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2.4. Travel and overseas purchases

Credit cards have specific features that make them an affordable payment option for overseas purchases, including:

  • Competitive currency exchange rates
  • More security than cash
  • Complimentary travel insurance
ACTIVITY: Exchange Rates Comparison Check the exchange rates applied to your debit card, credit card and for cash conversion by looking at your bank and issuer websites, reading the terms and conditions or calling them to ask. Write down each exchange rate to see which one is the best. Then you can make sure you get the best exchange rates next time you use your card overseas!
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2.4. Travel and overseas purchases

In Australia, credit cards and debit cards also charge a foreign currency transaction fee of around 3%. This charge applies to transactions made overseas, as well as those you make online with international retailers.

There are a few cards that don’t charge a foreign transaction fee. These “no foreign transaction fee” cards are becoming more popular options for frequent travellers and online shoppers looking to cut down on card costs.

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2.4. Travel and overseas purchases

Case Study: Jonas’s foreign transaction savings
Jonas travels a lot for work and averages around $5000 per month in international transactions on his credit card.

By switching from a card that charges a 3% foreign transaction fee to a card that charges no foreign transaction fee, Jonas can save $150 per month and $1800 per year.
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2.4. Travel and overseas purchases

Case Study: Juanita’s credit card travel insurance
Juanita is planning a holiday overseas for later in the year and decides to get a credit card to save money on travel insurance. She reads the terms and conditions of the card and finds that she needs to pay for the airfares using the card and then activate the insurance for it to cover her and her partner.

When Juanita books the airfares, she transfers the money from her savings account to her credit card straight away. This means she pays no interest and also gets free travel insurance, saving her and her partner around $600 for their three week holiday.