# Forum More Stuff Debate & Technical Discussion  Avoiding international credit card fees

## Bros

Is there a way to avoid the 3% international transaction fee charged by the banks on Visa and Mastercards? 
I know that are doing it tough but not at my expense.

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## Uncle Bob

Maybe a Travelcard is the go?

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## Bros

> Maybe a Travelcard is the go?

  Not really used them in the past and the cost was excessive. I want to use Visa or Mastercard to book accommodation and hire car overseas and they only take Visa or Mastercard.

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## JB1

Bankwest Platinum credit card doesn't charge foreign currency conversion fee. $0 annual fee.  
Citibank plus debit card also doesn't charge foreign currency conversion fee or any fees from overseas ATMs. 
I have and use both when I travel.  
====

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## FrodoOne

> Is there a way to avoid the 3% international transaction fee charged by the banks on Visa and Mastercards? 
> I know that (they) are doing it tough but not at my expense.

  Unfortunately, the "fees" and the "Rate" differential for conversion and transfer of actual "Money" by Banks usually totals much greater than 3% 
The cheapest way I have found to send money to relatives/friends in other countries is via our mutual PayPal accounts.
However, with any transfer you need to take into consideration both the differential value of any exchange "Rate" and the Fees charged. 
By this I mean that you MUST take into consideration that the "advertised" rate of exchange between two currencies on any day maybe (say)
AUD$1.00 = USD$0.77 but the Rate "used" by the transferring organisation *will* differ, towards their benefit. 
You need to consider the Rate that any Bank/Carrier is offering - plus any extra charges involved, for both you and the recipient.

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## r3nov8or

I know every penny counts, but if one can afford to travel internationally, one can also probably afford to pay an extra 3% for that trip, and if you shop around for 'value' (your personal definition is the only one which counts  :Smilie:  ), you can cover it by saving at least 3%...

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## Bros

> I know every penny counts, but if one can afford to travel internationally, one can also probably afford to pay an extra 3% for that trip,

  I don't disagree but paying that to the greedy banks doesn't go down well for me. 
If you have been following the bank royal commission and the ANZ I think it was admitted giving bad financial advise and when questioned as to did that tell the clients, no was the answer it is up to the clients to come to us.  
So it is a case of look after No 1 as no one else will in the financial arena. 
Hence the question.

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## Uncle Bob

Next there should be a royal inquisition into the tax dept. How come they can keep going after the poor but the big end of town doesn't have to pay anything!!

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## JB1

> I know every penny counts, but if one can afford to travel internationally, one can also probably afford to pay an extra 3% for that trip, and if you shop around for 'value' (your personal definition is the only one which counts  ), you can cover it by saving at least 3%...

  I may spend $10k while overseas on a holiday, $300 is better in my pocket than the banks. Equal to a very nice dinner.   

> Next there should be a royal inquisition into the tax dept. How come they can keep going after the poor but the big end of town doesn't have to pay anything!!

  Big end of town has deeper pockets and can afford better lawyers than the ATO.  
Much easier and more profitable to go after and intimidate the small guy.
====

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## Bros

> I may spend $10k while overseas on a holiday, $300 is better in my pocket than the banks. Equal to a very nice dinner.  
> Big end of town has deeper pockets and can afford better lawyers than the ATO.  
> Much easier and more profitable to go after and intimidate the small guy.
> ====

  I agree

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## r3nov8or

> Equal to a very nice dinner.

  There you go. I've never spent $300 on a dinner. Can I come along?

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## rebuildr86

i use citibank, purely becasue my credit card with them is not charged international transaction fees. ( i live in the philippines for 6 months of the year)

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## Marc

Interesting ... what do you do in the Philippines 86? 
r3nov8or, what is your point? Do you have a relative in the banking industry?

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## r3nov8or

> i use citibank, purely becasue my credit card with them is not charged international transaction fees. ( i live in the philippines for 6 months of the year)

  It would be interesting to know which specific card you have and where was it issued (country)? Asking because this AU page says they charge 3.4% and I can't see any exceptions... https://www.citibank.com.au/aus/stat...andcharges.htm

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## Marc

> Not really used them in the past and the cost was excessive. I want to use Visa or Mastercard to book accommodation and hire car overseas and they only take Visa or Mastercard.

   Many banks offer fee free international money transfer to any bank anywhere using a debit card, including Citybank. Some banks overseas however do charge a fee. Depending where you travel it is best to take out a debit card at the bank that has branches in the country you are going to. Sometimes it is not the fee that you must worry about but the exchange rate used. Pay Pal and Amazon for example have a lousy exchange rate

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## JB1

> There you go. I've never spent $300 on a dinner. Can I come along?

