Credit Cards With No Foreign Transaction Fees

1. Buy currency at a forex counter at home 
2. Buy currency from the bank at home 
3. Bring Traveler’s Cheques 
4. Buy a Travel Card 
5. Get cash out at an ATM abroad 
6. Use your credit card 
7. Use an online currency exchange 
8. Change your money at an overseas forex trader 
9. Buy currency at the hotel 

#1 Using Credit Cards With No Foreign Transaction Fees  

Credit cards are by far the most cost effective way to travel if the country is set up for it. For example, I wouldn’t count on this in Kiribati or Turkmenistan. 

But why is the mighty credit card the winner?

Well, as a principle, credit cards are the cheapest way to convert cash because they don’t involve handling fees. Most will only charge 1-3% as a fee of the transaction cost.

However, one card offers ZERO international transaction fees on purchases with a $0 annual fee as well.

This card is called the BankWest Zero Platinum Card.

I’ve written all about its benefits here, including its free travel insurance feature.

You are right! But unfortunately, what they didn’t tell you was that instead of calculating the transaction at the MasterCard cross rate like a credit card, they transferred your money at 3-5 cents in the dollar less to make their money off you.

For example, when you were loading your Australian Dollars onto the card for US Dollars, they were happy to buy the AUD for 70 cents in the dollar, but would only sell AUD to you for 80 cents in the dollar. The implied cross rate here is 75 cents. So they just took 5 cents in the dollar off you before you even went on holidays.    

Rip off!

The only travel card out there that doesn’t do this (and has 0% fees on EFTPOS as well) is the 28 Degrees Card. However, it lacks the free travel insurance that the BankWest card offers. 

• No currency conversion fees with market rates set by VISA.

• No Citibank fees for international ATM withdrawals

• No account keeping/monthly fees.

You must have a bank account set up on the other side. 

If you do, you can use companies like AFEX or TorFX to transfer your cash for about 1.5-1.9% commission. This is a great way to bulk transfer your cash, but isn’t an overnight option.

LOSERS 

#1 Bring traveler’s cheques

Historically, traveler’s cheques were seen as safer options than lugging around excessive amounts of cash. 

The problem is, not all banks accept them, they take a few days to clear, and they incur ridiculous handling fees to process. 

Just remember, if your uncle suggest this, smile and nod. 

#2 Buying currency from a forex counter 

This isn’t the worst idea. There are competitive rates out there, especially in South East Asia where they can be a couple of days behind the market. But, because there is the element of human intervention, which costs more than computer transactions, forex counters will generally need a bigger margin. 

Additionally, in some places around the world, the best magicians on earth work for currency exchangers. 

Now you see it, now you don’t.

I want to clarify this one. If you are travelling with a whole bunch of cash from your home town, there ARE some countries like Indonesia where they will give you a better rate than an ATM. 

However, in most countries, especially 1st world, they will add handling fees and a fat swap rate onto the price they trade your cash for theirs. 

# 3 Buying currency from the bank

This is nearly the worst idea.

The banks will always slug you with excessive fees and sub-par rates. 

The only party that wins in these transactions are the banks. 

# 4 Buy a travel card 

The travel card, like most banks offer these days, should only be used when you cant get a credit card, don’t trust yourself with holding cash, and want to lock in the rate you use for your trip.

As I said before, they will try and tell you they have no fees, but the fees are hidden in the exchange rate and work out to be more than any commission a credit card or ATM will charge. 

These should only be preferred ahead of traveler’s cheques.

*The 28 Degrees card mentioned above is the exception to this rule.

 # 5 Buying currency at the hotel. 

Doing this is like snacking from the bar fridge in your hotel room. You know it’s a rip-off, but you do it anyway. 

The exchange rates are posted on the lobby wall, they are clearly a massive rip off, and make you question whether they have been updated in weeks. 

This should only ever be used as a last resort, and the hotels know this. 

So, please, stay away!

So there you have it, your life hack to fee free travel lies in the combo of a BankWest Zero Platinum Card and a Citibank Plus Account Debit Card!

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