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.

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.

How to increase my Commonwealth credit card limit?

Commonwealth Bank credit cards are extremely popular in Australia for everyday purchases and big ticket items alikers. A number of the card’s functions can be customised, depending on your needs and desires. If you wish to increase your Commonwealth credit card limit using the CommBank, you can usually do so on the app or via NetBank.

In the CommBank app, tap on the ‘Cards’ icon and choose your credit card. Then, click on ‘Credit Limit’ and select the ‘Increasing your limit’ option. If you don’t have the CommBank app, you can also increase your Commonwealth Bank credit card limit through NetBank. Simply log on and go to Settings, then click on ‘Product Requests’ and then choose ‘Credit Card Limit Changes’. 

Once the bank has received your application, they will review your account and payment history. Based on this assessment, your application will either be approved or denied. If approved, your new limit will be applied to your card instantly. 

While increasing your credit card limit may be an easy process, it’s important to remember that you should only request limits that you can manage. A high limit increases the risk of having a larger debt, even with cards that provide low-interest rate options. So, it’s important to think carefully and seek advice from people you trust before increasing your Commonwealth Bank credit card limit.

How to increase your Qantas Premier credit card limit

When your income or spending habits change, you might wish to increase your credit card limit. The Qantas Premier credit card allows you to do this over the phone. You can contact Qantas Premier Card Support by calling on 1300 992 700. Unlike some other credit providers, Qantas doesn’t give you the option to increase your limit online.

Qantas will only accept your application if you have a good history of repayment and have not increased your credit or bought another credit product from Qantas in the past six months.

Before approving your Qantas Premier credit card limit increase, Qantas will perform a credit assessment on your current financial circumstances and ask why you would like to increase your credit limit.

To ensure that there are no bumps in your application process, you must provide accurate and recent information about your financial situation. You should also account for any future changes you’re anticipating which could hinder your ability to repay the loan.

Once the assessment is complete, Qantas will either approve or deny your application. If they approve it, you will need to sign a credit limit increase agreement - and you can request a written copy of the credit assessment. However, if your application is rejected, Qantas can opt not to provide a copy of the assessment.

What is the CUA credit card increase limit process?

A credit limit is pre-assigned based on factors like your income, expenses, and debt by the card-issuing company. It varies from time to time based on credit utilisation and changes to your circumstances.

If your income has increased or your liabilities have reduced, you can request for an increase of your CUA credit card limit. You can lodge the request via online banking on the website, or by visiting the closest branch, or by downloading the application form and mailing it. While making the application, you may need to provide information about your income, employment status, desired limit, and the reason for the increase. The card-issuing company will assess your request before approval.

Before you apply for an increase to the credit limit, ensure your bills are paid in full and you aren’t asking for a very steep enhancement.

What does Westpac credit card insurance cover?

If you own a Westpac credit card, one of the perks may be  free travel insurance. If you’re eligible, you may be covered if you get sick while travelling, have lost your luggage, have to cancel a trip or have an accident while you’re on the move.

Besides these standard inclusions, the Westpac credit card insurance policy may also cover you for hospital essentials, emergency dental treatment and alternative transport if your original plans go awry. It may also cover loss of income when you get back home after being sick  overseas and your pets’ boarding costs too.

If you have any queries, the Westpac credit card insurance contact number is 1800 091 710. You can submit a claim online.

 

How can I increase my credit card limit on my American Express card?

If you want to increase the credit limit on your American Express (AMEX) credit card, you will need to apply through the AMEX Online Services, or by calling the number on the back of your card. You may need to share personal information that the bank can use to assess whether the requested limit is suitable for you and your current financial status. Once your application is approved, your new limit will be ready for use within an hour.

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.

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 should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

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.