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How to avoid international transaction fees

You don't need to lose money on foreign exchange and bank charges while you're overseas.

Here are some useful tips to travel smarter by minimising overseas transaction fees and getting your money's worth while spending overseas.

1. Consider your international payment options

Credit cards can be convenient when you travel, but they usually charge a currency conversion fee. If you withdraw cash at an ATM you could pay a cash advance fee and higher interest rate.

A pre-paid travel money card allows you to top up with the currency you need and lock in the exchange rate. You can also withdraw cash or make purchases in the local currency.

A multi-currency account with a debit card is good for both everyday and international needs. For example, with the HSBC Everyday Global Account, you can: 

  • Buy, hold or spend in up to 10 foreign currencies, with competitive exchange rates
  • Pay everywhere Visa is accepted, with no international transaction fees (non-HSBC fees may apply)
  • Convert currencies anytime via HSBC Australia Mobile Banking App
It's easy to add different currencies to your Everyday Global Account through online or mobile banking.

2. Lock in some local currency before you leave

Save time and convert some of your spending money ahead of time into the local foreign currency. You can keep an eye on the exchange rate and buy when the rate is good. 

If you have a multi-currency account, you can log on and convert your Aussie dollars to any of the available foreign currencies. Then you can withdraw the converted currency from an ATM in your network overseas, or pay for things as you go with your debit card. 

3. Stay in your network to avoid bank fees

If you use an ATM to take out cash while overseas, make sure it's in your bank's network. If you use an ATM from a different bank or a different network, you could be charged a substantially higher transaction fee. In some cases, you'll also be charged an ATM and overseas transaction fee, both by the ATM provider and your own bank for the transaction.

4. Choose to pay in the local currency

Whether using a debit card or a credit card, if you get the option of paying in your home currency or the local currency, always choose local. The merchant's bank or terminal device usually has a much wider foreign exchange spread, compared to your own debit/credit card company making the exchange.

5. Exchange currency during bank hours

You'll usually get the best rates if you exchange currency during bank hours, on weekdays. 

Why are weekends usually the worst time? Currency markets around the world are closed. And since banks don't know what the new rate will be on Monday morning, they charge a slightly higher rate to protect themselves against unforeseen market movements when the market re-opens.

6. Always look for hidden fees

Many currency exchange shops advertise a fantastic rate on the board out front. But make sure you get all the details. Do they have a commission or a charge for each transaction? What is the rate after their commission? Is that good rate only applicable to notes of a certain denomination or from a certain year? Or is there a certain amount you'll have to convert to get that rate?

It's always worth shopping around and asking the right questions. Or avoiding this by exchanging money at bigger banks or post offices. 

7. Go with the bigger brands over smaller shops

If you're going to a bank or a currency exchange centre, choose a big one. Smaller shops often have fewer notes in stock, so they might charge a premium for exchanging. Choosing a reputable brand for your foreign exchange needs will also give you the security that you won't get shortchanged or cheated with counterfeit notes. A big, busy venue with more turnover is a better option, but that might mean you're in for a long queue.

8. Carry less cash where possible

Using credit and debit cards means that you can carry less cash around, which is always a safer choice. Plus, you won't be going home with 'souvenirs' of small bills or coins. With the HSBC Everyday Global Visa Debit Card, you're covered for any fraudulent or unauthorised transactions with Visa's Zero Liability Policy.

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Important information

This article is intended to provide general information of an educational nature only. This information should not be relied upon as financial product advice as it does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of the information to your own circumstances and seek independent legal and financial advice prior to making any investment choice.