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Currencies & Fees

Anyone who’s travelled internationally and used a credit card to buy something knows about those pesky foreign transaction fees that are applied to every purchase.

 

An international transaction fee is charged to you, the consumer, by your credit card company whenever you buy something in a foreign currency. And while most of these charges are applied to travellers, they can also be added to your credit card bill when you make a purchase online from a foreign vendor.

 

In other words, anytime a credit card is used to make a purchase and the transaction needs to be processed into the local currency of the seller, you’ll incur a foreign transaction fee. 

How much should you expect to pay in fees?

The average international transaction fee will be around 3% for purchases made in US dollars. 1% of that fee may go to the payment processor, whether it’s Visa or MasterCard, and the other 2% might go to the bank that issued your credit card, such as Chase or Bank of America.

 

You might be thinking that 3% doesn’t sound too bad, but these fees can quickly add up if you’re making a lot of small purchases or you’re making large purchases. For example, if you spend $100 and your fee is 3%, you’ll spend an extra $3, but if you spend $1,000, you’ll be paying an extra $30 in fees.

 

On top of that, most credit cards charge a 3-5% margin on the daily interbank or market exchange rate for the day. For many cards, this rate is at their sole discretion, and you may not know how big that margin is in advance.1 When combined with the fees, you could be paying at least a 6% premium on your purchase by using your credit card. Ouch.

A few ways to avoid international transaction fees

There are some ways that you can avoid costly international transaction fees:

 

  1. Check your credit cards’ terms and conditions. You might have a card that doesn’t charge these fees. Use that card whenever you’re planning on purchasing products from abroad, as well as when you travel.

  2. If you don’t have a card that doesn’t charge a fee but you make a lot of international purchases, it would be wise to apply for credit cards that don’t charge these fees.   

  3. Avoid high international transaction fees by using OFX to send money rather than using your credit card. Whether booking a hotel or purchasing a luxury item, ask your vendor if they accept payment direct to their bank account. If they do, you can use OFX to dramatically reduce your international transaction fees and exchange rate margins. Plus, you can make transfers 24/7--on your own schedule, not your bank’s.

 

International transaction fees can make shopping more expensive than it has to be, but if you know your way, you can outsmart your bank and save yourself a lot of money.

 

P.S. If you’d like to know more about OFX’s award-winning security and fraud prevention methods, check out our security page.

 

Sources:

  1. https://www.bankofamerica.com/deposits/manage/how-to-pay-when-traveling-abroad.go

 

Lots. With 115 bank accounts in our global network and 50+ currencies (and counting) to make a transfer with, chances are you can OFX it.

Along with all the major global currencies, we have a wide range of exotic currencies to choose from. Simply select your currencies to transfer with in our currency converter and we’ll tell if you can make a transfer and how long it should take.  

Below is a full list of our supported currencies.

Standard 

AED United Arab Emirates Dirham
AUD Australian Dollar
CAD Canadian Dollar
CHF Swiss Franc
DKK Danish Kroner
EUR Euro
GBP Pound Sterling
HKD Hong Kong Dollar
HUF Hungarian Forint
ILS Israeli Shekel
JPY Japanese Yen
MXN Mexican Peso
NOK Norwegian Kroner
NZD New Zealand Dollar
PLN Polish Zloty
SEK Swedish Kroner
SGD Singapore Dollar
THB Thailand Baht
TRY Turkish Lira
USD US Dollar
ZAR South African Rand

Exotics 

AZN  Azerbaijani Minat
BGN  Bulgarian Lev
BHD  Bahraini Dinar 
BND Brunei Dollar
CNY* Chinese Yuan Renminbi
CZK Czech Koruna
EGP  Egyptian Pound
FJD Fiji Dollar
IDR Indonesian Rupiah
INR Indian Rupees
KRW South Korean Won
KWD Kuwaiti Dinar
LKR Sri Lankan Rupee
MAD Moroccan Dirham
MGA Malagasy Ariary
MYR Malaysian Ringgit
OMR Omani Rial
PEN Peruvian Nuevo Sol
PGK Papua New Guinea Kina
PHP Philippine Peso
PKR Pakistan Rupee
   