  You're welcome but we'll go Dutch  :Smilie:   
====

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## JB1

> It would be interesting to know which specific card you have and where was it issued (country)? Asking because this AU page says they charge 3.4% and I can't see any exceptions... https://www.citibank.com.au/aus/stat...andcharges.htm

   Check out Citibank debit card https://www.citibank.com.au/aus/bank...ibank_plus.htm  
But I prefer spending other people's money first so Bankwest is my preferred credit card https://www.creditcard.com.au/bankwe...m-credit-card/ 
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## Bros

> But I prefer spending other people's money first so Bankwest is my preferred credit card https://www.creditcard.com.au/bankwe...m-credit-card/ 
> ====

  Bankwest card is in the mail.

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## JB1

Fantastic card! 
$0 annual fee so no downsides of keeping it just for international purchases  
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## Bros

> Fantastic card! 
> $0 annual fee so no downsides of keeping it just for international purchases  
> ====

  How did you top it up did you have another account with them and just transfer money?

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## Marc

Transfer from your everyday bank account, using the bank website with the facility of "Pay anyone" or "Transfer to another institution" each bank calls it something else but they all work the same way. Today it is universal and free of fees. Takes a day or two. Sure you can also B-pay but that introduces an external expense in the transaction that the bank pays but we all eventually pay.

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## Bros

I ended up opening a transaction account with them and I will top it up before I go so I can just transfer money from one to the other. I know I could have added to the credit card directly but I ended up doing it this way.

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## Bros

Just a bit of feedback. 
I used the Bankwest credit card for the bulk of my NZ expenses totaling $8300 with good exchange rate and no international transaction fees. 
One bill that was paid by Comm credit card gave equally good exchange rate but on $244 AU I got hit with $7.33 transaction fee. 
So thanks to JB1

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## joynz

Good to know.  I was just in NZ for a couple of weeks and will be going again in a couple of months so will look into this (already paid for the rental car yesterday though!). 
i just saw on their website that the bank west card includes free travel insurance (Hopefully has ncluding the rental car excess waiver, which is mainly why I take out insurance in N.Z). 
I recently saw an ad from ING that said something like ‘no international transaction fees’ but my card didn’t work in NZ a couple of weeks ago. 
Looking at their website, they charge 2.5% then rebate it the next month - but don’t think they have free travel insurance...

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## JB1

> Just a bit of feedback. 
> I used the Bankwest credit card for the bulk of my NZ expenses totaling $8300 with good exchange rate and no international transaction fees. 
> One bill that was paid by Comm credit card gave equally good exchange rate but on $244 AU I got hit with $7.33 transaction fee. 
> So thanks to JB1

  Glad to help. 
Reason why Bankwest and CBA (and other banks) credit card with Mastercard have the same exchange rates but different fees/charges- the exchange rate is set by MasterCard. The banks set their own fees/charges. 
In this case there CBA charged 3%.  
On $8,300 of foreign currency charges that would be $250.  
====

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## Bros

While I was away I got an email newsletter from Noel Whittaker about overseas travel which is worth reading.   

> *Travel Finance*      The foregoing is a perfect segue to a discussion about travel finance.
> Recently a reader highlighted a problem that is affecting many retirees. She and her partner have long had a credit card with the principal card in his name, and hers held as a supplementary.
> She had read my advice that both partners have a card in separate names, because if either the primary card or the supplementary card is lost or stolen, both cards are cancelled. This could be particularly challenging if you are travelling overseas. 
> Her problem was that no bank would give her a credit card. They were a retired couple living on their superannuation, but their taxable income was zero. For credit assessment purposes they were unemployed with no taxable income. 
> The solution is a debit card. No credit application is required – the card simply allows you to access the funds you hold in the bank account that is attached to the card. In my experience the perfect card is an ING Direct Orange Everyday account, which I have been using for years. Their Visa debit card has no fees, and provided you deposit at least $1000 every month, all withdrawals from ATMs in Australia, and throughout the world, are free of fees. 
> For years my favourite overseas credit card has been the 28° MasterCard. It has no annual fees, no commission charges, and the exchange rate is extremely competitive. However, they do charge $0.95 every time you make a payment on the card, and they also charge the greater of $4 or 3% of the amount withdrawn, if you take cash from an overseas ATM.                                     We have now returned from overseas, and to achieve a valid comparison, I used both my 28° MasterCard and my ING card. There is really nothing between them on the exchange rate, but the ING card has a brilliant app that means you can keep track of your spending, and know within a minute or so the Australian equivalent you have been charged when you make a transaction. 
> It’s like carrying around a bag of cash. The balance shows in real time on the app on your phone, and if you need a quick 50 Euro you just go to the nearest ATM and withdraw it on the spot with no fees. 
> For overseas travellers, one of the biggest con jobs is when the merchant suggests you pay the bill in Australian dollars instead of local currency. This enables them to load the exchange rate. Last weekend we were checking out of our hotel in Hong Kong. They gave us a choice of   HK$11564 or AUD$2300.50.
> I did a quick check on the rate using the XE app on iPhone and it told me the wholesale rate was $2082.85. I then chose to pay the bill in HK dollars using my ING card: within seconds the debit showed up as just  AUD$2081.90 – quickest $219 I have ever made. 
> ...

