Can You Use a Credit Card to Send Money Overseas?

Yes, you can send money overseas using a credit card. But it can be really expensive depending on how you do it. Learn how to make a credit card remittance, and find out about some cheaper alternative options.

Using a credit card to send money overseas

You can often do it through your bank, PayPal or Western Union. It’s best to avoid using a credit card to transfer money for several reasons:

  1. You will probably pay a higher interest rate as a “cash advance” from the day you make the transfer.
  2. You will pay more in fees.
  3. You probably won’t get a competitive exchange rate

The Currency Shop says:

  • In most cases, you’re better off funding a transfer using your bank account, an electronic funds transfer, or a direct debit.
  • You’ll get a better deal, pay lower fees and get a more competitive exchange rate using a dedicated currency provider.

 

What we will cover

Most of us have credit cards, and they’re a convenient way to buy now and pay later. In some cases, credit cards can be used to transfer money internationally. It’s vital to understand the fees, charges and fine print so you don’t end up paying too much. In this article we’ll explore:

  • When should you use a credit card to transfer money overseas?
  • Emergency transfers – MoneyGram, Western Union and PayPal
  • Standard transfers – your bank
  • Best value transfers – dedicated currency providers
  • Understanding the fine print
  • The Currency Shop reviews different currency providers

So, when should you use a credit card to transfer money overseas?

It is possible to send money overseas with a credit card, but the fees and charges make it more expensive than most other methods.

When you might want to use a credit card

There are some situations where you might want to use a credit card to send money:

  • If you’re benefitting from a reward program like cashback or frequent flyer miles.
  • You need to send money in an emergency and don’t have another way of funding your transfer.

Drawbacks of using a credit card

The drawbacks of using a credit card to send money include:

  • Not all providers will accept a credit card as payment to fund your exchange.
  • The credit card company will often charge higher interest rates on cash advances from the day you send the money.
  • You will often pay other fees and charges if you send money using a credit card.

Can you pay off a credit card with an international bank account?

As a general rule - no. It's particularly hard to do this if the credit card you have isn't from the same bank as your international bank account.

Some good options to consider in these situations are the TransferWise debit card and the Revolut card.

Emergency transfers – MoneyGram, Western Union and PayPal

PayPal, Western Union and MoneyGram are best used only in an emergency. The fees and possibility of a “double conversion” (if you fund in a currency other than Australian dollars) mean that you won’t get a competitive return on your transfer.

  • MoneyGram accepts credit card or debit card payment online, and cash in person. A card issuer cash advance fee and associated interest charges may apply.
  • Western Union does accept international payments online via debit or credit card, at no additional penalty. They accept Visa and MasterCard. The maximum daily amount for an online transfer is $5,000AUD.
  • PayPal does let you fund an international transfer with a credit card, but you will pay for the privilege. They accept Visa, MasterCard and American Express, but charge a minimum of 3.9% of your transfer amount. Additionally, fees can be as high as 7.4% depending on the country you are sending to.

Standard transfers – your bank

As international payment providers, banks can be versatile but do have their weaknesses. They provide multiple ways to fund and send your payment, although you’ll pay for all of them no matter what method you choose. The fees are higher than alternative transfer providers and the rates are worse. As a result, the cost of this extra “convenience” doesn’t seem worth it.

You can use a credit card issued by your bank to make an online international money transfer, providing it is linked to your online banking. Banks also accept credit cards for payment through other forms of transfer including phone banking and in person at a branch.

Best value transfers – dedicated currency providers

You’ll get the best value on your exchange rates and the lowest fees by using a dedicated currency provider like OFX, HiFX or TorFX. It is worth checking which company you use to make sure they accept credit card before you sign up.

Compare money transfer exchange rates and fees

The best deal for you

TransferwiseRead ReviewTotal (AUD)$14,001.50Exchange Rate0.7175Transfer Fees$64.22Transfer Time1-2 DaysLearn MoreTotal (AUD)$14,001.50Rate Updated less than 5 mins agoGO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7175 will cost you $14,001.50 which includes a fee of $64.22

About TransferWise

Transparency and an easy online experience are the 2 things that set TransferWise apart from the banks and other money transfer companies. If you prefer to bank online, you'll like TransferWise. Setting up an account and making a transfer is very easy. They are also very clear on the exchange rate and fees you'll pay before you make a transfer. Click here for the full review

Pros

  • Clear and transparent exchange rates fees
  • The online experience is first class
  • Like the banks, they are regulated by ASIC and registered with AFSL
  • Constantly bringing out new innovative products

Cons

  • There are currently a number of global currencies they do not currently support
  • Limited support based in Australia
  • Percentage based fee can add up on very large transfers

More trusted money transfer options

Provider Exchange Rate Transfer Fees Transfer TimeTotal (AUD) Rate Updated less than 5 mins ago
TorFXRead ReviewTotal (AUD)$14,007.32$5.82 more expensive Exchange Rate0.7139 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $14,007.32$5.82 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7139 will cost you $14,007.32 with no fees.

About TorFX

TorFX are particularly good taking care of customers over the phone but using their website isn't the easiest to use. They don't charge a flat fee which is great but it's important to consider their exchange rates. While, they don't offer fantastic rates for small amounts under $2000 , TorFX offer exceptionally good exchange rates for larger transfers to the UK, New Zealand, South Africa and Europe.

