Credit Cards That Charge International Transaction Fees on AUD Purchases Made with Overseas Merchants

bluesky on 15/01/2016 - 17:47
Last edited 15/01/2016 - 17:49

Hi All,

Recently Citibank sent out an email :

"From 18 January 2016, you will be charged an International Transaction Fee on transactions made with an overseas merchant in AUD. We currently charge this fee only on transactions made with overseas merchants in their local currency."

In the past, if a purchase was quoted in AUD, I just assumed no foreign fees will apply. Not anymore. I also vaguely remembered reading that some online stores, and ebay stores may in fact process the payment in AUD but overseas, and hence, be considered overseas merchants(?).

In such cases, from now on I will try to use a card that will not charge this fee.

What is the general situation at the moment, when it comes to AUD purchases from overseas merchants, for other cards, e.g.

  • Amex cards (e.g. Qantas Discovery)
  • Coles credit card
  • Credit cards by banks
  • Debit cards from banks
    etc

I know 28 Degrees credit card does not charge this fee either.

Many thanks for your input.

Financial

Comments

  • [Deactivated] on 15/01/2016 - 17:53
    +2

    You'll probably find that's not the case with the Citibank Plus account.

    • bluesky on 15/01/2016 - 17:54
      +1

      Oh yes, the Citibank email pertains to the Citibank credit card, not the citiplus debit card. Thanks.

      • [Deactivated] on 15/01/2016 - 17:56
        +1

        It might cover other debit cards too, but I'm 99% sure there will be some fine print somewhere that excludes any cards linked to a Citibank Plus account.

  • bonezAU on 15/01/2016 - 17:55
    +2

    I use a Bankwest Platinum and usually buy everything in the local currency when shopping overseas or online, just let Mastercard do the conversion. Of course I check first because some sites offer a better conversion if you pay in AUD than letting Mastercard do it.

    If I am overseas I never let them process anything in AUD, I always choose the local currency.

    Likewise with my Citibank Plus account. The only thing I use my Bankwest transaction account (with MC debit) for is my salary/bills/living expenses and local/australian online and offline purchases because screw them and their 3% international fee.

    • bluesky on 15/01/2016 - 18:05
      +1

      Yes, I just did a quick check here
      http://www.infochoice.com.au/banking/credit-card/bankwest-ze…

      It looks like Bankwest Platinum is like the 28 Degrees CC - with no foreign transaction fees at all.

      • bonezAU on 15/01/2016 - 18:09
        +1

        Correct. There's also the Coles rewards card (might be platinum only, I forget) that offers no international transaction fees.

        Purely an observation only, don't know if anyone else with a 28deg or BW Platinum has noticed this or not. Over the Christmas break I was overseas and I made a credit purchase in a shop with my BW Platinum mastercard, then about 5 minutes later I used my Citibank Visa debit to withdraw cash from the ATM at the same place.

        The currency conversion rate I got from the Mastercard was absolutely crap compared to what I got from Visa. Yes I am aware they both set their own independent rates, but I wonder if the Mastercard rate is often less than Visa, or if it just happened to be on that day. Anyway, I will be more careful and check both rates next time, especially if I am planning to make a large overseas purchase with the credit card.

        • bluesky on 15/01/2016 - 18:15

          My understanding of this is all wrong then. I used to think they are all very close to the XE rates (except for a little difference).

          If you are going to check and compare, are their rates for the day easily available?

        • bonezAU on 15/01/2016 - 18:27
          +1

          @bluesky:

          They aren't always super close to the XE rates. In fact, there's been times when I've been overseas and have got a higher rate from my Citibank Plus card than what the official XE rate was showing. I have the XE widget on my phone so always keep an eye on it.

          Visa and Mastercard will generally adjust their rates several times a day, sometimes they will be quite conservative and other times the live XE rates can change quickly and they will be slow to adjust their rate to catch up.

          You have to remember, Mastercard & Visa are businesses and are in it to make money too. That's why you don't get the "official" rate, 9 times out of 10 you will get a bit below that, so they have some profit to skim off the top of each transaction.

