Thanks to credit cards and an ever-increasing range of travel money cards, it’s now easier than ever to access your money overseas. But many of these products – including the majority of travel money cards – do not represent good value. Poor exchange rates, oversees transaction charges and hidden fees can add up to hundreds of dollars per trip. So, how can you minimise these fees and access your money overseas for the lowest possible cost?
2 years ago I traveled around the world. I took a couple of credit cards with me along with a Qantas cash card and a debit card, as well as some cash. I mainly utilized funds from my credit cards during the trip. When I returned to Australia I found that several hundreds dollars had been lost in ATM fees, exchange rates and other bank fees.
So my question is, what is the most cost effective way to get access to your funds when overseas?
The key is to use debit and credit cards that don’t charge any fees for overseas purchases.
The debit card that comes with the free Citibank Plus transaction account is hugely popular as a means of accessing foreign cash. The card allows you to withdraw your own money from overseas ATMs with no ATM, foreign currency or any other fees. The currency is simply converted from Australian dollars – at a competitive exchange rate – at the time of the transaction.
The Citibank debit card is a good option – no fees for currency conversion, no transaction fees, no ATM fees (although in some cases an ATM fee may be levied by the provider, particularly if those machines are ‘independent). With Citibank you get close to the rate you see on xe.com. This card uses your own funds so it’s good for getting cash out.
Debit cards are great for accessing cash overseas, but credit cards are generally a better option for making purchases. Credit cards are also more suitable where a security or deposit is required, as is typically the case for hotel and car hire reservations.
There are several credit cards that offer great value overseas. One such card is the 28 Degrees MasterCard which comes with no annual fee and no international transaction fees.
Simples: Cash – Citibank Visa Debit. Credit – 28 degrees card. I have both and they sit in the draw when in Aus and get pulled out when I go OS. 100% fee free. Best rates you’ll get.
The 28 Degrees card does not earn any reward points. There are several forex fee-free cards that do award frequent flyer points, although they do have annual fees. The ANZ Rewards Travel Adventures card falls into this category, as do the Bankwest Platinum and World MasterCards.
Bankwest World worked well for our U.K. trip recently. Fair exchange rates and 0.66 points meant that we earned more than a Qantas point per pound with no ugly 3% to 8% set of exchange conversion rate fees.
The Coles Rewards MasterCard earns 2 Flybuys points per dollar (equivalent to almost 1 Velocity point) and does not charge forex fees. Its annual fee is only $89.
From 1 July, the Commonwealth Bank Platinum and Diamond cards will also stop charging international transaction fees on Amex purchases, with the Diamond card earning up to 1.2 Qantas points per dollar on overseas spend.
How do you minimise fees when accessing and spending your money overseas? Join the discussion HERE.