Pros

  • No transfer fees
  • Highly competitive exchange rates
  • Secure transfers with authorised
  • Assigned account manager
  • 24 / 7 Assistance
  • Available range of transfer options

Cons

  • Limited exotic currencies available
  • Exchange rates on small transfers aren't great
  • Website experience could be better
XERead ReviewTotal (AUD)$14,018.59$17.09 more expensive Exchange Rate0.7133 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $14,018.59$17.09 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7133 will cost you $14,018.59 with no fees.

About XE

XE is a well known and trusted name in the money transfer industry. With over twenty years experience, they now help 33,000 people and 2,000 businesses make transfers each year. Over 60 currencies can be transferred with XE and they pride themselves on the free tools and transparent rates they offer. Click here to read the full review

Pros

  • Well known and trusted brand.
  • Very informative website. Extensive information on currency and money transfers.
  • XE App is available on both iOS and Android. It allows you to see the interbank rate for over 100 currencies.
  • XE themselves charge no fees for international money transfers.
  • Offers support for both individuals and businesses when it comes to international money transfers.

Cons

  • Cannot pay via cash or cheque. Must pay via bank transfer, BPay is also accepted in Australia.
  • Maximum transfer amount is $500,000USD.
  • While XE compares more than 100 currencies, there are only 60 that are available for money transfers.
WorldFirstRead ReviewTotal (AUD)$14,021.41$19.91 more expensive Exchange Rate0.7132 Transfer Fees$0.00 Transfer Time2-3 DaysGet discounted rate $14,021.41$19.91 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7132 will cost you $14,021.41 with no fees.

About World First

World First was founded in 2004 in the UK and has grown rapidly with offices now in the U.S., Canada and throughout Asia. They consistently receive strong customer reviews and in a recent study, 98% of their clients said they would use them again.World First have a strong online offering, particular for businesses selling online. They do provide local support as well with offices in Sydney. Click here to read the full review

Pros

  • No fees and great exchange rates
  • Safe and secure transfers
  • Regulated by ASIC and registered with AFSL
  • Great for personal and business payments

Cons

  • Does not accept BPAY, credit card, cheque or cash
  • Limited currencies available
WorldRemitRead ReviewTotal (AUD)$14,077.40$75.90 more expensive Exchange Rate0.7106 Transfer Fees$3.99 Transfer Time1-2 DaysGet discounted rate $14,077.40$75.90 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7106 will cost you $14,077.40 which includes a fee of $3.99

About WorldRemit

WorldRemit are particularly good for transfers under $10,000 to destinations across Asia, Africa and South America. Sending money online is significantly easier than using companies like Western Union or Moneygram and their exchange rates and fees are clear and transparent. With 2 million users, WorldRemit has a focus on improving access to remittances for the billions people worldwide who don’t have access to banking. Because of this, WorldRemit has a number of ways to both make and receive transfers. They concentrate on servicing individual needs as opposed to businesses. Click here for the full review

Pros

  • They have a great network in Asia and Africa and number of receiving options like cash-pick up or bank transfer.
  • They are clear about their exchange rates and fees
  • No minimum amount

Cons

  • Maximum transfer sizes for every transfer
  • No support for business customers
  • They are not licensed to provide financial advice.
OFXRead ReviewTotal (AUD)$14,128.28$126.78 more expensive Exchange Rate0.7078 Transfer Fees$0.00 Transfer Time1-3 DaysGet discounted rate $14,128.28$126.78 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.7078 will cost you $14,128.28 with no fees.

About OFX

OFX (formally known as Ozforex) is the largest Australian owned money transfer company. It launched in 1998 and grew rapidly until finally listing on the Australian Stock Exchange in 2013. OFX excels in 2 areas – Online experience and customer service. The company was born online and continues to develop easy, intuitive products. While OFX customers do most of their transactions online, they are backed up with exceptional customer service.

Pros

  • Better exchange rates compared to banks
  • Highly safe and secure transfers
  • 1 - 2 days delivery times for most countries
  • Quick response time
  • Fantastic customer service

Cons

  • Credit cards, cheques and cash are not accepted
  • Transfers to Thailand can take up to 4 days
  • Fees for transfers smaller transfers
ANZRead ReviewTotal (AUD)$14,450.87$449.37 more expensive Exchange Rate0.6920 Transfer Fees$0.00 Transfer Time1-2 DaysGet discounted rate $14,450.87$449.37 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.6920 will cost you $14,450.87 with no fees.
ANZ International Money Transfer is a secure and fast way to transfer money overseas.

Pros:

  • Fast transfers
  • Safe and secure
  • No fee for transfers under $10 000 via Internet banking

Cons

  • $12 fee for transfers under $10 000 via Internet banking
  • Poor exchange rates
  • 24 hour hotline not available
Commonwealth BankRead ReviewTotal (AUD)$14,748.22$746.72 more expensive Exchange Rate0.6786 Transfer Fees$12.00 Transfer Time1-2 DaysGet discounted rate $14,748.22$746.72 more expensive GO TO SITE
So, sending USD 10,000 to United States at an exchange rate of 0.6786 will cost you $14,748.22 which includes a fee of $12.00
Commonwealth Bank provides secure and easy transfers to over 200 countries and more than 30 currencies.

Pros:

  • Fast transfers+ Easy transfers
  • Security guarantee covers any losses from unauthorised transactions

Cons

  • $6 fee for transfers under $1000 via Internet banking
  • $12 fee for transfers under $1000 via Internet banking
  • Poor exchange rates

Paul Maplesden is a freelance writer specialising in business, finance and technology