Australia is renowned as a nation of travellers, with the Australian Bureau of Statistics reporting that over 7.1 million overseas journeys were made by Australian residents in 2010. But while we undoubtedly love exploring other countries, a downside to overseas travel can be the unexpected costs, particularly in the form of credit card fees.
These charges may appear on your credit card bill as an “Overseas Transaction Fee” or a “Currency Conversion Fee”, and occur when a bank has to convert your Australian dollars into foreign currency during an international transaction. New research by RateCity shows that these additional costs can stack up, with credit card fees adding more than $330 million to our travel expenses each year.
For instance, with the average Aussie making four ATM withdrawals while overseas, and each trip to the cash machine costing an average of $5, RateCity estimates the simple act of withdrawing money costs us $142 million in access fees annually.
Furthermore, RateCity’s analysis suggests we typically spend $1000 on credit cards during our travels, with banks charging an average foreign currency fee of 2.70 percent (costing you $27 per $1000). Over the course of a year, this means we pay $191.7 million in currency conversion fees for our international credit card purchases. What’s more, our credit card spending and the subsequent fees may be even higher than this estimate, with a recent study by Visa showing that Australians are the world’s biggest travel spenders, splashing out an average of over US$3600 on their last overseas trip.
No matter what you spend, it’s obvious that when using a credit card abroad, the fees payable can end up blowing out your post-trip credit card bill. However, the good news is there are some cards which charge less than the estimated average for accessing funds overseas, and even some that charge nothing at all. For instance, GE Money’s 28 Degree MasterCard has no fees for currency conversion, international transactions, or overseas cash withdrawals. This could save you up to $50 in fees per trip, a figure which takes on more importance if you travel multiple times through the year.
So before you book your next escape, it’s worth finding out just what charges apply when using your credit card overseas and comparing credit cards to ensure you have the best fit for your travel plans. If the sums don’t add up, it might be time to research a lower cost card and save on unwanted costs after your trip.
Credit and debit cards with zero currency conversion / ATM fees
28 Degrees MasterCard
Maritime Mining & Power
Hume Building Society
All Purpose S10