Compare cards with no international transaction fees

A credit card with no foreign transaction fee is, as the name suggests, a card that does not charge you for using your card to buy from an overseas business or retailer.

If you are purchasing from an online store based in another country, or using your card overseas, you may be charged foreign transaction fees.

Further, if you make a purchase with your credit card in a foreign currency, you may face both foreign transaction fees and currency conversion fees. 

What are foreign transaction fees?

Foreign transaction fees are an additional amount charged to your credit card when you make a purchase with a retailer outside of Australia. This fee is typically between 2 and 4 per cent, yet can vary depending on your bank and credit card. 

Foreign transaction fees are charged to cover the cost of processing a foreign transaction, to help offset greater fraud risks associated with international transactions.

Are foreign transaction fees the same as currency conversion fees?

No, foreign transaction fees are not the same as currency conversion fees. 

Currency conversion fees are charged to cover the cost of converting foreign currency back into your local currency. Foreign transaction fees are a general cost associated with any and all transactions with overseas retailers or overseas ATMs.

When you’re comparing any credit card to find the best option for you, it’s important to make a feature-by-feature comparison.

It’s no different when comparing credit cards with no foreign transaction fees.

The features you should compare when deciding which is the best credit card for you include:

• Interest rate on purchases
• Cash advance interest rate
• Cash advance fees
• Ongoing fees, either monthly or annually
• Rewards programs
• Extra benefits, like frequent flyer points or airport lounge passes
• Interest-free days
• Balance transfer fees

What is the cheapest credit card with no foreign transaction fee?

The cheapest card with no foreign transaction fee will be the card that has the lowest total cost. This will depend on many of the features mentioned above, including the cash advance rate, interest rate on purchases and other fees and charges.

Before you apply for a credit card with no foreign transaction fees, make sure you check the Product Disclosure Statement (PDS) or Key Facts Sheet. Whilst they are often not clearly advertised, they will always be available to you if you ask the lender. 

These documents will provide you with all the information you need on the credit cards you are comparing, so you can calculate the total cost of each card and compare apples with apples.

In order to secure the best credit card for you, and the cheapest deal, keep an eye out for hidden costs, like promotional low rates that revert to higher ones after a certain period of time. 

To see how a credit card with no foreign transaction fee could save you hundreds of dollars, we need to do a like for like comparison.

Let’s say, for instance, you’re going on a family holiday to France, from Australia. You purchase flights, accommodation and tours from a French website, in Australian currency. You then spend €1800 in France during your six day holiday. The currency conversion fee is 1% of the €1800 spent, which brings your total spending to €1818 or $2942.41 Australian dollars. 

Below you can see the difference between a credit card with no foreign transaction fees, and one that charges 3%:

That’s a saving of $245.47 over the six day holiday.