Credit Card or Travel Card: Which Should You Use Overseas?

Credit Card or Travel Card: Which Should You Use Overseas?

When traveling overseas, it's easy to rack up credit card fees on international transactions.

For most people, a credit card is a handy back up in case of emergencies or unforseen circumstances. But which type of credit card is cheaper to use on overseas transactions?

In this article, we compare the fees of the most popular credit cards and travel credit cards and share our thoughts on which is the better card to use when overseas.


 

What will this article cover?

  1. Pros and Cons
  2. Credit Card: Fees and Charges
  3. Travel Credit Card: Fees and Charges
  4. Rewards and benefits for each card
  5. So which one is best?
  6. Who can apply?
  7. Security

 


 

Pros and Cons: Credit Cards

Pros Cons
Tick Favourable annual fees Cross No reward schemes offered with credit cards
Tick Affordable minimum credits Cross No travel insurance offered with the standard low rate credit cards and higher fees charged for the premium credit card
Tick Free additional cardholders Cross For some credit cards you have to be a permanent Australian resident
Tick Travel insurance offered with premium versions of credit cards offered  

 

Pros and Cons: Travel Credit Cards

Pros Cons
Tick Attractive reward schemes available through travel credit cards Cross High minimum credit for travel credit cards
Tick Low or zero international transaction fees Cross High annual fees
Tick Complimentary travel and/or medical insurance offered with a lot of cards Cross Usually a cost for any additional card holders
Tick Frequent flyer points to help you get discounted or free flights  Cross High minimum monthly salary requirement
  Cross For some travel credit cards you have to be a permanent Australian resident

 


 

Credit Card: Fees and Charges

 

Although credit cards can be really handy, and help make advance purchases that your debit card can’t quite stretch to, they do unfortunately have a lot more fees involved than debit cards. There are 7 main fees and charges involved with credit cards:

  1. Purchase Interest Rate
  2. Annual Fee
  3. Balance Transfer Interest Rate
  4. Cash Advance Interest rate and cash advance fee
  5. Late payment fee
  6. International Transaction fee 
  7. Emergency fee: Lost or stolen and needs replacement

 

We’ve put together a table below outlining all of the main fees for 5 of the most popular credit cards out there.

Credit Cards Purchase Interest Rate Annual Fee Balance Transfer Interest Rate Cash Advance Flat Fee & Interest Rate Late payment fee International Transaction fee  Emergency fee: Lost or stolen and needs replacement
Commonwealth Low Rate Credit Card* 13.24% p.a(up to 55 days interest free) $59 5.99% for 5 months with the cash advance rate applied as well thereafter $2.50 or 2% of the transaction amount;  21.24% p.a $20 >3% $20
ANZ Low Rate Credit Card* 12.49% p.a (up to 55 days interest free)0% for first 6 months if new ANZ customer $58 21.74% p.a 2% of the transaction amount; 21.74% p.a $20 3% Free
Westpac Low Rate Credit Card* 0% for first 6 months 13.49% afterwards(up to 55 days interest free) $59 Free for first year for existing Westpac customers 0% for first 6 months then 13.49% p.a $2.50 or 2% of transaction amount; 21.49% p.a $15 late payment fee 3% Free ($40 charge for a courier if overseas)
NAB Low Rate Credit Card* 13.99% p.a(up to 55 days interest free) $59 0% for first 18 months (3% BT rate applies) then reverts to cash advance rate $2.50 or 2% of transaction amount; 21.74% p.a $9 late payment fee 3% Free
Citibank Simplicity card 19.99% (up to 55 days interest free) No fee 0% for 15 months (1.5% BT rate) then reverts to 19.99% $5 cash advance fee overseas for withdrawals; 19.99% p.a No fee 3.4% Free

 

All figures were collected March 2017. Please be aware that some of these figures may reflect promotional offers by the bank at that time.

*Commonwealth, NAB, Westpac, and ANZ each have premium versions of their Low Rate credit cards which, although slightly higher fees, have complimentary travel and/or medical insurance.  


 

Travel Credit Card: Fees and Charges

Although a lot like credit cards, these cards often come with higher fees simply because they come with very attractive travel reward schemes in return. We’ve put together a table below showing you the main fees and charges involved.


 

Travel Credit Cards Purchase Interest Rate Annual Fee Balance Transfer Interest Rate Cash Advance Flat Fee & Interest Rate Late payment fee International Transaction fee  Additional Card Holder Fee
ANZ Rewards Travel Adventures Card 20.24% p.a (up to 55 days free interest) $225 ($170 annual account + $55 annual rewards fee) 21.74% p.a 2% cash advance fee will be charged unless as a withdrawal from an ATM operator overseas**; 21.74% p.a $20 Nil* $10 per cardholder + an additional annual rewards fee of $55 per cardholder 
Virgin Money Velocity High Flyer card 20.74% p.a (up to 44 days) $144 for 12 months, then $289 1.9% for 15 months, then 20.99% 2.7% of transaction amount (domestic) $5 per withdrawal (overseas) $10 then $10 per 7 days until paid 3.3% $44 for 12 months, then $89 p.a
28 Degrees 21.99% p.a (up to 55 days) None 21.99% p.a 3% or $4 (whichever is greater); 21.99%  p.a $20 Nil Nil
American Express Qantas Discovery 20.74% p.a (up to 44 days interest free) None 0% for first 12 months with 1% balance transfer fee $2.50 or 2% (whichever is greater); Not offered $30 3% Nil
American Express Explorer Credit card 20.74% p.a (up to 55 days interest free) $395 p.a 0% for first 12 months with 1% balance transfer fee $2.50 or 2% (whichever is greater); Not offered $30 3% Nil

All figures were collected in March 2017

*ANZ will also waive the cash advance fee if you use your ANZ Rewards Travel Adventures account to withdraw actual cash from a branch or ATM located overseas. A cash advance fee will apply to any other cash advances on your account
**ATM operators will often charge their own fees though, so be aware.


