How does foreign currency conversion work for credit cards?
Whenever you make an in store or online purchase or use your credit card to obtain a cash advance, in a currency other than Australian dollars, the transaction will be converted to Australian dollars. When you complete the payment, you might be given the choice to pay in the foreign currency or convert the amount to Australian dollars.
If you choose to pay in the foreign currency, this amount will be converted to Australian dollars by Visa, using the applicable exchange rate on the date the purchase is debited to your account. Remember, exchange rates may fluctuate between the time your purchase is authorised and the time we debit your account.
Under the Visa scheme, if the purchase is made in United States dollars, Canadian dollars, New Zealand dollars, Singapore dollars, Pounds Sterling, Euros or Japanese Yen then the amount will be converted directly into Australian dollars. Purchases made in any other foreign currency will be converted into United States dollars before being converted into Australian dollars.?The?online conversion rate calculator?shows you the indicative rates set by Visa for these conversions.
If you choose to pay in Australian dollars, the merchant will convert the foreign currency into Australian dollars at the time of the transaction. This is called dynamic currency conversion. The exchange rate is not determined by Visa but by the merchant’s dynamic currency conversion service provider.
You won’t incur an international transaction fee , however some merchants may charge additional fees, so choosing this option can be more costly.
You might come across dynamic currency conversion if you’re:
- shopping online with an international merchant and the prices are displayed in Australian dollars, or
- travelling overseas and you’re given the option to pay your hotel or restaurant bill in either Australian dollars or the local currency.
What will I be charged when I withdraw cash from an overseas ATM using my credit card?
When using your credit card to withdraw cash from an overseas ATM you’ll incur the following charges:
- a cash advance fee of $5 or 3% of the value of the transaction (whichever is greater), and
- the cash advance interest rate from the date of the cash withdrawal.
Some overseas banks or ATM providers might also charge you a processing fee. Just like in Australia, the amount of this fee varies depending on the provider. This fee may be charged in the foreign currency.