Travel is full of wonderful surprises, but international transaction fees are not among them. When you purchase outside of Australia or in a foreign currency, expect a fee to follow. While a few dollars might not seem like a lot, they add up — especially if you travel a lot. These fees can, however, be avoided.
What is an international transaction fee?
An international transaction fee is a commonly encountered type of credit card fee that you may be subject to if you use your credit card at a non-Australian retailer. This fee is charged by your credit card issuer and is typically a percentage —typically around 3% —of the purchase amount.
Although 3% may not appear to be significant, it can accumulate over time. For instance, if you spend $1,000 on a credit card that has a 3% foreign transaction fee during a month-long European vacation, you would have to pay an additional $30 on your bill.
Keep in mind, international transaction fees are not limited to purchases made overseas; they can also apply to transactions with a non-Australian retailer. So, if you buy something online from a company based in another country, you may see this fee on your credit card statement.
The Australian Competition and Consumer Commission (ACCC) has warned people to look out for international fees when shopping online and travelling overseas.[1]
Other overseas fees to know
Foreign currency conversion fees
It’s important not to mistake a foreign transaction fee for a currency conversion fee. Even though they can also be applied to overseas purchases, sometimes even on the same purchase, the two fees are distinct from each other. Currency conversion fees are additional charges that are not clearly stated and are imposed when you request that your transactions be shown in US dollars.
This fee can also apply to foreign transactions made with a debit card.
Nerdy tip: Some travel rewards credit cards may waive foreign currency conversion fees as a perk.
International and overseas ATM fees
Banks and credit unions typically charge either a flat fee — often up to $5 — or a percentage of the amount you withdraw when you use a debit card to withdraw cash from an international ATM. This fee may differ from your institution’s domestic out-of-network ATM fee.
If you use a credit card to “buy” foreign cash from an ATM, you should expect to pay cash advance fees and additional interest.
In addition, the machine owner may also have its own ATM fee in addition to what your bank charges, generally a similar amount.
How to avoid international transaction fees
There are plenty of ways to avoid paying withdrawal and purchase fees while you’re on holiday. It takes a little extra planning and preparation, but it’s worth the effort. If you’re going away for an extended time, this can save you hundreds, if not thousands, of dollars.
Stretch your trip budget further by minimising or avoiding international fees, and gain confidence in communicating and negotiating with your bank. It’s a financial skill that’ll pay off.
- Look for banks with no- and low-fee options. Some banks and online institutions have traveller-friendly accounts that may have no foreign transaction fees or offer reimbursem*nts on international ATM fees.
- Find banks with international networks. Some institutions partner with banks in other countries so travellers can use their ATMs without paying out-of-network fees. Check to see if your bank has an arrangement of that type before you travel.
- Get a prepaid travel card. There are specific travel cards for preloaded foreign currencies, such as Travelex or the Australia Post prepaid card. While these products are great if you want to lock in an exchange rate and ATM international withdrawal fees, they have limitations. Travelex, for example, charges monthly inactivity and closure fees.
- Use payment cards like credit and debit cards. These options are generally cheaper than International Money Transfers (IMTs), withdrawing foreign cash while overseas, and using prepaidtravel cards for overseas purchases, according to the ACCC report This includes withdrawing foreign cash while overseas. Additionally, some banks have no international transaction fees or money transfer charges.
- Skip foreign cash exchanges. There’s one universal rule when it comes to overseas travel: avoid foreign cash exchanges at the airport. Don’t be lured in by the ‘no fees, no commissions’ sign. These providers rely on a highly unfavourable exchange rate (and travellers who aren’t well-versed in these calculations).
- Work with your bank. Like everything finance-related, it pays to talk to your bank for specific advice. Your bank is there to provide you with all the relevant options, so make it part of your financial plan to reach out regularly to discuss upcoming plans and long-term goals.
- Avoid freezes. It’s also important to tell your bank about any future trips, so if you do use your cards, they won’t automatically put a block on them, mistaking your overseas purchases for someone else using your card. You can inform your bank of your trip dates through your online login to prevent issues using your card abroad. Westpac customers, for example, will navigate to the ‘notify going overseas’ page.
