Take the right debit card overseas to save on international transaction fees
Record numbers of Australians are heading abroad. And finding the best way to take your money overseas can be a challenge.
There are a range of personal finance products that are geared towards international travel due to reduced or waived international transaction fees: credit cards, travel cards and debit cards all offer something different. You can find a comparison of travel friendly credit cards and travel cards by reading our travel money guide. The following article will examine which debit card is the best to use when you’re overseas
Debit Card for Spending Overseas
Receive 5% cashback on Visa payWave purchases with new Citibank Plus accounts opened before 28 Feb 2015. Plus enjoy free international money transfers from Australia to any account, anywhere in the world. No monthly fees, no ATM fee. Fee free Overseas ATM withdrawals.
- Get 5% cash back for a limited time
- Enjoy fee free ATM withdrawals
- Fee free everyday bank account
- Transfer money overseas for free
Travel debit card comparison
Rates last updated January 30th, 2015
Debit card, credit card or travel card?
There are a number of ways you can take your money overseas with you. You have the option of taking a credit card, travel money card, debit card or traveller’s cheques.
Usually a combination of the aforementioned products works best, but it’s not a hard and fast rule. For some, a travel money card to pay for their day to day spending and a credit card for emergencies is a safe option; while others are happy using just their Australian transaction account. The best way to take money overseas comes down to how comfortable you are paying additional fees and charges to access your money while you’re on holiday.
If you want to avoid paying extra to access your cash, a credit card, debit card with no foreign transaction fees is the way to go.
You can find a detailed comparison of all the options for taking your money overseas on this page. The following section of the article will briefly highlight some of the pros and cons of the different types of travel money you can take overseas with you.
|Travel Money Type||Pros||Cons|
It’s linked to your own account;
Unlike a credit card, these accounts mostly have no annual fees.
It’s linked to your own account;
Funds must be converted from Australian dollars to complete an overseas transaction – this will incur a fee with most cards.
They are widely accepted;
They give emergency access to cash.
Banks can block transaction if you have not notified them of your travel plans;
Currency conversion and ATM withdrawal fees can add up.
|Travel Money Card||
Allows you to load multiple currencies onto the card;
Comes with a backup card in case the first is lost or stolen.
There may be issue with card acceptance at some merchants;
It can take a number of days to load funds onto the card and there are reload fees in most cases.
|Traveller’s Cheques||They are a very secure form of travel money. Each cheque has a unique number and can be replaced if lost or stolen.||
They are bulky to carry around;
You will need to change the cheques to cash in order to use the funds.
What’s the best debit card to take overseas?
The word ‘best’ is a subjective term. For the sake of this article, the best debit card to take overseas is the debit card that costs least to transact in a foreign currency. And there are a number of debit cards on the market, but less than a handful allow you to spend overseas without charging a foreign currency conversion fee. We refer to these types of transaction accounts as ‘travel friendly debit cards’, or ‘travel friendly transaction accounts’.
What are the features of a travel debit card?
Transaction accounts with a debit card have a number of common features. You can use the debit card to access the money in your transaction account, shop online and you can make purchases over the counter. The thing that separates a ‘travel friendly transaction account’ from a ‘regular, everyday account’ is the currency conversion fee.
The best transaction accounts to take overseas will waive the currency conversion fee
Much like when you use your credit card to make a purchase in a currency other than Australian dollars, most transaction accounts will charge a fee when you make an international purchase. At the time of writing there is only one transaction account in Australian that does not charge a fee of 2-3% (industry average) when you carry out a transaction in a currency other than Australian dollars.
In addition to waiving the foreign currency conversion fee, the Citibank Plus Everyday Account also offers another handy feature in the form of fee free international money transfers to any account in the world.
The ING DIRECT Orange Everyday Transaction Account also deserves a mention. Although this account does charge international transaction fees when you make a purchase or cash transaction in a currency other than Australian dollars, the ING DIRECT debit card account does offer customers something back in the form of cash back on payWave purchases and free ATM transactions when you withdraw over $200 or more.
Debit cards & travel: John Arnott: ING DIRECT
To cut down on fees, look for your bank’s ATM alliance
The Orange Everyday Account’s fee free ATM withdrawal offer is a handy feature for travellers. When you’re abroad it’s common to withdraw large amounts of cash at a time. And there’s a real benefit knowing you can use any ATM for free. But what if you don’t have an Orange Everyday Account? Some banks have global ATM alliances where you can make ATM withdrawals for free.
Transaction account providers like Westpac, ANZ and the Commonwealth Bank have partner ATMs in a number of countries in Asia and Europe. For example, Westpac have an ATM alliance with Barclays Bank. Westpac cardholders can make free ATM withdrawals at all Barclays branded ATMs in the U.K., Spain and Portugal to name a few places; while the Commonwealth Bank has ATMs in Vietnam and throughout Asia.