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How to reduce bank fees as a traveller

· 3 min read

As a traveller, using banks can become a headache with all the fees they add to withdraw money from an overseas ATM or when buying things online in another country with our debit or credit cards. After being charged AU$30 for doing a cash withdrawal and buying something online, I started researching exactly how much I am being charged by banks. I am not affiliated with any financial institution or service. This is just an attempt to find a better solution to the incessant payments to banks.


Commonwealth bank (Australia)

3% to use your card to buy things overseas. E.g. Buying a $800 ticket online means I’ll pay Commonwealth $24 in addition to that ticket price.

AU$5 + 3% to withdraw cash from an ATM. So if I withdraw the equivalent of AU$300, I pay Commonwealth bank AU$14.

If I want to send money overseas, Commonwealth will charge me AU$22. This is actually completely misleading. See the reference to TransferWise below.

Kiwibank (New Zealand)

Drawing from an overseas ATM, Kiwibank charges a flat fee of NZ$6. If I buy something online, they will charge me 1.85% of the transaction amount. (Details here)

To receive an international transfer, Kiwibank charges NZ$12.

Lloyds Bank (UK)

When using an overseas ATM, Lloyds Bank charge 4.5% of the transaction amount. And to buy things online in a currency other than pounds, they will charge you 2.99%. (Details here)

Online Solutions

PayPal (Australia)

To send money to a friend or family costs 0.5% – 3.3%, depending on the country (ref)

When withdrawing money from your PayPal account to your bank account, PayPal also place a currency conversion fee. E.g. I want to withdraw US$500 to my Aus account that it is linked to. Today PayPal converts that to AU$688.26 The actual exchange rate now though “500 US Dollar equals 704.97 Australian Dollar”. So PayPal would make AU$16.71 for me converting to AU$ and withdrawing to my account.


So while banks say they charge you only say $20 to transfer an amount internationally, that’s not actually the truth at all. It turns out they seem to alter the exchange rate, so that what you get is not an accurate reflection of the actual exchange rate.

E.g. Let’s say I want to send AU$5000 to New Zealand. The exchange rate at this moment shows this to be the equivalent of NZ$5482.60. According to Commonwealth bank’s exchange rate, they are going to send NZ5227.50 to my New Zealand account. Which means they are actually keeping NZ$255.10 in addition to their $22 bank fee. So astronomically more. It rings of a scam actually.

TransferWise uses the real exchange rate, thus saving you potentially hundreds of dollars. Using the above example using TransferWise I receive NZ$5,438.92. Thus TransferWise’s fee in this case is NZ$43.68. Which is significantly less than the banks.

Their website:

Personal Summary

It looks like when using a bank card overseas, using my Kiwibank card is going to save me money.

As a close second, it might save me money to transfer money to a friend via PayPal and get them to give me the cash.

And to send large amounts to different countries, TransferWise seems like a great option.

I had a chat with a guy who works in foreign exchange. The best solution is really to have someone else with the same 2 currencies you want to convert between, and do an exchange with them via local bank accounts.