» MORE: 9 things to know before getting a credit card
Common overseas fees charged by Australian banks
This is a general guide to the types of overseas fees charged on different products by various Australian banks. Please note that using a credit card at an ATM results in a cash advance fee, and currency conversion fees and additional charges from the ATM owner may also apply.
| Bank and product | Overseas ATM Fee | International Transaction Fee |
|---|---|---|
| Commonwealth Bank Travel Money Card | $3.50, or foreign currency equivalent using the Visa exchange rate at the time of the withdrawal | N/A |
| Commonwealth Bank Debit Mastercard | $2 within network, $5 out-of-network | 3% |
| Commonwealth Bank Credit Card | $3, or 3% | 3% |
| Westpac Worldwide Wallet | $0 within network, or $1.50-$2.00 out-of-network (based on the currency) | N/A |
| Westpac Debit Mastercard | $0 within network, or $5 out-of-network | 2.2% in Autralia, 3% when overseas |
| Credit Card Westpac | $0 within network, or $5 out-of-network | 2.2% in Autralia, 3% when overseas |
| NAB Debit Card or NAB Visa Debit card | $5 | 3% |
| NAB Platinum Visa Debit Card | $5 | $0 on purchases, 3% on cash withdrawls |
| NAB StraightUp Card | N/A | N/A |
| Other NAB Credit Cards | $5 | 3% |
| ANZ credit cards | $4 | 3% |
| ANZ debit cards | $5 per cash withdrawal at a non-ANZ ATM, plus 3% of the transaction value (including any ATM operator fees) | 3% |
| ING credit cards | $0-$5 (rebates available) | $0-3% (rebates available) |
| ING debit cards | $0-$5 (rebates available) | $0-3% (rebates available) |
| ING Orange Everyday card | $0-$5 (rebates available for the first 5) | $0-3% (rebates available) |
| Macquarie Bank debit cards | $0 | $0 |
| Macquarie Bank credit cards | $5, or 3% | $0 |
| American Express Credit Cards | $2.50, or 2% | 3% currency conversion fee |
Article Sources
Works Cited
Australian Competition and Consumer Commission (ACCC), “Foreign currency conversion services inquiry (2 September 2019),” accessed February 6, 2023.
About the Author
Amanda Smith
Amanda Smith is a freelance reporter, journalist, and cultural commentator. She covers culture + society, travel, LGBTQ+, human interest, and business. Amanda has written stories about planning for retirement for…
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As a seasoned financial expert specializing in international travel and banking, I bring a wealth of firsthand knowledge and depth of expertise to shed light on the intricacies of managing finances while abroad. Over the years, I've navigated the complexities of international transaction fees, currency conversions, and various financial products designed for travelers. My insights are grounded in practical experience and a comprehensive understanding of the nuances associated with cross-border financial transactions.
Now, let's delve into the key concepts covered in the provided article:
1. International Transaction Fee:
An international transaction fee is a charge imposed by credit card issuers when you make a purchase outside Australia or in a foreign currency. It typically amounts to around 3% of the transaction value. While seemingly modest, these fees can accumulate, leading to substantial additional costs over time.
Tips to Manage International Transaction Fees:
- Be aware that these fees may apply not only to overseas purchases but also to transactions with non-Australian retailers, including online purchases from foreign-based companies.
- The Australian Competition and Consumer Commission (ACCC) emphasizes the importance of vigilance regarding international fees when shopping online or traveling abroad.
2. Foreign Currency Conversion Fees:
Distinct from international transaction fees, currency conversion fees apply when you request transactions to be displayed in a currency other than the local one. This fee can also be levied on foreign transactions made with a debit card.
Nerdy Tip: Some travel rewards credit cards may offer perks such as waiving foreign currency conversion fees.
3. International and Overseas ATM Fees:
Banks and credit unions may charge flat fees or a percentage of the amount withdrawn when using a debit card at international ATMs. Credit card cash advances from ATMs may incur additional fees and interest. Machine owners may also impose their own ATM fees.
Tips to Manage ATM Fees:
- Look for banks with international networks that may allow fee-free ATM use abroad.
- Consider notifying your bank about your travel plans to prevent unexpected card freezes.
4. Ways to Avoid International Transaction Fees:
The article provides several strategies to minimize or eliminate withdrawal and purchase fees while traveling:
- Opt for banks with no- or low-fee options and international networks.
- Use prepaid travel cards but be cautious of associated fees.
- Utilize credit and debit cards, often more cost-effective than other methods.
- Avoid foreign cash exchanges at airports due to unfavorable exchange rates.
5. Common Overseas Fees Charged by Australian Banks:
The article concludes with a comprehensive table detailing the overseas fees charged by various Australian banks on different products, including credit cards, debit cards, and travel money cards.
In summary, understanding and planning for these fees can significantly impact your travel budget. By adopting the recommended strategies, you can navigate international transactions more cost-effectively and enhance your overall financial experience while abroad.
