How to avoid getting stung by bank fees while overseas

Japan, New Zealand, Indonesia - wherever the destination, it's no secret that Australians love an overseas holiday, and it appears that 2026 isn't going to be any different.

Roughly one in three Australians - the equivalent of 7.3 million people - are planning a trip abroad in 2026, according to a recent survey undertaken by Finder.

Travelling internationally isn't a cheap exercise though. Australians are budgeting $7310 on average for a two-week holiday overseas, research recently released by ING reveals.

Much of that travel budget will go towards essential costs like flights, accommodation and activities, but one area that travellers are unlikely to be happy about forking out money on is banking fees.

So, for people planning to take some time off for an overseas holiday in 2026, which banking fees and card costs can be avoided?

1. Foreign exchange fees on debit and credit cards

In the 12 months to August last year, ING research found that Australians lost around $600 million to international transaction fees alone.

These are common fees attached to debit cards and credit cards which crop up when users make transactions outside of Australia (even online) or in a foreign currency.

"International transaction fees and exchange rate mark-ups on debit and credit cards can add up to 4% per transaction, and that's before any annual fees or minimum spend requirements," says Caecilia Chu, co-founder and chief executive of fintech and travel card provider, YouTrip.

"The amount may seem small at first, but it adds up quickly over the trip."

As the table above shows though, international transaction fees are avoidable.

However, it's always worth comparing the full suite of fees and features attached to a card before deciding if it's a worthy companion for your next holiday abroad.

2. Cash withdrawal fees at ATMs

Whether home or abroad, most Australians won't want to have to fork out a fee to withdraw cash. The difference is, the cost of withdrawing money abroad can really add up.

Many Australian banks charge a transaction fee on withdrawals, and some will charge an additional withdrawal fee. On top of that, it's also common for third-party ATM operators to charge a fee.

As it turns out, the latter can be very expensive, depending on where you are in the world.

An analysis conducted earlier in the year by Wise found that in some of the popular destinations for Australians, travellers pay double-digit fees, on average, to withdraw cash.

For instance, Wise found that the average third-party ATM fee was 27.1% in Vietnam and 10.91% in Indonesia. On a $200 cash withdrawal in Vietnam, that would equate to a fee of $54.

Tristan Dakin, ANZ country manager at Wise, says that there are more cost-effective ways for travellers to withdraw cash overseas though.

"Tips include looking for bank-operated ATMs, that offer clearer fee disclosures, making fewer, larger withdrawals rather than many small ones, and being sure to select local currency rather than AUD when withdrawing cash, to avoid higher mark-up rates."

3. Dynamic Currency Conversion costs

Many Australian travellers will have found themselves in a situation where, upon going to pay for a bill at a restaurant or cafe, they have been presented with the option of paying in the local currency (e.g. Euros) or their home currency (Australian Dollars).

This is what's known as Dynamic Currency Conversion (DCC) - a service offered by some merchants and  payment providers.

In theory, it's a useful idea. After all, seeing a purchase in Australian dollars can give you a better appreciation of the true value of whatever you're paying for.

The problem is, as Chu explains, using Dynamic Currency Conversion typically comes with a cost attached.

"While paying in AUD may feel more familiar, it comes with a poor exchange rate and additional DCC mark-ups between 3-7%, set by the overseas merchant or payment processor.

"In such a scenario, selecting the local currency is the more cost-effective option as it allows your card provider to handle the conversion."

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