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## joynz

OK - have sorted out why my ING Orange Advantage card didn’t work in NZ recently - I was selecting Savings instead of Credit.  It is actually a debit card in Australia but acts as a visa overseas (though apparently some rental car places may not accept it for the bond). 
I have just applied for a Bankwest zero card. 
Unfortunately, I have already paid for my flights, rental car  etc on my existing Westpac Visa so not eligible for the free travel insurance through the Bankwest card (you have to spend $500 on flights/accommodation etc on the card to qualify).

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## Bros

I thought I would come back and visit this again. We have just come back from NZ and we spent $6947 by Bankwest CC with no transfer fees. If we had used our Comm bank CC we would have had the luxury of forking out an extra 3% for fees. 
In one place they never had any change of $50 so I use my CC to buy a couple of ice creams for $8 NZ. I checked the currency conversion and for that day it cost us $7.53

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## joynz

Also Bankwest has changed the eligibility for the free travel insurance for their cc. 
You no longer need to pay for a set amount on flights etc before traveling in order to qualify. Now the travel insurance kicks in automatically once I get to international airspace without needing to register or anything (according to the customer service person I spoke to the other day). 
However, the free travel insurance is pretty basic by the sounds of things - so best to check that you really are covered for everything.  
When I asked the other day,  I was told that the standard option wouldnt cover trip cancellation or car rental excess so I would need to arrange a higher level of insurance in advance for these things.

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## Petebrisvegas

https://www.creditcardcompare.com.au...hoCw5gQAvD_BwE 
I have the ANZ travel rewards card , 75000 Velocity point bonus on signup atm , free return flights and lounge passes amongst other features , no brainer

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## joynz

> https://www.creditcardcompare.com.au...hoCw5gQAvD_BwE 
> I have the ANZ travel rewards card , 75000 Velocity point bonus on signup atm , free return flights and lounge passes amongst other features , no brainer

  Yes, but the ANZ card costs $225 per year!   The Bankwest card is free.

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## Petebrisvegas

First year of ANZ rewards card you get north of $1,000 worth of value for your $225. You keep getting your free card and get nothing for it

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## Bros

> First year of ANZ rewards card you get north of $1,000 worth of value for your $225

   Pretty useless if you don’t need it, I’ll stick to my free card thank you.

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## GraemeCook

> I thought I would come back and visit this again. We have just come back from NZ and we spent $6947 by Bankwest CC with no transfer fees. If we had used our Comm bank CC we would have had the luxury of forking out an extra 3% for fees. 
> In one place they never had any change of $50 so I use my CC to buy a couple of ice creams for $8 NZ. I checked the currency conversion and for that day it cost us $7.53

  
Good Morning Bros 
Having worked for a merchant bank 30+ years ago, I have been watching this thread evolve while quietly shaking my head and thinking - *the banks do not give free lunches*.   
Banks deliberately keep their charges opaque.  They charge a multiplicity of fees, interest rates and FX rates depending on the "rating" of the client and perceived competitive pressures.  No matter how deserving you think you are, you will not get the same rates as, say, BHP or Westfarmers, and a potential new client may be offered a "honeymoon" deal.  Their published "rates" are just nominal rates that might or might not apply to some clients.  And on FX transactions the banks both charge fees and fiddle the exchange rate, a "secret fee". 
I decided to have a look at Bankwest credit card FX rates on transactions in New Zealand dollars using publically available information:  *First*, BankWest, a subsidiary of ComBank, issues Mastercard credit cards and uses the FX rates set by Mastercard. https://forum.bankwest.com.au/t5/Cards/Foreign-exchange-rates-used-for-Credit-Card-purchases/td-p/978  *Second*, Mastercard  publish a "Mastercard Currency Converter" which very helpfully includes a box for the "Bank Fee"*.* https://www.mastercard.us/en-us/consumers/get-support/convert-currency.html *
Third*, As I write this the Mastercard conversion rate for expenditure of NZ$1 from a zero fee credit card is AU$0.960930.
But if you had a credit card that charged a 3% FX fee then expenditure of NZ$1 would be charged as AU$0.989758. *Note*: that when the bank fee changed, so did the exchange rate!  *Fourth*;  if you look at the difference between those rates (by division):
           0.989758 / 0.960930 = 1.03000
            a variance of exactly 3%.  *Fifth*;  I am sure that it is purely coincidental that the the increase in the exchange rate is exactly equal to the FX fee that you were not charged. 
Sorry, *no free lunch*.   
Cheers 
Graeme

