Cash overseas: more fees than a dog has fleas

So you are travelling overseas (eg Europe) from your own country.

Photo credit: One Penny

How on earth do you get the least amount of fees charged whilst spending money overseas?
Banks are full of traps for extracting money from travellers. It is not easy to work out what is happening behind the scenes as you innocently pay for a hotel booking in euros, or withdraw cash overseas or pay for dinner on your credit card in Paris.

You will be astounded at what the real cost is to you

I still think the best option is to use a DEBIT card from your bank to withdraw cash from ATM’s whilst overseas and also get a Credit Card that does not charge foreign exchange transaction fees – if you can find one.

Withdraw larger sums – 200 euros and more – because you get punished with a bank fee each time you use this service.
Most importantly: take the time to find out which overseas banks are in the Global ATM Alliance with your bank at home and who won’t charge local bank fees to withdraw their cash.

Never withdraw cash on your credit card. You will be charged at least 20% interest for this “loan” whilst overseas. Always withdraw out of your debit SAVINGS account where you are withdrawing your own cash.

Just remember one very salient point. If you pay for anything overseas on your credit card do the maths and realise that:

you are being charged an extra 9% to do this plus a local and an overseas  bank charge each time for the privilege.

To explain this: the daily published exchange rate at say may state that officially the exchange rate between the AUD is for example today: a pitiful .62 eurocents to the AUD. (Meaning you “officially” pay $160 AUD for a 100 EURO purchase.)

Not so.  Infact this exchange rate is not the rate the banks use to convert your cash. They use (for example today) .58

THEN they charge you a 3% (3.5% for using AMEX) of the transaction as a bank fee to do the payment conversion ontop of this.
Meaning you will pay at least 9% more than the official quoted exchange rate because (based on today’s rates) you are being charged at .55 !!

Your 100 euro purchase now costs you: $181 AUD

So try to avoid using your credit card as much as you can overseas to pay for things. Pay cash that you have withdrawn from your handicard.

SMART Cards. Very smart for banks. Less so for travellers. They claim to be marvellous because you can LOCK IN  a daily rate.
Yes, but not’s daily rate.

Westpac bank has just released its own Travel Card extolling the benefit of no bank fees to use your card whilst travelling and no 3% + foreign currency fees that the banks charge your credit card when used overseas. Except that to “lock in your favourable rate” when you put your money into the card before you travel it slugs you 5% off the official exchange rate when converting.

its still better than using a credit card overseas but also watch out as some Travel Cards will have other charges (annual fees, top up charges etc)

If you want to avoid paying extra to access your cash:

a credit card, debit card with no foreign transaction currency conversion fees is the way to go.

But less than a handful allow you to spend overseas without charging a foreign currency conversion fee.
Citibank Travel Credit CardTry Citibank in Australia to see what charges they slap on as they are at the time of writing waiving the foreign currency conversion fee of 3% and seem like a good deal with a far more favourable exchange rate used too.



2 responses to “Cash overseas: more fees than a dog has fleas

  1. Pingback: Food Travel Gourmet Photography FranceTravel Specialists·

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