Travel Cards – Why Bother?

In this day and age of tap and go payments you could be forgiven for thinking that travel cards are a thing of the past. Why bother getting a special card for travelling when you have a credit card that works all over the world?

Two Words: bank fees.

Using your Australian debit card overseas invariably results in you being charged exorbitant fees for the privilege which is why next time you travel it’s worth considering a travel card as an option.

Why use travel a card?

  • They’re a convenient and secure means of topping a card up with foreign currency, and eliminate the hassle and anxiety associated with carrying cash or cheque overseas
  • Pre-paid cards allow the user to assess current exchange rates and pick a time when the relevant exchange rate is in their favour (when the AUD is looking strong)
  • Travel cards can be used to make a wide range of payments – including reservations, accommodation and retail purchases. Online purchases can also be made overseas using travel cards.

Compared with credit cards where associated fees can be confusing and vary depending on what country you’re travelling to, travel card fees tend to be more black and white.  What’s more, travel cards usually incur a flat fee for all overseas withdrawals where as credit and debit cards tend to charge a percentage on the amount withdrawn.

Here is a breakdown of fees for two different travel cards that are offered by two of the major banks:

  1. ANZ Travel Card – http://www.anz.com/personal/travel-foreign-exchange/travel-money/travel-card/
  • Card issuance fee of $11
  • Re-load fee of 1.1% (of the value purchased)
  • AUD currency fee – 3% of the value of transaction
  • ATM withdrawal fee – AUD 3.50
  • No fees for: balance enquiries, card replacement, purchase (in-store or online), initial card load
  1. CBA Travel Card – https://www.commbank.com.au/personal/international/travel-money-card/fees-charges.html
  • Card issuance fee of $15
  • No re-load fee
  • ATM withdrawal fee – AUD 3.50
  • $15 card replacement
  • No fees for: balance enquiries from Melbourne accountants, purchase (in-store or online), initial card load, card re-load, transfer between currencies, emergency cash advance, transfer to transaction account, card closure

In comparison, here are the sorts of fees you could expect to incur if you were to use either a credit card or a debit card from the same banks.

Credit cards

  1. ANZ Fees & Charges – https://www.anz.com.au/content/dam/anzcomau/documents/pdf/personal-account-fees-charges.pdf
  • Overseas withdrawal in a foreign currency from an ANZ ATM or a non-ANZ ATM à 3% of value of withdrawal/purchase
  • Withdrawal/purchase in a foreign currency where the merchant accepting the card is located overseas à 3% of withdrawal/purchase
  • Overseas ATM transaction fee = $5
    • May also be charged a fee by the operator of a non-ANZ ATM for either/both a balance enquiry or withdrawal
  1. CBA Fees & Charges – https://www.commbank.com.au/personal/credit-cards/card-fees-charges.html
  • Transactions converted by MasterCard or Visa à 3%
  • Transactions converted by American Express à 2%
  • Transactions overseas in AUD à 3%

Additionally, American Express transactions are subject to a 1.50% currency conversion fee (which is included in the converted transaction amount)

Debit cards

  1. ANZ Fees & Charges – http://www.debitcards.com.au/anz-debit-card-overseas-fees/

In most cases, ANZ debit card holders are charged the following:

  • Overseas ATM withdrawal in a foreign currency à $5 + 3% of the transaction value
  • Overseas transaction fee – 3%, charged at any merchant outside of Australia

However;

  • ANZ doesn’t charge for overseas ATM balance enquiries, and the $5 ATM fee is calculated based on what the operator will charge, not ANZ directly
  1. CBA Fees & Charges –
  • International ATM and EFTPOS fee charged on each transaction
  • Completing a Debit MasterCard purchase in AUD at an overseas merchant will incur a transaction fee of 3%
  • Commonwealth Bank ATM fees outside Australia à $2
  • Cirrus, MasterCard or Visa Plus ATM cash withdrawal à $5 + 3% of the transaction value
  • Debit MasterCard purchase that involves currency conversion à 3% of the transaction value

You be the judge!

Happy travels from the Rising tide team.