Should you get a no international fees credit card?
Will you save money using the 28 Degrees Global Platinum Mastercard or its alternatives?
6 Feb 2023 - 3 min read
If you regularly make overseas purchases online, or, now that our borders have reopened, plan on travelling overseas, you could be considering whether it’s worth your time (and money) to add an international fee-free credit card to your wallet.
We look at the pros and cons of ‘no international fee’ credit cards and ask whether the Latitude 28 Degrees Global Platinum Mastercard is better than other international fee-free cards.
Foreign exchange fees: one of the hidden costs of credit cards
A credit or debit card is usually the easiest option for buying things overseas. However, if you’re not using a ‘no international fees’ credit card, you can find yourself paying extra.
That’s because almost all credit cards will charge a foreign exchange or currency conversion fee whenever you buy from an overseas business, whether in person or online. This fee covers the credit card company for converting your money from Australian dollars to the currency of the country or website where you’re buying from.
How much are foreign exchange fees on an international transaction?
Credit card international transaction fees are usually around 3% of the purchase price and generally range from 2% to 4%. That means if you make an overseas purchase of $500, you could expect to find a total charge of around $510 to $520 on your credit card statement that includes the fee. You’ll also usually have to pay an international transaction fee if you withdraw cash from your debit or credit card when you’re overseas.
In 2019, the Australian Competition and Consumer Commission (ACCC) conducted an inquiry into foreign currency conversion services. It found that Australians spent at least $17 billion a year on credit and debit card transactions that needed Australian dollars converted to foreign currency.
The ACCC estimates that an Australian credit card holder spending $5,000 overseas can expect to pay $140 in currency conversion fees.
If you’re a regular online overseas shopper or frequent traveller, it’s easy to see how foreign exchange fees could quickly mount up.
Are ‘no international fee’ credit cards cheaper than travel money cards?
A travel money credit card is a card that lets you load foreign currencies onto your account so you can buy goods and services when you’re overseas. Generally, considered a ‘no frills’ product, they let you lock in an exchange rate before you travel so you know how much you’re spending in Australian Dollars. Interestingly, the same ACCC study concluded that ‘no international fee’ credit cards were a cheaper way to buy overseas than travel money cards.
The research revealed that customers using a ‘no international fee’ credit card (or debit card) rather than a travel money card could expect to save up to AUD$13 on a US$200 purchase.
The ACCC cites a survey undertaken by one of the big four banks that showed around half its customers didn’t understand currency conversion fees – all the more reason to do your research and make sure you’re paying no foreign transaction fees.
Is the Latitude 28 Degrees credit card the best international fee-free credit card?
The Latitude 28 Degrees Global Platinum Mastercard is one of the most popular international fee-free credit cards. That’s understandable given that it offers real benefits, including:
- no fee on international purchases
- no fee when you withdraw money from an international ATM
- no annual card fee
- up to 55 days interest-free on purchases, and
- access to airport lounges and free wifi when your flight is delayed the ability to pre-load your card so you don’t incur interest on your cash advance interest rate (although you’ll still have to pay the cash advance fee).
That said, there are some real disadvantages to the Latitude 28 Degrees Global Platinum Mastercard too, such as:
- a relatively high interest rate at 21.99%, and
- a cash advance fee of 3%, even when you pre-load the card with your own money.
Should you get a latitude 28 degrees Mastercard?
Based on this, it probably makes sense to consider the Latitude 28 degrees Mastercard if:
- you’re a frequent overseas traveller or you make a lot of purchases
- you tend to pay your credit card bill in full each month so that you don’t incur interest charges, and
- you mainly need a card for overseas purchases rather than foreign currency cash withdrawals.
What alternatives are there to the Latitude 28 Degrees Mastercard?
There are upwards of 15 international-fee free credit cards on offer in Australia, so it pays to do your research before taking one out.
All four of the major banks offer at least one ’no international fee’ credit card, and many challenger banks also offer one.
The trick to finding the right one for you is to compare the foreign exchange charges as well as the annual fees, interest rates, cash advance fees and charges on withdrawals from overseas ATMs.
As some ‘no international fee’ cards also offer reward points and complimentary travel insurance, you should also consider whether these are important features for you.
Here are some of the Australian credit cards that charge no foreign transaction fees.
| Product | Annual Fee | Purchase Rate | Rewards |
|---|---|---|---|
| ANZ Rewards Travel Adventures | $120 | 20.99% p.a. | Yes |
| CommBank Low Fee Gold | $96 | 20.99% p.a. | No |
| NAB StraightUp Card ($1,000 limit) | $120 | No Interest | No |
| Westpac Lite | $108 | 9.90% p.a. | No |
| Bankwest Zero Platinum | $0 | 14.99% p.a. | No |
| Latitude 28º Global Platinum | $0 | 26.99% p.a. | No |
| Coles Rewards Mastercard | $99 | 19.99% p.a. | Yes |
What about debit cards?
Along with credit cards, debit cards can also be used in foreign countries. They have the advantage of being interest-free because you’re spending your own money rather than relying on credit. However, the vast majority still incur currency conversion fees for overseas transactions, with the average charge hovering around 2.8%, and many of them include an annual fee, too. You’re also less likely to earn frequent flyer points or receive complimentary travel insurance with a debit card, and they may offer less protection from theft or fraud - an important consideration when you’re travelling or buying online.
Looking for a better deal on your credit card? We can help you work out whether to stay with your current bank or go with a better offer from a new bank. Get started now.