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The Best Travel Debit Cards for Australians

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Tom Goward | 07/09/2020

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No matter where you’re going or for how long, making use of a good travel debit card is one of the easiest ways to save money when travelling overseas. While airport currency exchange booths and your day-to-day bank may be convenient, they’ll often rip you off. That’s because they often charge exorbitant currency exchange fees, some of which are hidden in poor exchange rates while advertising “0% commission” or “zero fees”. Although, with a little research and planning, you can save a considerable sum just by using the right card!

Not all travel cards are created equal

Generally speaking, there are three main fees associated with using your day-to-day debit or credit card overseas:

  • Foreign transaction fees: Charged on any purchase made with an overseas merchant, often as a percentage of the transaction amount. Typically, these fees are around 3%.
  • Overseas ATM withdrawal fees: Most would be familiar with this one. Overseas ATM fees are often a fixed amount charged for the privilege of withdrawing your own money. Plus, some overseas ATM operators will charge an additional fee on top of your bank. How fun!
  • Foreign Exchange Markup: While you may think you’re getting the real exchange rate (the one you’d find on Google or XE) oftentimes banks will set their own rate which includes a hidden fee on top. Of course, you will only be shown the “final” rate to hide these fees.

What about prepaid travel cards?

You’ve probably heard of travel money cards before. They are somewhat similar to your everyday debit card, and often popular among novice travellers. Travel money cards work by allowing you to preload the foreign currency you wish to spend, thereby locking in the exchange rate. While some travellers like the peace of mind that comes with knowing exactly how much foreign currency you have, if the exchange rate changes in your favour, you could lose out big time. Things get even worse when you consider the hidden foreign exchange markup fees. The reality is, no one (not even the best traders) know which direction a currency pair is going to go so there’s no point trying to guess the right time to buy currency.

At Flight Hacks, our goal is to help you travel better, which is why we wouldn’t recommend using a travel money card as your first option. In truth, most of the pre-paid “travel” branded cards are some of the worst options out there. A good debit card with overseas features will always outperform a travel money card. So, unless you have good reason to believe the exchange rate is about to tank, I wouldn’t see it as a benefit myself.

How much can I save using a good travel debit card?

Well, that’s a hard question to answer. Your savings will depend on the fees associated with your day-to-day card, how much you spend and where you spend it. But, for the purpose of this article, here is an example between a typical Australian debit card and the ING Orange Everyday.

Withdrawing £200 from an ATM

 Regular Debit CardING Orange Everyday
Visa Exchange RateA$368.27A$368.27
ATM Fee (your bank)A$5.00A$0.00
ATM Fee (provider)A$5.00A$0.00
Conversion FeeA$11.05A$0.00
TOTALA$389.32A$368.27

Spending £200 on a card

 Regular Debit CardING Orange Everyday
Visa Exchange RateA$368.27A$368.27
Conversion FeeA$11.05A$0.00
TOTALA$379.32A$368.27

Foreign exchange rates: Visa vs Mastercard

While Visa and Mastercard don’t offer cards themselves, they do have a say in determining the foreign exchange rate you’ll get. While most big banks set their own interest rates, some run off the exchange rate of the payment network instead. That’s relevant here as many of our top picks use either Visa or Mastercard’s exchange rates, without applying any markup (generally speaking, Visa and Mastercard offer the best exchange rates available for consumers). So, who offers the most bang for your buck?

The good news is that there isn’t much of a difference between Visa and Mastercard, so there isn’t too much reason to pick one payment network over the other. While Mastercard tends to outperform Visa, the margin is quite insignificant until you start spending large amounts overseas. The table below shows how much Visa and Mastercard offered for $1 AUD at the time of writing (23 August 2020).

 VisaMastercard
USD0.710.72
EUR0.610.61
GBP0.540.55
NZD1.091.10
SGD0.980.99
HGD5.535.59
JPY75.6476.26

Are Frequent Flyer debit cards worth the cost?

Qantas Travel Money (issued by Heritage Bank) and Velocity Global Wallet (issued by Rêv Australia) both offer similar travel money cards which allow customers to earn points on their spending. Within Australia, both offer 1 point for every A$4 spent. For international purchases, Qantas offers 1.5 points where Virgin Australia offers 2 points for every A$1 equivalent spent in foreign currency. Each offers 10 currencies and zero account keeping fees.

