When traveling overseas, it's easy to rack up credit card fees on international transactions.
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?
- Pros and Cons
- Credit Card: Fees and Charges
- Travel Credit Card: Fees and Charges
- Rewards and benefits for each card
- So which one is best?
- Who can apply?
Pros and Cons: Credit Cards
|Favourable annual fees||No reward schemes offered with credit cards|
|Affordable minimum credits||No travel insurance offered with the standard low rate credit cards and higher fees charged for the premium credit card|
|Free additional cardholders||For some credit cards you have to be a permanent Australian resident|
|Travel insurance offered with premium versions of credit cards offered|
Pros and Cons: Travel Credit Cards
|Attractive reward schemes available through travel credit cards||High minimum credit for travel credit cards|
|Low or zero international transaction fees||High annual fees|
|Complimentary travel and/or medical insurance offered with a lot of cards||Usually a cost for any additional card holders|
|Frequent flyer points to help you get discounted or free flights||High minimum monthly salary requirement|
|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:
- Purchase Interest Rate
- Annual Fee
- Balance Transfer Interest Rate
- Cash Advance Interest rate and cash advance fee
- Late payment fee
- International Transaction fee
- 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||
||ANZ Travel Rewards Adventures Card||To new customers only:
|Commonwealth Low Rate Credit card||
||ANZ Travel Rewards Adventures Card||
|Westpac Low Rate Credit card||
||28 degrees credit card||
|NAB Low Rate Credit card||
||Amex Qantas Discovery Credit card||
|Citibank Simplicity card||
||Amex Explorer Credit Card||
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.
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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