How to dodge credit card fees while travelling

Co-author Dhayana Sena

Many Kiwis love to travel and many also carry at least one credit card with them. However, not taking the right type of credit card can result in having to pay additional fees that you don’t need. Choosing the right credit card for overseas adventures is an important step to avoid falling into this trap. 

If you′re planning to take a credit card for overseas trips, it pays to do a bit of forward thinking to help minimize additional credit card fees.  Thinking about where and how you will use your credit card while on holiday is important to help get maximum benefit and minimum hip-pocket pain. The last thing you want to do is come home to credit card fees that could easily have been avoided with a little forethought.

Credit card fees to account for while you’re travelling

ATM fees

As many overseas travellers would know, using a foreign ATM machine, that isn’t part of your bank’s preferred global network, can result in a transaction fee each time you use the machine. It can help to jump online before you leave and check out the exact locations of your bank′s ATMS where you’ll be visiting, to avoid getting stung by credit card fees. 

Prior knowledge can save you money and stress. The individual fee to use an ATM of a bank other than your own, may not be a large sum, but the total cost can add up quickly if you do it multiple times! 

Currency conversion fees

A currency conversion fee, sometimes known as a foreign currency conversion fee, is charged when a lender converts New Zealand dollars into a foreign currency in order for a transaction to take place. In basic terms, a currency conversion fee is the credit card charge you get when you use a New Zealand issued credit card to make purchases in a foreign currency. It is one of the biggest ways credit card fees can stack up when travelling. 

The currency conversion fee varies depending on the type of credit card used, however is usually charged at approximately 2.26% of the transaction value

The easiest way to avoid this charge is to use a credit card that has no conversion fee. 

Cash advance fees

When using a credit card overseas, it’s important that you be aware of cash advances. A cash advance is when you use your credit card to withdraw cash. 

Cash advances using your credit card should be avoided at all costs, except in emergencies. This is because, each time you use your credit card to withdraw cash from an ATM, you’ll likely face a lot of extra credit card charges!

Not only will you be subjected to additional fees but you’ll also be charged a significant interest rate as well. 

One way to avoid falling into the cash advance trap is to preload money onto your credit card before you leave home so that your account is in surplus. This way, you won’t have to pay the hefty interest rate. However, you will still need to pay a cash advance fee, as well as local and international ATM operator fees. 

Cash advance rate on your current credit card  not looking too flash? Use Canstar’s credit card comparison tool to search for a new credit card that will better suit your needs. 

Pros and cons of using a credit card overseas


  1. Some credit card providers offer exchange rates that are very close to the actual spot rate. This is especially so for credit cards that don’t charge currency conversion fees.

  2. Funds are available to use up to your credit limit, which can come in handy to pay for big ticket items, such as your airline tickets, hotel bills and car rentals, as well as any emergencies. 


  1. It can be very costly to withdraw from an ATM overseas using a credit card. You may be hit with a cash advance fee and interest will begin being charged as soon as you withdraw the money. This is on top of ATM fees and currency conversion fees.

  2. Because funds are available to use up to your credit limit, you may be tempted to spend more than you budgeted for and may then find yourself paying off your holiday over many months at high interest rates. 

Avoiding credit card fees

It goes without saying that international trips are expensive so, why pay extra to use a credit card overseas?

Whether it′s at the point of sale, the ATM or at the currency exchange office, you can save heaps on fees and charges when you′re overseas by simply being aware of the credit card fees that can be avoided. The tips above should hopefully help you to avoid some of those unnecessary credit card fees and charges. 

Take a look at Canstar’s credit card comparison tool, below, to find the best credit card for you before you set off on your holiday. Happy travels! 

compare credit cards with Canstar

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