Can I use my everyday debit or credit card overseas?

Woman sitting on hostel bed, comparing options for her travel adventures.

Planning a big overseas holiday? Whether it be a trail-heavy adventure of the Andes or a soothing two-week stay at a resort in Sumatra, you’re going to need a few things ticked off your travel checklist before you leave Australian shores.

Arguably one of the most important decisions to make before you embark is how to spend your money overseas without racking up unnecessary fees or pricey foreign exchange markups.

Should you load up your hard-earned funds on a prepaid travel card? How about keeping your budget intact with a travel debit card? Maybe you want the freedom to go all out with a travel credit card? Or you could keep it old-school and hit up a foreign currency exchange provider and stick to using cash overseas?

These are all viable options but increasingly, Australian credit card and bank account providers are creating travel money accounts that are versatile enough to take care of your day-to-day domestic expenses but provide great value for overseas use as well, which means your next travel money match could be the card currently in your wallet.

How to decide if your credit or debit card is right for overseas use

To help you decide whether or not the card tucked away in your wallet right now is a cost-effective option to fund your next overseas vacay, here are a couple of questions to ask about your card.

Does it have international transaction fees?

If you’re going to use your day-to-day card for international use, you’ll want to know if and how much you’ll be charged international transaction fees or foreign currency commissions. These pesky little surcharges usually range between 2-4% of each overseas transaction you make with your credit or debit card and depending on how long you’ll be away for, can really add up. Say your credit card comes with a 3% international transaction fee, you’ll have to stump up an additional $1.50 for a $50 dinner. While this might seem like loose change, over the space of a couple of weeks that adds up to $21 in fees for dinner alone.

Luckily for you, Mozo’s travel debit card fee finding tool makes it easy to find out how much you’ll pay in overseas fees. Simply choose the bank and account type and our tool will let you know whether your card works overseas, as well as any fees that apply for using your card overseas. 

Should I use my card at an ATM overseas?

That depends on whether you’re using a debit card or credit card. If you plan on taking your everyday debit card on your next holiday, you’ll generally have overseas ATM fees which can cost as much as $5.50 every time you withdraw. The good news is that, of the 100 plus debit cards in our database at the time of writing, 18 waive this fee entirely so if you plan on taking a year-long trip throughout Europe or backpacking through South America for a while, these cards might best suit you.

On the other hand, if you’re using a credit card abroad there is no way to sidestep the cash advance fee that comes with using these cards at an ATM, even if you preload your plastic with additional funds to avoid interest charges. So maybe you’re better off sticking with your debit card when making cash withdrawals overseas.

Can I use my card to make purchases overseas?

The good news is that, because almost all Australian debit and credit cards are linked to either a Mastercard or Visa network, you’ll be able to access your money pretty much anywhere you go in the world and it’ll be accepted at almost all overseas merchants.

TOP TRAVEL TIP: Some overseas merchants will ask you whether you’d like to pay in Australian dollars or the local currency. If this happens to you, its almost always more economical to say no because, while dynamic currency conversion gives you the option of knowing how exactly how many Australian dollars you’re spending, you’ll generally be charged a less favourable exchange rate than what your bank will charge.

Benefits of using your credit card or debit card overseas

A super convenient and familiar way to pay overseas, using your credit card or debit card also provides a host of other travel benefits that’ll make your trip that little bit more memorable, not to mention affordable.

Rewards points

If you have a rewards credit card, you’ll be able to enjoy your current trip away knowing that every dollar spent is earning you rewards points that you can use to fuel your next overseas odyssey.

Social perks

When you’re travelling overseas, you want to make the most of every moment with special experiences that leave a lasting impression. Believe it or not but your credit card or debit card can actually help do that. The beauty of a high-end credit card and even a few debit cards is the access to global social perk and travel programs like Mastercard World or Visa Premium which gives cardholders access to discounted travel services and exclusive overseas experiences.

Complimentary travel insurance

If you’re using your credit card to pay for you next holiday, you might actually be able to skip out on a standalone travel insurance policy and use the complimentary cover on offer from your card provider. Known as complimentary travel insurance, this cover is usually activated when you pay for a portion of your travel expenses on your credit card - whether that be flights or accommodation - before you leave. If you’re keen to find out more about how this works, check out our handy guide explaining everything you need to know about credit card travel insurance.

Travel money alternatives

Maybe your current credit card or debit card delivers great value for you in your day-to-day life, but you’re starting to realise it won’t be the most cost-effective option for your overseas travel adventures. Not to worry, there are still a couple of popular travel money options to consider for your next overseas holiday.

Prepaid travel cards

Also known as cash passports or travel money cards, prepaid travel cards offer a low-cost, budget-friendly way to spend your money overseas. One of the big advantages with this type of card is that you’re able to lock in your exchange rate before you leave, which means that you know exactly how much you’re spending on every purchase you make while on holiday. You can also load up on more than one currency which is handy if you’re country-hopping and these cards are reloadable which means you can add funds throughout your trip if necessary. Just bear in mind that if you choose to reload via BPAY, it may take a couple of days for the funds to arrive. Prepaid travel cards will also let you access either Visa or Mastercard’s global merchant and ATM network, so your payments will be accepted across the world and you’ll usually be given two cards to use, so if one is lost or stolen you won’t have wait to be able to access your money and keep the holiday rolling.

There are a few cons, though. With a prepaid travel card, you may still have to pay a fee when using overseas ATMs and if you come home with funds still on the card, there are inactivity fees or charges to get your money back off the card.

Foreign exchange

Keeping it old-school and taking a wad of cash overseas is also an option, but unlike the security that comes with a prepaid travel card or travel debit card, it comes at a higher risk. If you are going to use cash overseas, you’ll have to convert it into the local currency first. You can do this at specialist forex providers that offer highly competitive, locked in rates with low fees. Just make sure you plan ahead of time as foreign exchange services at airports aren’t as competitive.

Ready to get started on your travel money shopping journey, whether that be for a credit, debit or prepaid travel card? The best place to start is using our Mozo Experts Choice Awards where we’ve crunched the numbers to give you a shortlist of the best value products on the market for your next overseas adventure.

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