollars to pay off her card. This is the only way to pay her card from Australia, but international money transfers can be fraught with fees and charges.

Paying a credit card from another country

Because Michelle is set up with a NZ account, she should be able to easily access her NZ Bank’s online banking facility from Australia. There are a couple of ways she can send money from Australia to her New Zealand account, the two most common are via International Money Order (Western Union) or via an Australian banking institution. We will make an assumption that Michelle isn’t going to be able to pay her card off in one go and subsequently will be looking to go for the cheapest option.

International Money Order

This can be done through an Australia Post outlet and the money is transferred through the Western Union wire service. It costs approx. $30 to send $1,000 to a New Zealand Western Union outlet or New Zealand bank account.

Done though the bank

The potentially ideal way for Michelle to pay off her NZ credit card from Australia is to open a new account with an Australian bank and use their online banking facility to pay her NZ credit card directly.
It’s better for her to use an online banking facility because it’s less expensive than going in person to a bank branch to send the cash overseas.

Fees are as follows:

CBA: $22.

ANZ: No fee via online banking.

NAB: $22 / $35 if done over the counter.

Westpac: $20 / $32 if done over the counter.

Travel money card comparison