Using your credit card overseas: What to watch for

Credit cards may be a convenient way to pay for things domestically, but using a credit card overseas can come with extra costs that aren’t always obvious. From international transaction fees to exchange rate differences, those small charges can add up to some hefty charges on top of your card balance if you’re not sure how they work.

Before you swipe or tap your credit card at an overseas terminal or withdraw cash from an ATM, here’s what you need to know.

What’s an international transaction fee?

An international transaction fee will show up as an additional charge on your credit card statement following an overseas transaction. It’s also called a foreign currency conversion fee or forex fee and is charged by your card issuer for purchases made or processed outside Australia in a different currency.

You don’t even need to have travelled yet for this fee to apply. For example, booking accommodation online for another country, buying tickets to tourist attractions from a foreign provider, or even paying for visas on government websites can trigger these additional fees.

The average international transaction fee on Australian credit cards is around 3% of the transaction value. If you bought something worth $500, you’d pay $15 in fees. Spend $3,000 total, and you’re looking at $90 just in foreign transaction fees.

What you should look for in a credit card for overseas travel

If you’re planning to use a credit card overseas, the right features can make a noticeable difference. There’s no single ‘best’ credit card for overseas travel, as different cards offer different benefits for travellers. What it comes down to is what you value when travelling, such as lower foreign transaction fees, travel insurance, lounge access, support for multiple currencies and easy acceptance by merchants.

When comparing credit card options, here are some key features to think about:

Foreign transaction fees. Some Australian credit cards charge no foreign transaction fees, while others charge up to 3.5% per transaction. If you travel frequently or shop online from overseas retailers, check the rate before you apply and use the credit card for shopping.

Cash advance fees and rates. Using your credit card at an overseas ATM is treated as a cash advance. A higher rate applies with no interest-free period. There might be an extra cash advance fee to pay, too.

Travel insurance. Some credit cards include complimentary international travel insurance when you purchase flights with the card.

Rewards or cashback. Make sure any earnings outweigh the fees charged on transactions. For example, would the cashback earned on international flights be more than the foreign transaction fee?

Card network acceptance. Mastercard and Visa are accepted almost universally. Other card providers may not be accepted in regional destinations.

Smart tips for using your credit card overseas

These simple tips can help you stay in control of your spending while travelling:

Pay in local currency

When an overseas payment terminal gives you the choice between Australian dollars and local currency, always choose to pay in local currency. The AUD option, also known as dynamic currency conversion, uses exchange rates set by the merchant, which are often less favourable than your card provider’s rate.

Avoid using overseas ATMs

Withdrawing cash on a credit card at an overseas ATM is treated as a cash advance. A higher interest rate is charged straight away, with no interest-free period. You’ll also pay a cash advance fee on top of the interest. A travel money card or a no-fee debit card is a better option for withdrawing local currency from an ATM. If you need cash, you can always exchange your Australian dollars at foreign exchange changers in the destination country, instead.

Inform your card provider 

Many card issuers flag overseas transactions as suspicious and may temporarily block your card. Register your trip with your card provider in advance. With the MONEYME app, you can monitor transactions and manage your account from anywhere in the world.

Pay your balance on time

Travel spending adds up quickly. Returning home with a large balance means interest charges that can quickly wipe out any rewards earned during the trip, such as cashback on international flights.

Keep an eye on your statement and pay your balance in full by the due date each month.

Protect your card details

Using a digital wallet with biometric security can add an extra layer of protection while travelling.  It also reduces the need to carry a physical card.

Things that trip up Australian travellers 

Here are a few common things to watch for when using your credit card overseas or online:

Foreign transaction fees apply while you’re booking or buying items from overseas websites, even when you haven’t left the country.

Paying in AUD overseas can cost more due to dynamic currency conversion.

Currency exchange rates fluctuate daily. The rate applied to your transaction is set at the time it's processed, not when you pay. The AUD amount may differ from what you expected to pay.

Not all credit cards offer travel insurance. Check if your credit card covers you while travelling. If not, arrange cover before you leave.

The MONEYME Cashback Rewards Credit Card

The MONEYME Cashback Rewards Credit Card is designed for everyday spending. You earn 1% cashback on eligible everyday purchases like groceries, transport, and coffee, credited automatically to your account each month when you make your minimum repayment on time. There are no points to track and no redemption rules to navigate.

When it comes to overseas spending, a 3% foreign currency conversion fee applies to transactions in a foreign currency or processed outside of Australia. This is in line with the average Australian credit card fee. The MONEYME card is best reserved for Australian dollar purchases while travelling, rather than day-to-day local currency spending abroad.

Where the card shines for travellers:

Earning 1% cashback on everyday spending before and after your trip, groceries, transport, and regular purchases, where the fee doesn't apply.

Built-in mobile phone insurance up to $1,500 per year, useful when travelling with an expensive device. Terms and conditions apply. 

Purchase protection cover for accidental damage or theft of eligible purchases, up to $750 per year. Terms and conditions apply. 

Event ticket cover up to $1,200 per year if you can't attend due to illness or unexpected circumstances. Terms and conditions apply. 

100% digital. Add it to Apple Pay or Google Pay and manage everything through the MONEYME app, wherever you are.

For overseas spending in local currency, pairing the MONEYME card with a dedicated travel card or a no-fee debit card is a smart approach. You get 1% cashback on everyday spending at home, and lower fees when you're buying in foreign currency abroad, the best of both worlds.

Earn cashback on your everyday spending

Want to see what you could be eligible for? Check your rate and credit limit before you apply, with no impact on your credit score.

Find out more about the MONEYME Cashback Rewards Credit Card.