Travelling overseas? Hidden fees & charges could be the end of your budget

Travelling overseas? Hidden fees & charges could be the end of your budget

Looking across the water for your next travel destination? You’re not alone.

New research from Roy Morgan’s State of the Nation Report on Travel shows that nearly 8-in-10 Australians would like to take a holiday in the next 12 months.

Research shows the number of Australians looking to travel domestically is down 5 percentage points since 2001/02, whilst almost half of Australians are now looking to get their travel fix overseas, up 7.5 percentage points since 2001/02.

The consumer landscape has changed…

The proliferation of online comparison and booking sites have empowered consumers to compare flight and accommodation rates and find great deals, at the best times, for a range of overseas destinations.

On the surface, it may seem you get more ‘bang for your buck’ with a trip abroad, but the potential hidden fees and charges you accumulate when spending money in a foreign country could end your budget.

Credit cards; friend or foe?

If you’re a reliable and disciplined spender, a travel credit card might be the perfect travel partner for you.

ratecity-travel-overseas-credit-cards

However, if you are not a disciplined spender, struggle to pay bills on time, and use your card without thinking each purchase through, you could be in for ‘bill shock’ when you return home.

There are some clear positives to travel credit cards, and these include the ability to track spending, special offers and discounts such as free travel insurance or discounted entertainment, and even a level of protection cash doesn’t have. For instance, if you lose a credit card or it’s stolen, it can be cancelled and replaced. With cash, when it’s gone, it’s gone for good.

Credit cards may come with fees, and if you’re overseas at the time, replacement cards can get expensive, costing as much as $200 USD to replace. 

However those protections could provide a reason to consider a card over carrying cash instead. 

Let’s compare…

To show you these fees and charges in more detail, we’ve compared a range of credit cards that can be used when travelling to a foreign country with low interest rates or no/low overseas fees.

Credit cards with low interest rates/no overseas transaction fees

Credit card

Fees & min. credit

Interest rate

Overseas charges

Macquarie Bank – Platinum Card

Annual Fee: $99 for the 1st year, then $199/year
Min Credit: $6000

20.7%
 (up to 55 days Interest Free*)

Cash advance: 20.7% interest + $5 OR 3% currency conversion fee (whichever is greater)
Purchases: 20.7% p.a.
Replacement card: $200 overseas delivery – subject to approval

Westpac – Westpac Lite Card

Monthly Fee: $9
Min Credit: $500

9.9%
(up to 45 Days Interest Free*)

Cash Advance: NOT AVAILABLE
Purchases: 9.9%
Replacement Card: FREE Overseas Replacement Card

Flexigroup – SkyeCard

Annual Fee: $99
Min Credit: $1000

23.99%
(up to 90 days interest Free*)

Cash advance: 25.99% + $3 or 3% (whichever is greater)
Purchases: 23.99%
Replacement card: $20 – $200 (depending on where overseas you need the card delivered)

G&C Mutual – Low Rate Visa Credit Card

Annual Fee: $50
Min Credit: $1000

7.49%
(up to 50 Days Interest Free*)

Cash advance: 12.99% + $5 + 3% currency conversion fee
Purchases: 8.99% + 3% currency conversion fee
Replacement card: $15 + $35 overseas delivery fee

Auswide Bank – Low Rate Visa Card

Annual Fee: $50 (free – under 25s)
Min Credit: $500

8.95%
(up to 55 Days Interest Free*)

Cash advance: 8.95% + 3% currency conversion fee
Purchases: 8.95% + 3% currency conversion fee
Replacement card: $10 – no overseas delivery fee.

MOVE Bank –
Low Rate Credit Card

Annual Fee: $59 (free – first year)
Min Credit: $1000

8.99%
(up to 45 Days Interest Free*)

Cash advance: 12.99% + $5 + 2% currency conversion fee
Purchases: 8.99% + 2% currency conversion fee
Replacement card: $200us – payable to visa

Notes: Data accurate as of 18th July 2019
*On purchases only, when you pay your balance (including fees) in full each month. 

Bank Accounts: the better option?

Enjoy shopping while you travel?

Not so disciplined when it comes to repaying your debts?

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A transaction account with no overseas fees may be a better option for you.

You will need to save your spending money before your trip, but it means you’re not creating a debt that you will need to repay upon your return.