SAR Saudi Riyal
SBD Solomon Island Dollar
SCR Seychelles Rupee
TOP Tongan Pa anga
TWD Taiwanese Dollar
TZN  Tanzanian Shilling
VEF  Venezuelan Bolivar Fuerte
VND Vietnamese Dong
VUV Vanuatu Vatu
WST Samoan Talar
XOF CFA Franc
XPF CFP Franc

*Business customers only

https://www.youtube.com/watch?v=juB3O_LnPO8

 

The short answer: it depends on who sends your money. All banks and money providers have different fee structures, and they all take different margins on the daily exchange rate. Depending on the size of your transfer, you could save hundreds of dollars by comparison shopping before you send money with your bank.

 

There are a host of reasons why you’d need to send money internationally. You might be paying for a destination wedding, purchasing an overseas property or adding a coveted item to your collection from a dealer overseas.

 

 

 

 

But how much will it cost to send  money internationally? Let’s break it down.  

1. Money transfer fees can vary greatly depending on your provider

 

 

Whenever you send money internationally, your bank will typically charge a fixed money transfer fee. You could pay up to $50 to transfer the money, but the fee will depend upon the bank that you’re using, as well as how much money you’re sending.  

 

 

Some banks will charge a different rate depending upon the currency in which your money is sent, so you might pay a higher fee if you send the money in Aussie dollars rather than in your recipient’s local currency. If you want your money transfer expedited, you might incur yet another additional fee. Sheesh!

 

If you’re using a money transfer service, some fees depend on how you’re sending the money, whether it’s from a funded account, a credit card, or a debit card. This percentage can range from 0.5% to 3.9%. And that’s not the end of it.

 

2. Watch out for the margin on the exchange rate

 

In addition to the international transfer fee, a margin on the daily exchange rate is also tacked on to most foreign transfers. This rate is typically around 5% at most major banks, so if you’re sending $10,000, you may have to pay up to $500. Yikes. At OFX, we know you could buy a lot with $500, so we keep our exchange rates and fees substantially lower than other money transfer providers.

3) Your recipient may also be charged to receive foreign payments

On top of all the other costs above, many banks charge their customers between $15 and $30 to receive international transfers. At OFX, we use our global network of local bank accounts to move your money at the local level in an effort to reduce these fees. Sometimes, that means your recipient may be charged less by their bank to receive the funds when you use OFX.

 

So how much does it cost to send money internationally?

The answer is, it depends on the company you use. Rather than using a bank and paying excessive fees to send your money internationally, make the smart move to OFX.

 

 

In addition to being able to book a transfer 24/7, you’ll pay a small standard fee of $15 for transfers under $10,000 at OFX. And if you’re transferring over $10,000, you won’t be charged a transfer fee by us. Plus, OFX delivers a much more competitive exchange rate, so you can save on the exchange rate margin and keep more of your money.*

 

 

With options like OFX, there’s no need to rely on your bank anymore to send money, so now the only question is: what are you going to do with all that extra cash?

 

 

*Average savings based on published rates of ANZ, Westpac, NAB and CBA on a single transfer of AUD$10,000 to USD between 1.9.17 and 5.10.17 excluding weekends. Transaction costs excluded. Quoted savings are not indicative of future savings. Please consider OFX’s PDS and your circumstances before making a decision about any financial product.  

 

Sources:

 

 

At OFX we have one standard fee of AUD 15 if you’re transferring under AUD 10,000. If you’re transferring more than AUD 10,000, we won’t charge you a transfer fee. (Yes, it’s that simple!)

Occasionally, third-party banks may deduct a fee from your transfer before paying your recipient. This fee may vary and OFX receives no portion of it. If you’re concerned, simply talk to one of our team members to discuss your transfer.