Travel is full of wonderful surprises, but international transaction fees are not among them. When you purchase outside of Australia or in a foreign currency, expect a fee to follow. While a few dollars might not seem like a lot, they add up — especially if you travel a lot. These fees can, however, be avoided.

What is an international transaction fee?

An international transaction fee is a commonly encountered type of credit card fee that you may be subject to if you use your credit card at a non-Australian retailer. Your credit card issuer charges this fee and is typically a percentage — typically around 3% — of the purchase amount.

Although 3% may not appear to be significant, it can accumulate over time. For instance, if you spend $1,000 on a credit card that has a 3% foreign transaction fee during a month-long European vacation, you would have to pay an additional $30 on your bill.

Keep in mind that international transaction fees are not limited to purchases made overseas. They can also apply to transactions with a non-Australian retailer. So, if you buy something online from a company based in another country, you may see this fee on your credit card statement.

The Australian Competition and Consumer Commission (ACCC) has warned people to look out for international fees when shopping online and travelling overseas.[1]

Other fees to know when making international transactions

Foreign currency conversion fees

It’s important not to mistake a foreign transaction fee for a currency conversion fee. Although the two can be applied to overseas purchases, sometimes even on the same purchase, they are distinct from each other. Currency conversion fees are additional charges that are not clearly stated and are imposed when you request that your transactions be shown in US dollars.

This fee can also apply to foreign transactions made with a debit card.

🤓 Nerdy Tip

Some travel rewards credit cards may waive foreign currency conversion fees as a perk.

International and overseas ATM fees

Banks and credit unions typically charge either a flat fee — often up to $5 — or a percentage of the amount you withdraw when you use a debit card to withdraw cash from an international ATM. This fee may differ from your institution’s domestic out-of-network ATM fee.

If you use a credit card to “buy” cash from a foreign ATM, you’re using a cash advance. So, you should expect to pay added fees and interest.

The machine owner may also impose its own ATM fee. This will be in addition to what your bank charges, but generally a similar amount.

How to avoid an international transaction fee

There are plenty of ways to avoid paying withdrawal and purchase fees while using a credit card on an overseas holiday. It takes a little extra planning and preparation, but it’s worth the effort. If you’re going away for an extended time, this can save you hundreds — if not thousands — of dollars.

Stretch your trip budget further by minimising or avoiding international fees, and gain confidence in communicating and negotiating with your bank. It’s a financial skill that’ll pay off.

Pick the best tools for the job

Look for banks with no- and low-fee options. Some banks and online institutions have traveller-friendly accounts that may have no foreign transaction fees or offer reimbursements on international ATM fees.
Get a travel money card. There are specific ‘travel money cards’ for preloaded foreign currencies, such as Travelex or the Australia Post prepaid card. While these products are great if you want to lock in an exchange rate and ATM international withdrawal fees, they have limitations. Travelex, for example, charges monthly inactivity and closure fees.
Use payment cards and debit cards. According to the ACCC report, these options are generally cheaper than International Money Transfers (IMTs), withdrawing foreign cash while overseas, and using prepaid travel cards for overseas purchases. Plus, some banks have debit cards with no international transaction fees or money transfer charges.

Learn the tricks of the trade

Skip foreign cash exchanges. There’s one universal rule when it comes to overseas travel: avoid foreign cash exchanges at the airport. Don’t be lured in by the ‘no fees, no commissions’ sign. These providers rely on a highly unfavourable exchange rate (and travellers who aren’t well-versed in these calculations).
Find banks with international networks. Some institutions partner with banks in other countries so travellers can use their ATMs without paying out-of-network fees. Check to see if your bank has such an arrangement before you travel.
Work with your bank. Like everything finance-related, it pays to talk to your bank for specific advice. Your bank is there to provide you with all the relevant options. Make it part of your financial goals to reach out regularly to discuss upcoming and long-term plans.
Avoid freezes. It’s also important to tell your bank about any future trips so they won’t automatically block your credit card if you do use it. If you don’t tell them, they will mistake your overseas purchases for someone else’s using your card. You can inform your bank of your trip dates through your online login to prevent issues using your card abroad. Westpac customers, for example, will navigate to the ‘notify going overseas’ page.

» MORE: 9 things to know before getting a credit card

International transaction fees charged by Australian banks

This is a general guide to the types of overseas fees charged on different products by various Australian banks. Please note that using a credit card at an ATM results in a cash advance fee — and currency conversion fees and additional charges from the ATM owner may also apply.

Bank and product	Overseas ATM Fee	International Transaction Fee
Commonwealth Bank Travel Money Card	$3.50, or foreign currency equivalent using the Visa exchange rate at the time of the withdrawal	N/A
Commonwealth Bank Debit Mastercard	$2 within network, $5 out-of-network	3%
Commonwealth Bank Credit Card	$3, or 3%	3%
Westpac Worldwide Wallet	$0 within network, or $1.50-$2.00 out-of-network (based on the currency)	N/A
Westpac Debit Mastercard	$0 within network, or $5 out-of-network	2.2% in Autralia, 3% when overseas
Credit Card Westpac	$0 within network, or $5 out-of-network	2.2% in Autralia, 3% when overseas
NAB Debit Card or NAB Visa Debit card	$5	3%
NAB Platinum Visa Debit Card	$5	$0 on purchases, 3% on cash withdrawls
NAB StraightUp Card	N/A	N/A
Other NAB Credit Cards	$5	3%
ANZ credit cards	$4	3%
ANZ debit cards	$5 per cash withdrawal at a non-ANZ ATM, plus 3% of the transaction value (including any ATM operator fees)	3%
ING credit cards	$0-$5 (rebates available)	$0-3% (rebates available)
ING debit cards	$0-$5 (rebates available)	$0-3% (rebates available)
ING Orange Everyday card	$0-$5 (rebates available for the first 5)	$0-3% (rebates available)
Macquarie Bank debit cards	$0	$0
Macquarie Bank credit cards	$5, or 3%	$0
American Express Credit Cards	$2.50, or 2%	3% currency conversion fee