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What Is an International Transaction Fee?

Rates and Fees verified correct on December 10th, 2016

You will notice that when you use your credit card abroad, you will be charged an international transaction fee.

This is applied to all purchases that you make on the card. It is basically charging you for using the card in another country. So just why are you charged an international transaction fee and what is it?

What is an international transaction fee and when is it charged?

International transaction fees are charged by banks to convert your funds into foreign currency. You will find that typically the cost for transactions vary. As a guide, transactions that are converted by

  • MasterCard - 2-3% of the value of the transaction
  • Visa - 2-3% of the value of the transaction.
  • American Express - 2-3% of the value of the transaction.

This may also include a 1% conversion fee too that is charged by MasterCard or Visa.

It is worth noting that if the transaction is paying in Australian dollars to an oversees merchant, the fee will be 2%.

If you are using an American Express card then the fee may be higher again.

You should always compare your different options. Work out whether you would prefer a Visa, MasterCard or American Express. Also think about what you will be using the card for.

Avoiding International Transaction Fees

Another way to avoid transaction fees is to avoid using cash advances. When you withdraw money from a credit card account, not only are you charged the transaction fee, but you are also charged a withdrawal fee too. If you do want to make a cash withdrawal then it is advisable to use a debit card instead.

Credit cards can be cheaper to use rather than travellers cheques, just as long as you use them properly. Compare your different options and see which companies are currently offering great card deals. You will find that some of the cards advertise no international fees. However, if you look closely at the terms and conditions, you will see that there are some fees associate with using the card overseas. Some of the transaction fees may be eliminated but there will still be some fees associated with using the card abroad.

Overall, there are various international transaction fees that you have to think about. Compare your options and avoid cash advances if you want to experience the lowest fees.
Comparison of No International Transaction Fee Credit Cards

Bankwest Zero Platinum MasterCard

International Credit Card with No Foreign Transaction Fees

Bankwest Zero Platinum Credit Card offers zero foreign transaction fees whether the transaction occurs in a foreign currency or Australian currency.

  • $0 p.a. annual fee
  • 17.99% p.a. on purchases
  • 2.99% p.a. for 9 months on balance transfers
  • Cash Advance Rate of 21.99% p.a.
  • Up to 55 days interest free

Consider Travel Debit Card Without International Transaction Fees

Rates last updated December 10th, 2016
$
$
months
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
St.George Complete Freedom Account
10% Cash back for online gaming purchases.
Waived account keeping fees when minimum deposit is met with no minimum balance.
0.00% 0.00% 0.00% $5 $1 / $1 Open More
Citibank Plus Everyday Account
Free international money transfers and free overseas Citibank ATM withdrawals.
0.00% 0.00% 0.00% $0 $0 / $0 More
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8 Responses to What Is an International Transaction Fee?

  1. Default Gravatar
    Heino | May 11, 2015

    Welcome.
    Sorry to bother you.
    Who can help me today, instant loan?
    Can you suggest where to turn.
    If possible, look forward to your reply.
    Sincerely H.Oja Estonia.

    Tere.
    Vabandage,et Teid tülitan.
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    Võimalusel ootan Teie vastust.
    Lugupidamisega H.Oja Eestist.

    • Staff
      Jonathan | May 12, 2015

      Hi Heino Oja, thanks for your inquiry!

      Please refer to the following link for personal loan options.

      Cheers,

      Jonathan

  2. Default Gravatar
    lesterch35z4zb@outlook.com | March 20, 2014

    I assume there is not GST?

    • Staff
      Jacob | March 20, 2014

      Hi, Chris.

      Thanks for your question.

      GST is an Australian tax and does not apply to international purchases.

      I hope this helps.

  3. Default Gravatar
    Claire | June 7, 2012

    If a purchase was made online to an overseas based company in AUD, is that treated as overseas transaction?

    • Staff
      Marc | March 27, 2013

      Hello Claire,
      thanks for the question.

      There is no foreign transaction fee. This applies for any purchases where a foreign currency is converted into Australian Dollars (which is more than likely what’s happened here), or for any purchase where the accepting company is based overseas.

      Cheers
      Marc.

    • Default Gravatar
      Chris | November 5, 2013

      Well, the article says “It is worth noting that if the transaction is paying in Australian dollars to an oversees merchant, the fee will be 2%”
      I’m confused. Will my NAB flybuy rewards charge these fee as well? it’s not mentioned on their website.

      Thanks a lot

    • Staff
      Jacob | November 6, 2013

      Hi Chris.

      Thanks for your question.

      You can find the currency conversion fee for NAB and other lenders listed on this page.

      I hope this helps.

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