It’s quick and easy to send money overseas using your credit card, but there are often more affordable transfer options available.
From an overseas wedding to sending money to family, there are plenty of reasons why you might need to send an international money transfer. One way you can pay for your international money transfer is using your credit card, allowing you to quickly and easily send funds all around the world.
Compare International Money Transfer
There are plenty of foreign exchange providers who allow you to transfer money overseas from your credit card, but it’s important to compare the cost of your transaction with other transfer options to work out whether you are actually getting a good deal or not.
How do I transfer money overseas from a credit card?
There are several ways you can use your credit card to pay for an international money transfer, including:
- Your bank. You can use your credit card to transfer money overseas via your bank. Transfers can be made online via Internet banking, over the phone or by visiting a branch. Beware: This is likely to be considered a cash advance which means you’ll be charged a higher rate of interest plus a cash advance fee.
- Western Union and MoneyGram. Specialist transfer companies like Western Union and MoneyGram allow you to pay for transfers to hundreds of thousands of locations around the world using your credit card. Both companies allow you to pay for online transfers using your credit card, while MoneyGram also allows you to pay for in-person transfers with your card.
- PayPal. PayPal offers international money transfers from Australia all around the world, so if your PayPal account is linked to your credit card, this represents another way you can use your credit card to transfer money overseas. However, be warned that you will be charged a minimum of 3.9% of your transfer amount to fund the transaction.
When should I transfer money overseas from my credit card?
There could be certain situations when sending an international money transfer from your credit card may be a good idea. For example, if you have a high-end rewards credit card, you may be able to access significant rewards (such as frequent flyer points) by increasing the amount you spend on your card. However, as mentioned above, this typically works when using a service like Moneygram or Western Union and not your bank. Using your bank could charge higher interest rates and fees, ruining any gain from your points.
Another situation where credit card transfers can be useful is in an emergency. For example, you may need to send an urgent transfer to a loved one who has been mugged overseas and has no cash. In this case, sending a transfer within minutes via Western Union or MoneyGram and paying using your credit card could represent the most effective solution.
Why should I avoid transferring money overseas from my credit card?
It could be treated as a cash advance
While there are specific situations where credit card transfers can be useful, in many cases they do not represent the most cost-effective solution. When you pay for a transfer with your credit card, the transaction will often be treated as a cash advance by your card provider. This typically attracts a higher rate of interest than an ordinary card payment, and that interest may also apply from the day you make the transfer.
Look out for the fees and charges
Using a credit card to send money overseas will also usually incur additional fees and charges. There may be a cash advance fee charged by your credit card provider, while other charges such as currency conversion fees can also eat into your pocket.
Another risk of transferring money using your credit card via a bank is that you probably won’t get a competitive exchange rate. Other transfer options, such as specialist online transfer companies that allow you to fund a transfer with a direct debit from your bank account, often allow you to access far superior exchange rates and get better value for money.
Finally, credit card payment simply isn’t offered as an option by many international transfer providers, which means it often isn’t a viable solution to your transfer problem.
What other international money transfer options are available?
All of the transfer options listed above — your bank, Western Union, MoneyGram and PayPal — allow you to pay for your transaction with funds from your bank account. This is always cheaper than paying with your credit card, so is worth considering if you want to save money. MoneyGram and Western Union also allow cash transfers in person if that option is more suitable.
But the most affordable international money transfers are usually offered by online money transfer companies such as OFX and World First. These providers specialise in foreign exchange and moving money across international borders for the cheapest possible price. They have lower fees and much better exchange rates than banks and other bricks-and-mortar transfer providers, and they offer fast and secure transfers.
The end result of these benefits is a better deal for you and more money in your recipient’s pocket.Back to top
How do I compare money transfer providers?
Make sure to consider the below features when weighing up the pros and cons of international money transfer providers:
- Competitive exchange rates. The higher the exchange rate, the more value you get for your Australian Dollars and the more money your beneficiary receives in their overseas bank account. Compare exchange rates between money transfer providers to find one that consistently outperforms the rest.
- Little to no transfer fees. The exchange rate is only part of the international money transfer cost equation; the other half is any transaction fees that apply. Most online transfer providers charge minimal fees and some will even waive their fees on large transfers.
- Supported currencies. Check the list of supported currencies for each provider to make sure you can send funds to the country you want and in your currency of choice.
- Payment and access options. Can you fund the transfer using your bank account or a debit card? Does the company offer online-only transfers or can you lodge a transaction request via a mobile app, over the phone or in person? Also, remember to check how your recipient will be able to access the money and whether this option is convenient for them.
- Speed of transfers. If a fast transaction processing time is important, check to find out how long it will take each provider to move your funds from A to B.
- Customer service. Last but not least, check how you will be able to access customer support if you ever have a question or if something goes wrong with a transaction. In addition to an online help centre, look for phone, email and live chat support.
Although you can transfer money overseas from a credit card, this is typically not a convenient nor affordable transfer solution. Specialist online transfer companies provide a much easier and more cost-effective solution, so make sure to compare your transfer options before parting with any money.