Foreign transaction fees explained
4 March 2021
It's fun to travel overseas – or even just to explore the world through online shopping! However, often people don’t realise that their credit or debit card purchases can incur foreign transaction fees. Here's a quick guide to these fees and how you can potentially avoid them with a Suncorp Bank Everyday Options Account.1
What are foreign transaction fees?
When you make a purchase with your debit or credit card from a retailer based outside of Australia, you may be charged a foreign transaction fee to process the transaction. This is sometimes called an FX fee or an international transaction fee. Different banks may have different names for the fees they charge.
Foreign transaction fees are charged because the seller is accepting payment from outside of Australia (even if the seller has a ‘.com.au’ web domain) and the bank is covering the cost of processing the transaction, which can include any fees charged by the card scheme (e.g. Mastercard, Visa and American Express).
Many banks calculate the fee as a percentage of the total purchase amount. For example, if you used an Australian-issued Mastercard to spend the equivalent of AUD$1,000 on a purchase from an online retailer outside of Australia, you may get charged a foreign currency conversion fee of 3% ($30).
Although the fees are relatively small, they can really add up.
With more retailers having moved online, there's more choice than ever. These fees may not be as obvious as when you’ve recently hopped off a plane and you’re physically shopping overseas, so it’s worth being aware of whether your bank charges them.
Suncorp Bank doesn’t charge foreign currency conversion fees on Visa Debit purchases made with our Everyday Options Account.
Types of foreign transaction fees
If you use your Australian credit or debit card (Visa, Mastercard or American Express) while travelling overseas, your bank may charge you a foreign currency conversion fee. This often applies to both:
- making a purchase in-store, including shops, restaurants, bars, etc; anywhere that you’d use your card to pay, and
- withdrawing money from an ATM (you may also be charged an international ATM withdrawal or cash advance fee in addition to the foreign currency conversion fee).
- That means no matter if you withdraw cash as you go, or pay for things with your card as you usually would, if your bank charges a foreign currency fee, you may be hit with it every time you do these things while you are overseas.
Online from an international store or service provider
When purchasing something online from an international brand, whether it’s a fashion label or a streaming service, you may be charged a foreign currency conversion fee. This can get particularly confusing when their website displays prices in AUD, because you may assume the store is Australian-based and that you won’t be charged foreign transaction fees. The website can even look Australian with a ‘.com.au’ web address, but this often won’t tell you where the retailer’s bank is located, which is what matters when it comes to these particular fees.
To help avoid paying foreign currency conversion fees for online purchases, it can be worthwhile double checking where the retailer processes your payments (AUD or otherwise) before making a purchase. This may not be that obvious, especially if you shop across multiple sites, so you may want to ask your bank if they will charge a foreign currency conversion fee on any purchases you make. If your bank doesn’t charge the fee, then you may spend less time reading fine print trying to work out where your payment will be processed and more time considering what you’re actually spending your money on.
Avoid foreign currency conversion fees with Suncorp Bank
Suncorp Bank is proud to make available to eligible customers 0% foreign currency conversion fees on our Everyday Options and Everyday Essentials Accounts. This represents a potential saving of 3%2 on foreign transactions made with your Suncorp Visa Debit Card3 every time you shop online or overseas from a merchant based outside of Australia.
Whether you’re shopping online or travelling overseas, you can confidently use your Suncorp Visa Debit Card knowing you won’t be charged an international currency conversion fee. We will also not charge a Cash Advance Fee for withdrawals at ATMs outside of Australia when you’re travelling.
These fee savings are only available with our Everyday Options and Everyday Essentials Accounts.
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1. A Suncorp Visa Debit Card is required.
2. 3% saving based on foreign currency conversion fee on Everyday Options transaction accounts prior to the removal of the fee effective 24 October 2020.
3. To be eligible for a Suncorp Bank Visa Debit card you must be 16 years of age or older. If not eligible you will receive a Suncorp Bank eftpos card.
Banking Products are issued by Suncorp-Metway Ltd (“Suncorp Bank”) ABN 66 010 831 722 AFSL No 229882. Please read the Product Information Document (PDF) for Personal Deposit Accounts before opening an account. Fees, charges, terms and conditions apply and are available on request.
The information is intended to be of a general nature only and any advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.