Why You Should Never Pay In AUD Overseas

Australia is the lucky country. Despite what you might experience with your day-to-day transactions, nobody is generally trying to scam you out of your money. So, what’s the main advice we hear from pushy when paying with credit cards overseas?

“Here sir/madam, you can choose pay in your home currency.”

You see two options on the terminal screen, pay in AUD or the local currency. ‘How convenient’, you think, having just a rough grasp on the exchange rate on any given day. ‘I’ll pay in Aussie dollars.’ Wrong. After reading this article, and every time you go overseas from now on, you’re going to stop hitting that AUD button. Here’s why.


The obvious one – it costs more. Vendors are not offering you DCC (dynamic currency conversion) for your convenience; they’re offering you DCC because it puts money back in their pocket. Remember when businesses neglected to make the switch to EFTPOS in the fear of losing profit? Well now they are making that profit back from ignorant foreigners who haven’t read this article.

The exchange rate will always be poor when you select AUD at a payment terminal. The purchase of a coffee might seem minimal, but you can expect to often pay a 5% increase on your DCC. A $100 night out suddenly hits $105, for no good reason. And how many nights are there in a week? (It’s seven). And how many weeks have you spent abroad tapping that AUD button like a naïve fool? Too many. For arguments sake, say you drop $3,000 on a hotel for a week – pressing the AUD button at checkout will see you pay at least $150 more for you stay.

Just like the surcharges you find back home for using AMEX or Paywave, foreign businesses are slyly reaching in to your pockets with the DCC. And here is some more bad news: selecting AUD won’t waive the international transaction fee, which averages 3%, depending on your bank. There’s an immediate 8% surcharge on your purchase. I’m no mathematician, but those numbers ain’t good.

Pro-tip: ING’s Orange Everyday account automatically refunds any international transaction fee.

Bonus Points

Banks and credit card providers have long observed that customers who like to travel also like to rack up frequent flyer points. Who knew? If you’re a world-class traveler, some cards such as the Qantas Premier Platinum Mastercard can offer upwards of a 50% boost to your international purchases.

RELATED: ‘Overtourism Impacts Us All’

However, you can wave goodbye to that welcome raise in points once you’re paying with AUD overseas, even though you are physically in another country. So, if you’ve got the chance, earn more points! Stop paying in AUD overseas.

Here’s an example of a $1000 day at the shops, paying in AUD in comparison to the local currency:

AUD: $1,080 ($30 international transaction fee + $50 dynamic currency conversion). 1,000 frequent flyer points.

Local: $1,000 (using an international transaction fee-free card). 1,500 points.

We’ve all ‘misplaced’ cash overseas. Don’t get scammed on your credit and debit card transactions.

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