Travel-friendly money moves for your 2020 adventures

There’s no better feeling than travelling to places unknown or relaxing on a tropical beach holiday. But the last thing you want is to come home to unexpected debt from your travel spending.

It’s easy to rack up overseas costs, including foreign ATM fees and currency conversion fees, when you’re living in the moment. However, if you can put in a little time and planning before your trip, you could save big.

There are a few ways to keep overseas costs down, including:

  • Travel money cards

Travel money cards are preloaded with foreign currency before you travel. You can lock in an exchange rate, load multiple currencies onto a single card and avoid some transaction fees, like currency conversion fees.

These can be purchased at Australia Post. Keep an eye on exchange rates in the lead up to your travels so you can try to lock in exchange rates when the Australian dollar is buying the most.

  • Overseas-friendly bank accounts

If you’re not interested in loading your money onto a prepaid card, you could consider opening an overseas-friendly bank account. There are a range of bank accounts in Australia that don’t charge foreign transaction fees.

Bank accounts with no foreign transaction fees:

Bank Account About
ING Orange Everyday Shop online and overseas and you pay no ING international transaction fees, when you deposit $1,000 or more per month and make 5+ card purchases that are settled (not pending) each month.
HSBC Everyday Global Account Buy, hold and spend up to 10 currencies (including AUD). No fees for withdrawing cash overseas and no foreign transaction fees.
Citi Global Currency Account Buy, hold and spend up to 10 currencies (including AUD). Pay $0 Citibank fees for any overseas ATM or in-store transactions when the currency you are withdrawing is the same currency of your account. Where the currency you are withdrawing is different to the currency of your account, a 2.5% ATM foreign exchange fee will apply.
UBank] Ultra No ATM withdrawal and foreign exchange fees overseas or for online purchases with overseas merchants.
Macquarie Bank Transaction Account No international purchase fees when you shop instore or online overseas. No foreign ATM fees. Access to Macquarie Mastercard FX exchange rates. Travel Mode feature available in app.

Note: data accurate as of 17 December

Keep in mind, an ATM may charge you a foreign ATM fee. Ensure you’ve read through the bank account terms and conditions for a breakdown of all fees and costs before applying.

  • Overseas-friendly credit cards

If you prefer to whip out the plastic when in holiday-mode, credit cards that charge zero foreign transaction fees may be better suited to you.

Credit cards with no foreign transaction fees:

Bank Credit card Rate
Westpac Lite Card

9.90%

Bankwest Zero Platinum Mastercard

17.99%

Macquarie Bank Platinum Card

20.70%

Latitude Financial 28 Degrees Global Platinum Mastercard

21.99%

FlexiGroup Skye Mastercard

23.99%

Note: data accurate as of 17 December

When choosing a credit card for your next holiday, consider looking for one that not only doesn’t charge foreign transaction fees, but also charges low ongoing and annual fees, or none at all.

Be aware that low fees can result in higher interest rates, which will leave a sting in the tail when you come home from your holiday. RateCity’s database shows the average credit card purchase rate for November 2019 was 17.05 per cent.

You don’t want to go into debt or make higher card repayments when you return. Do your research and look for a credit card which could balance low fees and low rates for your overseas trip.

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Learn more about credit cards

Current Annual Fees

These are the current annual fees on your existing credit card.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

How do credit cards work?

Think of credit cards as a short-term loan where you use the bank’s money to buy something up front and then pay for it later. Unlike a debit card which uses your own money to pay, a credit card essentially borrows the bank’s money to fund the purchase. When you apply for a credit card, the bank assesses your income and assigns you a credit limit based on what you can afford to pay back. At the end of each billing cycle, which is usually monthly, the bank will send you a statement showing the minimum amount you have to pay back, including any interest payable on the balance.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.

Where can I get a credit card?

Looking to get your first credit card? You might be confused as to exactly where to go to apply for one. Here’s where to go when you are ready to put in that application.

The bank: Your bank is a great place to start, provided that you have a good banking history. Since you already have a financial history, you have more chance of your application being approved.

Credit card provider: Another option is to apply for a credit card directly from the issuer, such as Visa, Mastercard or Amex. This will most likely be an online application, so do your research and apply for a suitable card for your circumstances.

Major retailers: Coles, Woolworths, Myer and David Jones all have credit cards available. But watch out for the interest rate and annual fees – these cards are designed to help you spend more in store.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.

What is a credit card?

A credit card is a payment method which lets you pay for goods and services without using your own money. It’s essentially a short-term loan which lets you borrow the bank’s money to pay for things which you can pay back – potentially with interest – at a later date. Credit cards can also be used to withdraw money from an ATM, which is known as a cash advance. Because you’re borrowing money from a bank, credit cards charge you interest on the money you use (unless you repay the entire debt during the interest-free period). When you apply for a credit card, the bank gives you a credit limit which sets the maximum amount you can borrow using your card. Credit cards are one of the most popular methods of payments and can be a convenient way of paying for goods and services in store, online and all around the globe.

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.