Save money and remove the hassle of organising the important parts of your next trip with travel credit cards. Avoid charge fees on currency conversion and overseas ATM withdrawals when travelling and receive complimentary travel insurance.
Many Australians travel overseas, for business as well as pleasure, and it is quite common for them to use their credit cards outside Australia. If you, like many others, are looking for the ideal credit card to use overseas, compare your options and decide which credit card features are most ideal to your travelling needs. Travel credit cards can provide complimentary travel insurance, no foreign currency conversion fees and no ATM withdrawal fees.
Refer to our guide below for the factors you’ll need to consider when selecting the right credit card for you.
Bankwest Credit Card with no foreign transaction fees
With the Bankwest Qantas Platinum, earn bonus points of up to 8,000 with a low balance transfer rate.
- $160 p.a. annual fee
- 20.49% 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
Comparison of $0 Foreign Transaction Fee Credit Cards
Credit Cards with Complimentary Overseas Travel Insurance
How to compare the credit cards for overseas travel
There’s no clear-cut answer as to what the right overseas credit card is – but you can find out by following a short checklist of the most common features and fees to find one that’ll suit you.
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.
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. Credit card providers require that you pay a fee for this process, and this foreign transaction fee can vary in between two to three percent of the transaction amount. Certain credit card providers don’t charge this fee for transactions made in Australian dollars. This is usually in the range of 2 – 3% of the value of each transaction, but each card provider will set their own fee amount.
- ATM withdrawal fees. In most cases, using a credit card to withdraw cash from an ATM within Australia requires that you pay some kind of fee, and this is no different when you use your credit card overseas. Credit card providers can charge this fee as a percentage of the withdrawal amount or a fixed amount, and since this fee can vary from provider to provider, it definitely requires your attention.
- ATM owner fees. Your credit card provider does not set this fee, so just how much you’ll end up paying depends on the ATM you use. Many Australian credit card providers have partner ATMs overseas, which you can use without paying this particular fee, so it makes sense to find out about any given card provider’s partner ATM networks in countries you frequent most.
Look below to see how these fees can add up over the course of a few days shopping overseas. Over the course of a few short days this person racked up almost $35 in international transaction and ATM withdrawal fees.
Screen capture from Netbank after a recent trip to Hong Kong
Remember to factor in your annual fee into this. A card which will save you a couple of hundred dollars overseas might not be such great value if the annual fee is many times more than this.
Some credit cards come with complimentary insurance covers, which include purchase covers as well as travel insurances. Complimentary insurances like purchase cover insurance and extended warranty insurance provide cover for purchases you make overseas. Transit accident insurance and international travel insurance can help you deal with different kinds of travel related eventualities if you use such cards to book travel tickets. These insurance options usually come with eligibility requirements and terms and conditions, so make sure to consider these before applying.
If a credit card comes with travel insurances it also may have a range of other policies. The benefits of a platinum credit card can also include cover incase you break or lose an item, extended guarantees and more.
If you plan to keep balances rolling in your account from one month to the next, you may wish to consider a no-frills card. This is because cards that offer extras like complimentary insurances and reward points tend to charge higher interest rates to make up for their offerings, and if you don’t pay your balance off in full with such a card, you could end up paying a tidy sum as interest. You should pay particular attention to both purchases and cash advances. Little known transactions include using your credit card to buy foreign currency, at home or overseas, or gambling using your credit card. If you’re going to use your card when you get back home this is even more important. Make sure you know what is and isn’t counted as a cash advance.
A credit card that comes linked to a rewards program enables you to earn points as per your spending and, depending on the card you use, you get different ways to redeem your accumulated points. While some offer cash rewards, others enable you to redeem your points for flight tickets, travel vouchers, and store vouchers. Some come linked to frequent flyer programs, and some others give you the ability to transfer your reward points to your frequent flyer program account. If you’re considering getting a rewards credit card, find out if it offers reward points on overseas purchases.
What are your priorities?
Given the varied features you can find in credit cards that you can use overseas, picking the right one boils down to personal presences, so it’s important that you get your priorities right at the very onset. For instance, if you’re planning to keep balances in your account rolling over from one billing cycle to the next, getting a low rate credit card might be in your interest. On the other hand, if you’re confident of paying your balances in full every month, you can make use of the many benefits offered by a typical premium or platinum card.
Try to establish your spending pattern in advance, and if you see yourself using ATMs to withdraw money when travelling overseas, your priority should be to look for a card that charges low international ATM fees. If you plan to use the card primarily to pay for purchases, you would be better off in looking for a card that attracts low or no foreign transaction fees.
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 off 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?
- Use anywhere, anytime. If you have a commonly accepted MasterCard or Visa credit card you can use it at millions of merchants around the world, including for purchases online and over the phone.
- Cash advances. If you, for any reason, find yourself in urgent need of money when travelling overseas, you can take heart in knowing that access to your funds is possibly only as far as the next ATM.
- Travel rewards. Frequent flyers can benefit by getting credit cards linked to frequent flyer programs, given that their spending would translate into miles. Certain cards offer travel rewards in the form of holidays and hotel vouchers.
- Fees. The fees you end up paying for foreign transactions and using ATMs when overseas can add up over time, and this is noticeable drawback when it comes to using credit cards overseas.
- 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.
As you’ve probably gathered by now, the ideal credit card you can use overseas is one that suits your requirements, and given the large number of options on offer, it’s ideal that you take some time to compare a few.Back to top
Frequently asked questions
How much would I have to pay as account keeping fees?
If you’re looking for a card that does not charge any ongoing account keeping fees, you get to choose from several basic no-frills cards. Cards with features like access to concierge services, complimentary insurances covers, and linked reward programs tend to charge noticeably higher fees.
Do such credit cards offer interest free days?
Most such credit cards give cardholders the ability to make use of different number of interest free days on purchases, which typically vary in between 44 and 55 days (though they can be more or less). To make use of these interest free days, you have to pay your account’s outstanding balance in full each month.
Do any such cards come with interest rate offers?
Yes. Some such cards come with introductory interest rate offers, which can apply on balance transfer and purchases. These cards charge low or no interest on balance transfers and/or purchases, and these offers can stay in place for six to 12 months.
Is there any way to find out in which countries I can use a given card?
One easy way to find out if the card you wish to apply for finds acceptance in the country you wish to travel to is to visit the website of the payment system that supports the card, which can be Visa or MasterCard.