Unlike credit cards, you’re only spending your money, so once you go through what you have, that’s it, and means you may want to budget accordingly. No one wants to end up on the other side of the world with nothing left to spend, even if those spends can be tracked online. 

Let’s compare…

To make your choice easier, here are three bank accounts with low/no transaction fees that could help you make the most of your money.

Bank account

Overseas fees & charges

Features & Benefits

HSBC – Everyday Global Account

$0 monthly fee
$0 transaction fees
$0 ATM fees*
$2.50 staff assisted telephone banking
0% overseas transaction charges.

– Send & receive different currencies
– VISA payWave, Apple Pay & Google Pay
– Online real time currency exchange rates
-Visa zero liability protection for unauthorised purchases

Citibank – Global Currency Account

$0 monthly fee
$0 transfer fees
No ATM fees when you withdraw in local currency.
2.5% foreign exchange fee when the money you withdraw is different to the currency of the account**

– Send & receive different currencies
– Free bottle of wine when using your Citibank card at a Dining program partner
– Online real time currency exchange rates
-Visa zero liability protection for unauthorised purchases

ING – Orange Everyday

$0 monthly fees
ATM fee rebate worldwide within 5 days of purchase.
$0 ING international transaction fees (2.5% international transaction fee is charged, but you will receive 100% rebate when you deposit $1000/month + make 5 card purchases, settled each month)

– VISA payWave, Apple Pay & Google Pay
– Verified by VISA protection
– Free phone support 24/7
– Free replacement card
– 100% rebate of ING international transaction fee  (2.5% of the amount of the international transaction if conditions of deposit & purchases are met)

*No HSBC ATM fees worldwide excluding Argentina and Mexico. The receiving bank or ATM may charge a fee.

Notes: Data accurate as of 18th July 2019

A few things to watch out for…

  • As with any financial product, the “best” option will vary based on your individual situation. Be sure to make the right decision for YOU by doing your research.
  • Look at the terms and conditions and the fees and charges available on the lender’s website before applying for an account or credit card.
  • ALWAYS bring two cards with you when travelling overseas, in case you lose one.
  • Some overseas banks or ATM providers might also charge you a processing fee. This fee may be charged in the foreign currency and is not counted as a bank fee.

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Learn more about credit cards

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 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.

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

How do I transfer money from my Commonwealth bank credit card to my bank account?

Your Commonwealth bank credit card may include a cash advance benefit, but you won't be able to transfer money to your bank account. 

You can, however, withdraw cash from your credit card at an ATM. You should remember that you have to pay a fee for such transactions, and you’ll be charged interest from the day you withdraw the cash. 

Unlike other credit card transactions, you don’t get an interest-free repayment period for cash advances. Also, you may not be able to access your full credit card limit for a cash advance.

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 money from a credit card

You can get money from a credit card, but generally it will cost you.

Withdrawing money from a credit card is called a cash advance, as it operates more as a loan than a simple cash withdrawal. Because it is a loan, you may be charged interest on your cash advance as soon as you make the withdrawal. Interest rates are also usually much higher for cash advances than standard credit card purchases.

In addition to the interest rate, you may also be charged a cash advance fee. This could be a flat rate, or a percentage of your total cash advance. If you are considering a cash advance, make sure to add up how much it will cost you before committing.

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 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.

What should I do if my ANZ credit card has expired?

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.

What to consider before transferring money from your credit card to your bank account in Citibank?

You can transfer money from a Citibank credit card to a bank account depending on the available limit of each. The process is known as a cash advance transaction, and Citibank should allow you to transfer some portion of the total credit limit.

Transferring funds from a credit card to a bank account is likely to attract additional charges, so please consider the following potential costs:

  • A cash advance fee, which is a per cent of the total transfer amount
  • A 2 per cent transaction fee when you transfer money from a Citibank credit card to a bank account
  • Cash advance interest rate applicable on the transfer amount without any interest-free period.

To learn more about such transfers, you can contact the bank via the online service desk, email, or by calling 13 CITI (13 24 84).

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.

How to get a free credit card

There's no such thing as a free lunch. All credit cards come with associated costs when used to make purchases, even if it’s simply the cost of making repayments.

However, many lenders offer incentives for customers such as a $0 annual fee or 0 per cent interest on purchases during an introductory period. Additionally, paying off your balance in full during an interest-free period means you could only have to pay back the cost of purchases without interest. You could also be eligible for additional rewards such as cashback during that time, saving you more money.

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.

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.