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How to Avoid Foreign Transaction Fees with Travel Cards

Travelling abroad can be an exciting experience, but unexpected costs such as foreign transaction fees can quickly add up. These fees, often hidden within credit and debit card transactions, can significantly increase the cost of your trip. Fortunately, with the right travel card, you can minimise or even eliminate these fees, allowing you to make the most of your travels.

Understanding Foreign Transaction Fees

Foreign transaction fees are additional charges applied by banks when you make a purchase or withdraw cash in a foreign currency. These fees typically range from 1% to 3% of the transaction amount and can apply to both in-person and online purchases from international retailers. According to MoneyHub, traditional travel money cards and most bank-issued debit and credit cards impose these fees, which can quickly accumulate during a trip.

Choosing the Right Travel Card

  1. Wise Debit Card: The Wise debit card is highly recommended for travellers seeking to avoid foreign transaction fees. It allows you to hold and spend in over 40 currencies with no ongoing fees and offers mid-market exchange rates. This card is particularly beneficial due to its low fees, averaging around 0.50% on transactions, which is significantly lower than traditional bank cards.
  2. Revolut Debit Card: Revolut offers a multi-currency account with various tiers, each providing a linked low-cost debit card. This card allows you to spend in multiple currencies without incurring foreign transaction fees, making it a versatile option for frequent travellers.
  3. Travelex Travel Money Prepaid Debit Card: This prepaid card supports nine major currencies and does not charge foreign transaction fees when you spend in a currency you hold in your account. It can be collected in-store, providing convenience for last-minute travellers.
  4. Westpac Fee Free Mastercard Credit Card: This credit card offers minimal fees, provided you repay your bill in full and on time, making it a cost-effective choice for those who prefer using credit over debit.

Strategies to Avoid Foreign Transaction Fees

  1. Use Travel-Optimised Cards: Opt for debit, prepaid, or credit cards specifically designed for travel, as they typically offer no foreign transaction fees. Cards like Wise and Revolut are excellent choices due to their competitive exchange rates and low fees.
  2. Pay in Local Currency: When given the option, always choose to pay in the local currency rather than your home currency. This avoids additional conversion fees and ensures you get the best exchange rate available.
  3. Plan Ahead: Apply for a travel card well before your trip to ensure it arrives in time. Consider the approval and delivery time, which can take up to two weeks.
  4. Avoid International ATMs: While convenient, international ATMs can incur high fees. Instead, use your travel card to make purchases directly, or withdraw cash in larger amounts to minimise fees.

Avoiding foreign transaction fees is achievable with the right preparation and choice of travel card. By selecting a card that offers no foreign transaction fees and using it wisely, you can save money and focus on enjoying your travels. Whether you choose a debit, prepaid, or credit card, ensure it aligns with your travel needs and provides the best value for your spending habits. With careful planning and the right tools, you can make your overseas adventures more affordable and stress-free.

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