 

What are the rewards and benefits for the most popular credit cards and travel cards?

 

As a lot of credit and travel credit cards have higher fees than normal debit cards, they tend to offer attractive reward schemes for spending the money you do. In some cases, the amount of money they require from you is worth what you get back, for example, the American Express Explorer Travel Credit card. Do watch out for this though, and make sure that you are happy with the level of rewards you get for your outgoings. 


We’ve put together a table below summarising the rewards for the cards mentioned in this article. This should give you some idea of what you will get, but do carry out your own research before applying.

 

 

Credit Cards Rewards Travel Credit Cards Rewards
ANZ Low Rate Credit Card
  • Receive $100 back to your new ANZ Low Rate Credit Card within 2 months
  • Complimentary travel insurance on Platinum version of this card.
ANZ Travel Rewards Adventures Card To new customers only:
  • 1.5 points per $1 spent on eligible purchases 0.5  Points per $1 spent on eligible purchases Until 5 August 2017 receive 1.5 Reward Points per $1 spent on eligible purchases uncapped
  • Complimentary domestic flight offered when spend $500 in first 3 months
Commonwealth Low Rate Credit card
  • Complimentary travel insurance for first 3 months of Gold version of Commonwealth Low Rate Credit card
ANZ Travel Rewards Adventures Card
  • 30,000 rewards when you spend $3000 per month
  • 1 point per $1 spent on eligible purchases
  • Complimentary travel insurance when you pay for flights with virgin credit card
  • Complimentary $129 Virgin flight voucher offered annually
  • 2 complimentary single entry virgin Australia domestic lounge passes
Westpac Low Rate Credit card
  • Emergency travel assistance
28 degrees credit card
  • 24/7 complimentary concierge service
  • Shoppers benefit and repayments benefit cover
NAB Low Rate Credit card
  • Complimentary travel insurance on Platinum version of this card when used to make travel reservations
Amex Qantas Discovery Credit card
  • 5,000 bonus Qantas Points when you spend $750 on eligible purchases within your first 3 months of card approval
  • 2,500 bonus Qantas Points after your first card spend on selected Qantas products and services in Australia
Citibank Simplicity card
  • 5% cash back on all retail purchases (up to $1000 spend) within first 90 days
  • Purchase cover insurance
  • Citibank Dining Program
Amex Explorer Credit Card
  • 50,000 reward points given when you spend $1500 in first 3 months
  • 2 points per $1 spent on eligible purchases
  • $400 travel voucher awarded to additional cardholders

 

So which type of card should you use on overseas transactions?

 

 

Generally, you should only apply for a credit or travel credit card if you are confident in your ability to repay what is loaned, and you meet the requirements for monthly salary and minimum repayments.


If you are looking for a credit card to fund your travels, then in general, we would recommend a credit card such as the ANZ Low Rate Credit card, as they have lower fees attached. However, if you earn enough to afford the higher requirements requested by travel credit cards, such as the 28 degrees card, then you are able to reap the rewards schemes offered exclusively by these cards, which in some cases can be majorly beneficial to your travelling plans.


Taking into account every fee, pros and cons, reward and interest rates, we have put together a list of each card from cheapest to most expensive.

 

Credit Cards Travel Credit Cards
1. Westpac Low Rate Credit Card 1. American Express Qantas Discovery  Card
2. Citibank Simplicity Card 2. 28 Degrees Credit Card
3. ANZ Low Rate Credit Card 3. ANZ Rewards Travel Adventures Card
4. NAB Low Rate Credit Card 4. American Express Explorer Credit Card
5. Commonwealth Low Rate Credit Card 5. Virgin Velocity High Flyer Credit Card

 

Whatever your reason for applying for a credit or travel credit card, there is plenty of information online so we suggest doing your own research first before applying to make sure you get the right card for you.


 

Who can apply?

For all credit cards and travel credit cards, you will have to have a good credit score so the bank or provider can trust that you will repay the money they loan. For some, you will have to earn over a certain amount e.g. ANZ Rewards Travel Adventures card requires a minimum annual salary of $35,000 p.a, and Virgin Money Velocity High Flyer card requires a minimum of $75,000 p.a.

It is best to do your research beforehand. Factors: Age Residency Minimum Incomes Credit History You’ll need: Personal details, ID, proof of income at the least to apply.


 

Security

All banks and credit card providers have high security measures. Some more protection that others, but in most cases, credit cards and travel credit cards will offer:

  • Refund protection
  • Purchase protection
  • Online Fraud Protection
  • Emergency card replacement
  • Global Card Support

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