Avoid currency conversion and overseas ATM fees and receive complimentary travel insurance with a credit card on your next holiday.
There are many ways for Australians to take their cash on holiday, including credit cards designed for overseas use. These credit cards generally charge low or no foreign transaction fees, no currency conversion fees and no ATM withdrawal fees while offering travel-centric perks such as complimentary travel insurance, rewards programs and airline lounge passes. Unfortunately, these cards aren’t entirely cost-free though. As the best* credit card for you to use overseas will depend largely on where you’re travelling, how you plan on spending and your financial situation, you can use this guide to compare your options and find the right card for you.
Bankwest Credit Card with no foreign transaction fees
With the Bankwest Zero Platinum, you pay no annual fee ever and also save on foreign transaction fees on purchases.
- $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
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 one best* credit card to take overseas, but the right option for you will depend on your holiday location, your spending habits and your financial circumstances. To help make your comparison easier, we’ve outlined some of the fees and features you can factor into your comparison to find the right card for 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.
Credit card 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. When this happens, you’re usually charged a fee between 2% and 3%. If you want to avoid this fee each time you make a transaction overseas, consider a credit card that doesn’t charge a foreign currency conversion fee.
- Interest rates. Similar to when you use a credit card in Australia, your purchases will be subject to an interest rate if you don’t pay your account balance in full. Depending on the card, this can sit between 11% and 20% p.a. If you think you might have trouble paying off your balance when you’re travelling, consider a credit card that offers 0% on purchases for a promotional period. Otherwise, if you always pay off your balance, consider a credit card that offers interest-free days.
- Annual fees. If you have a card that’s designed for overseas use and it comes with extra features, it’s likely that it could also come with a higher annual fee. Before you apply, make sure the value you get from the card’s features outweigh the cost. Some cards also come with no annual fees for a promotional period or for the life of the card, so you should also factor this into your comparison.
- ATM withdrawal fees. If you use your credit card to withdraw funds overseas, you might be charged a few different fees. Firstly, most credit cards charge a cash advance fee when you use your card for ATM withdrawals (whether you’re in Australia or overseas). As well as the cash advance fee, you’ll immediately attract the high cash advance interest rate. Secondly, many banks charge an overseas ATM withdrawal fee when using your card for this withdrawals outside of Australia. Thirdly, the local ATM provider might also charge a withdrawal fee. If you want to avoid this last fee, consider using a credit card that belongs to an ATM alliance.
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
If you’re travelling overseas, you’re going to have to organise international travel insurance. Using a credit card that offers complimentary insurance can help you save the time and money you’d otherwise spend on standalone cover. Depending on the card, the international travel insurance usually includes overseas medical insurance, transit accident insurance and travel delay insurance to name a few. The cover might also extend to your spouse or any dependent children travelling with you.
As well as travel insurance, some credit cards offer purchase security insurance and extended warranty so you can shop with peace of mind. Complimentary insurance is often a feature of platinum credit cards, so make sure the feature is worth the cost of the card before applying.
Using a rewards card or frequent flyer credit card is an easy way to pick up rewards points as you spend overseas. Depending on the card, you might be able to redeem these points for flights with a specific airline, accommodation with partner hotels, travel vouchers, cash back on your account or products from a rewards store. If your card is designed for overseas use, you might find that you can even earn more points on foreign purchases. Compare frequent flyer credit cards with no foreign transaction fees to earn points without paying an extra cost overseas.
Plan around your priorities.
As there are many different fees and features you should consider when comparing a credit card to take overseas, make sure you consider your travel plans and spending habits before you apply. 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 you’ll pay your balances in full every month, look for a card with interest-free days and the perks you can expect from a premium or platinum card. If you haven’t organised a debit card or prepaid travel card to use for withdrawing cash, make sure you know the cash advance fees and ATM withdrawal fees that will apply to your credit card. If you plan to use the card primarily to pay for purchases, start comparing cards that charge low or no foreign transaction fees. With this in mind, make sure you understand how you’ll be using your credit card overseas before you make your decision.
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?
- Global acceptance. If you’re using a MasterCard or Visa credit card, you’ll be able to use your credit card in millions of locations around the world. American Express and Diners Club cards are also accepted worldwide, though in fewer places than Visa or MasterCard.
- Travel perks. Credit cards designed for overseas use often come with travel-related benefits such as frequent flyer rewards programs, complimentary insurance and airline lounge passes.
- Security of credit. When you’re travelling overseas, it’s wise to have more than one way to access your cash. Even if you have a prepaid card or debit card organised for everyday spending, a credit card can be used as a back up and the security of credit could come in handy in an emergency situation.
- Fees. Depending on the card, using your credit card overseas can come with many costs. Make sure you understand exactly what you’ll pay when using your card for foreign transactions before you apply.
- 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.
- Temptation to spend. While a line of credit can provide you with peace of mind, it might also tempt you to spend money that you don’t really have. Remember that you’ll have to pay back everything you charge (plus interest in many cases).
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. For more tips, see our guide on how to use a credit card for your next holiday.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.