          Mastercard rates: https://www.mastercard.com/global/currencyconversion/index.h…
          Visa rates: https://usa.visa.com/support/consumer/travel-support/exchang…

          Tip: for Visa, under the "My card is in" choose the foreign currency you're going to be using, then when it says "My transaction was in" choose AUD. Otherwise the conversion will be the wrong way around.

          I swear I used to be able to find a Mastercard site that included more currencies, but I can't find it atm.

        • bluesky on 15/01/2016 - 18:28

          @bonezAU: Thanks, these are very useful insights :-)

        • Meho2026 on 16/01/2016 - 07:29
          +1

          Ive got a 28 Degrees and a BW Platinum, the BW always gives a worse rate of exchange. Ive tested it with identical transaction amounts on the same day. The Citi Plus often gives a higher rate with $US

        • Jared17 on 17/01/2016 - 00:16
          +1

          @bonezAU: yes. I remember being surprised to learn I got a better rate than XE using my Citibank Plus debit card overseas

        • bonezAU on 17/01/2016 - 19:18

          @kenh2003:

          Thanks, so it looks like Bankwest is skimming off the top. Next time I make an online purchase from overseas I will check Mastercard's official rate, then see what Bankwest gives me. I'd better read the PDS to see if it makes any reference in there, if not I will be calling to complain :)

      • chinezejew on 15/01/2016 - 18:35
        +1

        28degrees for international purchases.
        Citibank visa debit for cash at atm overseas.

        I wonder if i can get a Bankwest platinum too?

        • bluesky on 15/01/2016 - 18:44

          The Bankwest platinum even offers travel insurance, something the 28degrees doesn't do.

        • chinezejew on 15/01/2016 - 19:01

          @bluesky:

          That's a good extra.
          But id be purchasing with Anz Platinum amex hoping to gain more ff points.

          Use 28degrees only when purchasing in international currency.
          Probably try get a bankwest one and lend it to my parents when they head overseas.

        • bluesky on 15/01/2016 - 19:04

          @chinezejew: Since you have an amex card (albeit anz-branded), do you know if they will charge foreign fees if the transaction is in AUD but with an overseas merchant? (my original question of this post :-))

          I have an amex qantas discovery card, and am wondering if this fee applies. Thanks.

        • chinezejew on 15/01/2016 - 23:13
          +4

          @bluesky:

          I don't think the conversation rate works in your favour paying in Aud from overseas merchant.

          Havnt used my qantas discovery overseas before so i cannot confirm the internation transaction fee even though done in Aud.

          Be careful paying in Aud from any overseas merchants. Do a quick calculation with mastercard global. You will find the merchants system will already have taken a cut from the exchange rate.
          And then you may also get charged for internation transaction fee.

          I haven't been able to find a better deal than paying everything woth 28degrees.
          Cash withdrawal with Citibank visa debit.

          In summary i found paying for purchases internationally with 28degrees in the merchants local works out cheapest out of my pocket.

        • aussieboozer on 16/01/2016 - 13:54
          +1

          @bluesky:

          I have a Westpac Earth Black Amex and there are no foreign fees on AUD transactions with overseas merchants. They brought this in a while ago and I only really noticed because my monthly spotify debit stopped getting hit with a 3% conversion charge

    • HeWhoKnows on 16/01/2016 - 09:06
      +2

      I also have the Bankwest Platinum MasterCard. Best credit card in Australia by far. Especially the ZERO version if you pay your balance off each month. Free travel insurance, no annual fee and no foreign exchange fees. Hard to beat.
      I also have the Citibank Plus account. Best debit card to take overseas if you need to make a withdrawal overseas. Again no foreign exchange fees and no ATM withdrawal fees if you use a Citibank ATM overseas. Bloody beautiful!

  • furyou on 22/01/2016 - 22:37
    +1

    Well the Bankwest Platinum MasterCard has an annual fee, and sounds like from users they have a surcharge over the official MC/Visa rates. This is for Citi users who got the no fee for life deal.

