Card Costs, Comparisons and 2026 Rules
Foreign transaction fees on Australian credit cards: travel and overseas online shopping
How foreign transaction fees, currency conversion and dynamic currency conversion work on Australian credit cards, and when they cancel out rewards points on overseas spending.
A foreign transaction fee (also called an international transaction or currency conversion fee) is a percentage that many Australian credit cards add to purchases made in a foreign currency and, on many cards, to purchases in Australian dollars that are processed by a merchant or bank overseas. It is usually a few per cent of the transaction and is listed in the card's Key Facts Sheet. On a rewards card that returns, say, 1 cent per dollar in points, a fee of a few per cent costs several times what the points are worth, so overseas spending is often better on a card that waives the fee. Also decline dynamic currency conversion when a terminal or website offers to charge you in Australian dollars abroad; it usually uses a less favourable exchange rate.
This guide is part of the comparison overview. Fees and exchange margins below are illustrative.
Three costs that can apply to one overseas purchase
| Cost | Where it comes from | How to see it |
|---|---|---|
| Exchange rate | The card network's conversion rate on the processing date | Compare the AUD amount on your statement with the foreign price |
| Foreign transaction fee | Your card issuer, as a percentage of the AUD amount | Key Facts Sheet; shown as a separate line or included in the transaction on your statement |
| Dynamic currency conversion margin | The overseas merchant or its payment provider, if you choose to pay in AUD | Receipt shows "AUD" and a rate; often a higher margin |
ATM withdrawals overseas on a credit card add a cash advance fee, cash advance interest from day one, and possibly an ATM operator fee. See cash advance costs.
The online shopping catch
Some purchases priced in Australian dollars are processed overseas, for example by a merchant whose payment provider sits outside Australia. Many issuers charge their foreign transaction fee on these too, because the transaction is overseas-processed even though the price is in AUD. Check your card's terms for the wording, which often refers to transactions "in a foreign currency or processed outside Australia". If your statement shows a fee on an AUD purchase, this is usually why.
Worked example: a trip on a rewards card (illustrative)
You spend the equivalent of A$6,000 overseas on a rewards card earning 1 point per dollar, with points valued at 0.8 cents, and a 3% foreign transaction fee.
- Points earned: 6,000 points × 0.8c = $48 of value.
- Foreign transaction fee: 6,000 × 3% = $180.
- Net: $48 − $180 = −$132.
The same spending on a card with no foreign transaction fee and no points costs nothing extra. On a card that waives the fee and still earns points, it gains $48. Some cards earn higher points on overseas spending; even at 2 points per dollar, rewards of $96 would not cover a 3% fee.
If a merchant offered dynamic currency conversion with an illustrative 4% margin above the network rate, choosing AUD would add about $240 more. Always choose to pay in the local currency.
Choosing a card for travel
- Check the foreign transaction fee first. Some cards marketed for travel waive it; many rewards and frequent flyer cards do not.
- Check what "overseas" means in the terms, including AUD purchases processed abroad.
- Look at included travel insurance carefully. Complimentary cover usually needs activation conditions, such as paying for part of the trip with the card, and has age limits and exclusions. Compare it with a standalone policy before relying on it.
- Carry a backup card on a different network, in case one is not accepted or is blocked for fraud checks.
- Tell your issuer if required. Many issuers no longer need travel notices, but check their app for travel settings or alerts.
The surcharge ban and overseas cards
The Reserve Bank's removal of surcharges from 1 October 2026 applies to payments in Australia on the eftpos, Mastercard and Visa networks, so Australians are no longer surcharged at home on those cards. Overseas merchants follow their own countries' rules, so surcharges may still appear abroad. Visitors using foreign cards in Australia also benefit from no surcharges, and a 1.0% interchange cap on foreign-issued cards applies from 1 April 2027. See the surcharging ban guide.
Disputes and fraud abroad
Card fraud is more common after travel. Check your statements, use card controls in your app to lock or limit overseas online use when not travelling, and report unknown transactions immediately. Chargeback rights through the card scheme apply to overseas purchases too, subject to time limits. See fraud, chargebacks and the ePayments Code.
Frequently asked questions
Is a travel money card better than a credit card?
It depends on fees, exchange rates and protections. Prepaid travel cards lock in rates when you load them but can have load, reload, inactivity or closure fees and leftover balances. A credit card without foreign transaction fees, paid in full, is often simpler for many travellers. Compare current terms.
Do frequent flyer cards always waive overseas fees?
No. Many frequent flyer cards charge foreign transaction fees. Check the Key Facts Sheet rather than assuming.
Why is the amount on my statement different from the receipt?
The network converts at its rate on the processing date, which may differ from the purchase date, and the fee may be added separately.
Does the fee apply to refunds?
When an overseas purchase is refunded, the exchange rate may have moved and the issuer's terms decide whether the fee is refunded. You can ask your issuer.
Sources and where to check
- ASIC Moneysmart — travel money and credit cards overseas
- Reserve Bank of Australia — surcharging and foreign card interchange decisions
- Smartraveller — travel insurance and money advice
- Australian Financial Complaints Authority — disputes about card fees