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## Bloss

> While I was away I got an email newsletter from Noel Whittaker about overseas travel which is worth reading.

  This is the kicker: _
For overseas travellers, one of the biggest con jobs is when the merchant suggests you pay the bill in Australian dollars instead of local currency. This enables them to load the exchange rate. Last weekend we were checking out of our hotel in Hong Kong. They gave us a choice of HK$11564 or AUD$2300.50._ _I did a quick check on the rate using the XE app on iPhone and it told me the wholesale rate was $2082.85. I then chose to pay the bill in HK dollars using my ING card: within seconds the debit showed up as just AUD$2081.90  quickest $219 I have ever made._ 
ALWAYS choose to pay in local currency regardless of the card.

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## Bros

> ALWAYS choose to pay in local currency regardless of the card.

  On our last trip this option wasn't very common, but we did use the local currency as I had been warned

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## JB1

> Good Morning Bros 
> Having worked for a merchant bank 30+ years ago, I have been watching this thread evolve while quietly shaking my head and thinking - *the banks do not give free lunches*.   
> Banks deliberately keep their charges opaque.  They charge a multiplicity of fees, interest rates and FX rates depending on the "rating" of the client and perceived competitive pressures.  No matter how deserving you think you are, you will not get the same rates as, say, BHP or Westfarmers, and a potential new client may be offered a "honeymoon" deal.  Their published "rates" are just nominal rates that might or might not apply to some clients.  And on FX transactions the banks both charge fees and fiddle the exchange rate, a "secret fee". 
> I decided to have a look at Bankwest credit card FX rates on transactions in New Zealand dollars using publically available information:  *First*, BankWest, a subsidiary of ComBank, issues Mastercard credit cards and uses the FX rates set by Mastercard. https://forum.bankwest.com.au/t5/Cards/Foreign-exchange-rates-used-for-Credit-Card-purchases/td-p/978  *Second*, Mastercard  publish a "Mastercard Currency Converter" which very helpfully includes a box for the "Bank Fee"*.* https://www.mastercard.us/en-us/consumers/get-support/convert-currency.html *
> Third*, As I write this the Mastercard conversion rate for expenditure of NZ$1 from a zero fee credit card is AU$0.960930.
> But if you had a credit card that charged a 3% FX fee then expenditure of NZ$1 would be charged as AU$0.989758. *Note*: that when the bank fee changed, so did the exchange rate!  *Fourth*;  if you look at the difference between those rates (by division):
>            0.989758 / 0.960930 = 1.03000
>             a variance of exactly 3%.  *Fifth*;  I am sure that it is purely coincidental that the the increase in the exchange rate is exactly equal to the FX fee that you were not charged. 
> Sorry, *no free lunch*.   
> ...

  I won't disagree with what you wrote because I can't verify or dispute your calculations however have you considered Bankwest has more than one card offering? 
The card I'm refering to is the Bankwest Platinum Mastercard.  
Bankwest charges no additional forex fee on top of Mastercard's forex fee. This is not disputable. 
Using the Mastercard calulator you linked got me this, USD$1000 would cost you AUD$1,462.20 assuming your Australian credit card provider charged you nil forex fees.  
This is as good as a normal person is going to get and is very close to the spot rate according to XE. 
No one is saying Bankwest is not making money on the transaction,  but it's true that they aren't adding an additional forex fee. 
There's no free lunch. Mastercard is still making money from the transaction, Bankwest is still making money. Who is paying for the cost in this case? The merchant is.   Just like if the transaction was at Coles down the road, I don't get charged any fee unless I forget to pay within the interest free period.  https://forum.bankwest.com.au/t5/Int...-p/9172⁰          
Snapa

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