    No idea how its rewards are vs Citi. 28deg is there for no reward no fees card. Paywave -> ing. Just need an all in one to replace citi cuz how the (profanity) would I know if a merchant is local? (Eg google.com.au charges AUD but is NOT local)

    • bluesky on 22/01/2016 - 23:01

      Yes, that is the crux of the problem - sometimes whether the merchant is local or not is not entirely obvious. Especially when the transaction is advertised in aud.

      Unless we are sure the merchant is local, better to avoid using the citi credit card (for those of us who have this), despite the reward points.

  • illumination on 24/01/2016 - 00:51
    +1

    To answer one of your questions from the OP, I have never seen any AMEX which does not charge any international fee/forex fees a la 28 Degrees/Citibank Plus/Bankwest Platinum. There are a handful of cards that offer an increased points earn rate on overseas purchases though, but I often still don't consider them as viable options because the additional points are still worse than using 28 Degrees/Coles MC/BW Plat/Citibank.

    Other people above have covered your other questions though.

    I often think of the Bankwest Platinum as a beefed up version of the 28 Degrees. It's still a Mastercard (surprised to hear from some of the comments above about differences in rates though, given they are both Mastercard), and it is pretty much better in every single way. The only disadvantage of the BW Platinum is that it is harder to get (income requirement). BW Platinum also has no price protection, but it's an optional add-on to the 28 Degrees.

    There are 3 cards I can think of on the market that earn you points on overseas purchases without incurring international transaction fees:

    • Coles MC - $89 - FlyBuys
    • Bankwest More Plat MC - $140 - BW Rewards
    • Bankwest Qantas Plat MC - $160 - QFF Points
    • bluesky on 24/01/2016 - 01:14

      Thanks for the info, very helpful.

    • MathNerd on 27/08/2017 - 16:38

      Hey illumination, sorry for digging up such an old thread, but thought I'd use your expertise here.
      My partner just got an Amex explorer, and wants to make a purchase at Etsy (like eBay but for arts & crafts). Pretty sure that Etsy has its head office in the UK/Ireland.
      The sellers that she purchases from are mostly located in Australia (Hence pricing their products in AUD). However since they use Etsy's payment processor which I presume is overseas, even though the transaction is in AUD I'm worried that Amex will charge a 3% fee.
      Do you have any experience with this, where the transaction is completely AUD but processed overseas, as the Amex site simply mentions the fee is charged when foreign currency is charged to the card.
      I am aware that Amex is not a participant in DCC but not sure if this makes a difference.
      Thanks in advance!

      • illumination on 28/08/2017 - 10:32

        Hey, no problem I don't mind.

        I have heard of transactions that are in AUD still getting hit with a 3% fee and as you mentioned it does indeed seem like it is something to do with where their payment processor is based. I recall reading comments here in the past of people having such an issue with Groupon. The solution was to pay via PayPal (as opposed to typing your credit card details straight in) as the amount payable would be locked in.

        I only have one similar experience where the amount was initially shown to me in AUD, but was ultimately charged in a foreign currency. I called up the bank and they issued me with a partial refund for the fee as I argued that the amount was initially shown in AUD before ultimately being charged in some other currency, which I was not aware of until the transaction cleared. This is slightly different to what you're saying, because you're referring to a situation where you are actually charged AUD yet still get hit with a overseas transaction fee - which I do not have any personal experience with. Whenever I see an AUD amount, I pay with AUD without considering whether there will be a overseas transaction surcharge because of the fact that it's in AUD.

        AMEX are known for great customer service. If they hit you with the surcharge, I get the feeling you might be able to get them to refund the difference on the basis that the charge was in AUD. I would certainly expect it… but make sure you take screenshots of the payment process.

        • MathNerd on 28/08/2017 - 18:48

          Thanks mate for the detailed reply. Will wait for the transaction (done yesterday) to post through from pending status and see how it goes. Fingers crossed it's all good! Thanks again :)

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