The kicker comes when you take a look at the exchange rates. Both Qantas Travel Money and Velocity Global Wallet offer comparably terrible rates, which add up once you start spending large amounts. Additionally, Qantas will slap on an overseas ATM fee for the privilege of withdrawing your money.

The table below shows how much Qantas Travel Money offered for $1 AUD at the time of writing (23 August 2020), compared to that of Mastercard.

 MastercardQantas Travel Money
USD0.720.69
EUR0.610.57
GBP0.550.51
NZD1.101.04
SGD0.990.92
HGD5.595.22
JPY76.2671.19

Our favourite travel debit cards for Australians

Up Debit Card

  • Currency Conversion: Mastercard rate
  • Overseas Transaction Fee: $0
  • Overseas ATM Fee: $0
  • Foreign Exchange Fee: $0
  • Account Keeping Fee: $0

What we like: Speedy setup and excellent app features. Great currency availability and good exchange rate.

Exclusive Deal: Get $10 cash in your new Up account!

ING Orange Everyday

ING Orange Everyday

  • Currency Conversion: Visa rate
  • Overseas Transaction Fee: 0% (2.5%)
  • Overseas ATM Fee: $0 ($2.50)
  • Foreign Exchange Fee: $0
  • Account Keeping Fee: $0

What we like: If you deposit at least $1000 and make at least 5 payments each month ING will waive international transaction fees and refund overseas ATM withdrawal fees.

Citibank Plus Account

 

Citibank Plus Account

  • Currency Conversion: Mastercard rate
  • Overseas Transaction Fee: 0%
  • Overseas ATM Fee: $0
  • Foreign Exchange Fee: $0
  • Account Keeping Fee: $0

What we like: Citibank’s worldwide presence. Free bottle of wine at partner restaurants, as long as you pay with your Citibank card.

Xinja Bank Account

Xinja Card

  • Currency Conversion: Mastercard rate
  • Overseas Transaction Fee: 0%
  • Overseas ATM Fee: $0
  • Foreign Exchange Fee: $0
  • Account Keeping Fee: $0

What we like: Fast setup and straightforward app. Add funds right from the Xinja app.

TransferWise Borderless Account

TransferWise Card

  • Currency Conversion: TransferWise rate
  • Overseas Transaction Fee: 0%
  • Overseas ATM Fee (up to A$350/month): $0
  • Overseas ATM Fee (over A$350/month): 2%
  • Foreign Exchange Fee: $0
  • Account Keeping Fee: $0

What we like: One of the very few currency exchange services that offer a real mid-market rate (the rate that banks use to trade between themselves).

Want to know more about the TransferWise Borderless Account? Check out our review!

Macquarie Platinum Transaction Account

Macquarie Platinum Transaction Account

  • Currency Conversion: Mastercard rate
  • Overseas Transaction Fee: 0%
  • Overseas ATM Fee: $0
  • Foreign Exchange Fee: $0
  • Account Keeping Fee: $0

What we like: Simple, clean banking app. Discounts of up to 10% on eGift cards with Macquarie Marketplace.

Summing up: my top tips

  • Never let the ATM or EFTPOS machine charge you in Australian dollars. While it can sound like you’re getting a better deal and avoiding fees, it’s all too common for merchants to use their own terrible foreign exchange rate to convert the local price to Australian dollars. Plus, they’ll often add their own fees on top of this already poor exchange rate. By paying in the local currency, your card provider will use their own exchange rates, almost always leaving you better off.
  • Watch out for fees applied by ATM providers themselves. While most good travel debit cards advertise zero ATM fees, that doesn’t stop ATM operators charging their own fees. Most of the time, the machine will tell you before charging a fee, plus, ING refunds fees charged by operators provided you meet certain conditions. Not all ATM operators charge fees, but most do.
  • Be sure to have multiple card options ready. It is a good idea to have a few good cards ready incase one is stolen, lost or faulty. We have listed our top six travel debit cards for Australians below, all of which have zero account keeping fees. By keeping a few of these on hand, you’ll be prepared for anything!!
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Tom Goward

Tom is a Hobart-based writer with a passion for aviation and travel.

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