Everything you need to know about overseas card charges

Date 331addf45bb3516008aff5fb298ee62ac379c2c3a2b3907f5779c303044d921a Jul 14, 2020
Blog category fe5ce5147ae753a2d3756d369ad2708a946a9a272087e636187c73e45c076f93 Credit Card
Blog category fe5ce5147ae753a2d3756d369ad2708a946a9a272087e636187c73e45c076f93 Travel Insurance


Overseas trips can be the highlight of the year as you’re able to get away from everything and enjoy yourself whether that be through relaxation or going on exciting adventures. However, as we all know, trips cost a lot of money.

Not only do you have to book accommodation, flights and rental cars but there are also other things you have to pay for when you’re at your destination. It’s very easy to become complacent with your credit card and just swipe it for absolutely everything you need to pay for.

However, what you may not know is that everytime you use your card, you’re being charged a conversion fee for using it overseas. This can add up and make your trip very expensive.

Comparing credit cards in NZ can be a good way to ensure that you’re getting the very best out of your credit card, but what else can you do?

You’re probably wondering what else you’re not aware of when it comes to overseas card charges and how you can avoid them. Luckily, we’ve created a guide just for this purpose so you won’t have to break the bank just to go on holiday!

Man using his credit card overseas while incurring the currency conversion fee

How does foreign currency conversion work?

Whenever you make a purchase in an overseas country using a New Zealand credit card, the amount will need to be converted from New Zealand dollars to the currency of the country you’re in. Because of this, often your bank will charge you a conversion fee for them transferring the currency.

The amount you’re charged ultimately depends on the type of credit card you have and which credit card provider you’re with. For example, BNZ’s credit cards charge a 2.25% fee of the NZ dollar value whereas Westpac’s credit cards charge only 2% of the fee. 

How to avoid currency conversion fees

The answer here is fairly obvious - avoid using your credit card overseas! While this may seem quite difficult, there are other ways you can pay for things overseas without incurring a charge or with too much hassle.

You can make sure prior to going to your destination that you have enough cash in that currency to last you the entire trip which you can then use to pay for everything instead of using your credit card.

Cash will also help pay for things at places where cards are not accepted as a form of payment. In the end, these forms of payment can save you lots of money and you’ll thank yourself later.

If you’re not too fond of keeping cash around in your pockets throughout the entire trip, don’t fret! You can also get prepaid travel money cards which allows you to load and spend money in multiple currencies.

This way you can spend money in those countries that have those currencies and avoid the credit card fees that you would get if you were using a credit card. 

What credit cards are the best for overseas holidays

If you’re just like everyone else and hate the idea of paying a conversion fee on everything you buy with your credit card overseas, you can choose to get a 0% foreign fee credit card.

This card will waive the usual cost of the currency conversion fee so that you won’t have to pay anything on your transactions.

This will be extremely useful if you’re a regular spender when overseas or if you online shop from overseas companies often. 

One thing to keep in mind however when getting a 0% foreign fee credit card, is that these cards may still charge an annual fee, and they can be quite hefty.

You should make sure before getting this card that the benefits and the advantage of not having to pay a fee when you purchase overseas outweighs this annual fee.

The debit card that TransferWise have recently released is a great option for people going abroad as it work in multiple currencies and has extremely low fees - what a great deal!

When you compare credit cards in NZ, you may also want to consider overseas ATM withdrawal fees. Getting cash out of an ATM can attract a small fee which can add up to quite a bit if you’re spending a fair bit on your holiday.

This is why before you go overseas you might want to apply for a credit card that doesn’t charge for overseas ATM withdrawals so that you can make withdrawals without having to worry about the cost. 

Many credit cards offer travel benefits whether it’s Airpoints, extra airport access or travel insurance, and they can all be beneficial to your trip and could help you save loads of money in the long term.

If you have one of these cards already, you should make sure to take advantage of them as much as possible by using your credit card when you can to accumulate these benefits

Is it a good idea to use Dynamic Currency Conversion? 

Dynamic Currency Conversion allows you to pay for things overseas with the currency that your credit card is on. So if you have a New Zealand credit card for example and you buy something from America, you can pay for it in NZD instead of having to convert in USD.

The Dynamic Currency Conversion has its perks as you’re able to see exactly how much you’re paying for something in the currency that you’re most familiar with, and you won’t have to go through the trouble of converting it into the local currency.

However, the Dynamic Currency Conversion also has a DCC fee that can range from 3-10% which can make the purchase more expensive than it would be to buy in the local currency. 

So to sum up Dynamic Currency Conversion, it can be quite useful and in the end, if your currency has improved against the foreign currency then it might be worthwhile to use it.

Otherwise, you can avoid the DCC fee by simply researching the exchange rates prior to buying the item or you can even use a currency converter online at the time you’re making the purchase. 


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