Using Credit Cards In Australia (What Americans Need To Know)

when a reader sent me a question asking which credit cards are accepted in Australia, I knew that I could give a pretty good answer but not provide the kind of in-depth information that a native Aussie could. Fortunately, I happen to have a buddy from there (who is also a fellow credit card blogger) and passed the question off to him… this is probably the 4th or 5th guest post ever accepted in the 2 year history of the onlinebdinfo.blogspot.com

It can be the journey of a lifetime making that special trip Down Under: getting prepared for the long-haul flight, packing clothes and reading up on Australian slang so not to confuse a ‘dag’ with a ‘dill’. It also pays to know how American credit cards fare in the land of koalas and kangaroos.

1. Accepted in Australia

MasterCard and Visa are both widely accepted in Oz, as they are all around the world. Diners Club cards have an agreement with MasterCard so they can be accepted at nearly 25 million locations worldwide. But what about American Express, the credit card so synonymous with the USA that they account for 24% of the total dollar volume of credit card transactions in the US? There is limited acceptance of AmEx in Australia; the company tends to charge retailers more to accept their service, which puts a lot of businesses (particularly small family owned operations) off the idea of accepting them. If you have a Discover credit card, leave it at home. It is not accepted in Australia, although they are working on it.

2. Not Accepted in Australia

Australia is similar to the USA in that credit cards are generally accepted in most locations, although you might find your card being refused by smaller retailers. Check beforehand, by either looking for signs or asking the store assistants. Smaller hotels and guesthouses may not offer credit card facilities and other places listed that sometimes don’t accept credit cards include some restaurants, cafes, fitness clubs and even tattoo parlors. There are some taxi companies which don’t accept credit card payments either (not even Visa), so be aware of how to pay for your services or products.

3. Fees

It is common for credit card issuers to charge from 1% to 3% for purchases made in other countries. If you are using your credit card for every purchase whilst on vacation these charges can quickly mount up. Use a card that offers a low currency conversion fee or even one that has 0% on foreign transactions, like the Chase Sapphire Preferred. Capital One has a number of cards which don’t charge foreign transaction fees and the VentureOne offers miles as a reward, handy if you want to check out Tasmania or New Zealand whilst visiting Australia. Another credit card which has no foreign transaction fee is the HSBC Premier World MasterCard.

4. Store Charges

Generally, you shouldn’t get charged extra for making a purchase in a store if paying with a credit card. However, there are some stores which will charge you for using this payment method, so look for signs warning that charges will be made or ask the cashier before using your card. There have been reports of some places charging up to AU$3 (~US$3.18) just to use a credit card to pay for goods or services.

5. Crime

Credit card fraud costs the main credit card issuers over $1 billion a year in the US alone. One method is called skimming: a device reads the magnetic strip on the card whilst the user is at an ATM. Hidden cameras record the security number being typed in and that’s all a fraudster needs to start accessing an account. Avoid ATMs that look like they have been tampered with and make sure you shield the keypad with your hand when keying in your PIN. Australia has dated card technology and this has been exposed by Eastern European criminal gangs who know how to exploit this situation. You can improve your security by applying for a card such as the JP Morgan Select visa signature credit card. This card has extra security features and is ideal for using in Australia as it has no foreign transaction fee.

Tips for Using Your Credit Card in Australia

Here are a few tips gleaned from CreditCardCompare.com.au’s (an independent comparison website based in Australia) learning centre.

• Before you leave, contact your credit card issuer and inform them about your vacation plans. Irregular spending in a foreign location can set off security measures which temporarily lock your account.
• Shop around credit companies before you leave. Try and find a card that has a 0% or low foreign fee rate.
• Consider taking a prepaid debit card in case your credit card is not accepted.
• Try not to withdraw cash from an ATM with your credit card if you can, to avoid cash advance fees.
• Check the exchange rates. If paying in Australian dollars works out more economical than US dollars, then don’t be fooled into paying in US currency.
• Have your passport with you when making a credit card payment.

This post was contributed by Andy Boyd who is a Co-Founder at CreditCardCompare.com.au, one of Australia’s top comparison websites for credit cards, where he has critically reviewed over 100 cards.