Find out how to get the most out of your money overseas with an international credit card.
With international travel becoming more and more popular, there has been an increase in international credit cards. International credit cards can be used all around the world when you are travelling and have many features and benefits that regular credit cards don’t have. International credit cards understand how you use your money when travelling and can even reward you for travelling.
It’s important to note that you can use most credit cards overseas, it’s about finding the credit card that is cheapest for you to use.
Compare international credit cards
What is considered an international card?
An international credit card is a credit card that can be used all over the world in various locations when you are travelling. International credit cards can have higher fees than regular credit cards but some of these fees may be avoided. Some of the more popular international credit cards have no currency conversion fees, allow you to earn extra points for reward programs when overseas and they often offer complimentary travel insurance too. A good international credit card can help you save money when you are travelling.
How do they work?
International credit cards work like regular credit cards work, except they are cheaper to use when you’re outside of Australia relative to the rest of the market. You can use money from your financial institution to make purchases overseas and then you must pay this money back. You may also be charged interest on purchases and cash advances. This is why it’s important to repay your balance during the interest free period or as quickly as you can. Alternatively, with some international credit cards you can preload your own money onto your card as well, but the cash advance fee still applies. Some banks won’t charge you an ATM fee, but most will so it’s important to read the fine print.
What are the types of international cards on the market?
Platinum credit cards
Platinum credit cards offer wide range of perks and benefits. They have a lot more features than regular credit cards and they provide you with a high level of service, even when you are overseas. With platinum credit cards, you pay a high annual fee and this covers the additional features. They often offer reward programs and complimentary travel insurance.
Reward credit cards
Reward credit cards are linked to a reward program or a frequent flyer programs. This program may be with the credit card company or with other programs such as Qantas Frequent Flyer and Virgin’s Velocity. Overseas purchases tend to be worth more points than purchases made in Australia. You can use these points when you are travelling on flights and upgrades, or you can use the points to reward yourself with a gift. International credit cards reward you for spending overseas.
Business credit cards
Many businesses are now going international and business travel is increasing. There are business credit cards that can be used internationally for business purchases and expenses. This will help those overseas separate personal and business expenses and track spending.
How to compare credit cards that are suitable for overseas use
- Fees. With international credit cards, fees can be avoided if you compare carefully. The main fee to look out for is the currency conversion fee: these are the fees for converting your currency into the desired currency. Make sure you compare all the fees and look for a credit card with zero or low fees.
- Exchange rates. While there shouldn’t be much emphasis on this comparison point, it’s important to at least have a look at the exchange rates. This way, you’ll know around how much your transaction will cost in AUD.
- Rates. The interest rates are also important to compare when selecting an international credit card. Compare the interest rate on purchases and interest rate on cash advances to find a credit card with the most competitive rates.
- Reward programs. Many international credit cards are linked to different reward programs. Compare credit cards and look for one with a reward program that has what you want. There are many different reward programs available and different point reward systems so make sure you compare all the options. You could even be eligible for a free flight or upgrade, enhancing your travel experience.
- Complimentary travel insurance. Travel insurance is very important when you are travelling but it is another additional cost. Fortunately, some international credit cards offer complimentary travel insurance to help you save money and protect yourself overseas. Search and compare credit cards to see if they offer free travel insurance.
- Mastercard, Visa or American Express. Depending on where you are travelling, some credit cards may be more appropriate than others. Compare how widely accepted the credit card is and if there are any surcharges involved.
Pros and cons
- Be rewarded for travelling
Using an international credit card when overseas can reward you with points to use for reward programs or frequent flyer programs. Just by making purchases you can get freebies and gifts.
- Earn extra points
In addition to using your card and being rewarded for international purchases, you can also earn more points than from regular domestic purchases. Most international credit cards will give you more points for international purchases.
International credit cards are very secure. If you lose your card overseas, simply call the bank and they will block your card. Your card will also be signature and PIN protected.
- High interest rate on cash advances
International credit cards do have a relatively high rate for cash advances. In some cases you may be paying over 20% p.a. on cash advances so it’s wise to avoid this where possible.
Things to consider before applying for an international card
There can often be hidden costs with international credit cards so it’s important to make yourself aware of all the fees you may be charged. The most common hidden fees include: ATM withdrawal fees, exchange fees and international transaction fees. In some cases these fees can be avoided so it’s crucial you do your research and compare.
h3>Frequently asked questions
Do I need to let my financial lender know when I am going overseas?
It is a good idea to let your lender know you are going overseas and you will be using your card. This is so they can monitor the use of any other accounts or cards you have while you are away.
Can I rely solely on an international travel credit card overseas?
It’s recommended you have a combination of sources of finances with you such as your credit card, a debit card and cash just to be safe.
What banks offer international credit cards?
Majority of major banks do offer their own version of international credit cards for your selection.