Overseas travellers are paying an extra $80 when they don't have to

Foreign transaction fees are surely the bane of every overseas traveller's existence. You often forget about them until you have to pay for something - or worse, until you get home and see your credit card bill.

I experienced this on a recent trip to Europe, but more on that later.

New research from Money.com.au shows almost 60 per cent of Australian travellers paid foreign transaction fees on their most recent overseas holiday, costing them $80 on average.

A third of those were slugged with charges of $100 or more.

Money.com.au says foreign transaction fees - charges banks apply when you use your card overseas or make a purchase in a foreign currency - typically range from 1 per cent to 3 per cent of the transaction amount.

These charges can quickly add up. If you spend $5000 overseas, a 3 per cent foreign transaction fee adds up to $150 in unnecessary charges.

Money.com.au's finance expert, Sean Callery, says these fees are one of the most overlooked travel expenses and one of the easiest to avoid if you're willing to shop around.

"Most people look for savings on flights, accommodation and travel insurance - but forget about international transaction fees," he says.

There are plenty of credit cards and debit cards on the market that don't charge international transaction fees.

Some allow you to see your balance and spending in both local currency and AUD, as well as the conversion rate, so you can control your spending.

But there are other ways you can avoid hefty bank fees, too. Here are Explore and Money.com.au's top tips to avoid those pesky fees.

Australians can pick from more than 30 debit and credit cards that charge no foreign transaction fees, Mr Callery said.

Switch before you travel and save up to 3 per cent on every purchase or ATM withdrawal you make overseas or online in a foreign currency.

Before my Europe trip, I obtained a travel money card. But once overseas, I realised I could only tap and pay up to a maximum of AU$100 and once over this cap, I had to punch in my PIN.

The problem was, I hadn't set up my PIN before leaving Australia, so I used my other card for larger payments and ended up being slugged with the very fees I was trying to avoid. Make sure you set up your PIN before you travel.

Mr Callery advises sticking to partner banks or major networks when withdrawing cash abroad.

Some ATMs also charge their own fees on top of what your bank may add, so it's a good idea to check with your bank about fee-free global ATM partners or daily withdrawal charges.

There are instances overseas when you might be asked whether you want to pay in Australian dollars or the local currency. Always choose the local currency, Mr Callery says.

If you pick AUD, the merchant's payment system handles the conversion using its own exchange rate, which will trigger dynamic currency conversion, and this often adds hidden fees, he says.

"Airport currency counters have some of the worst exchange rates and fees," Mr Callery says.

"If you need cash, withdraw a small amount from a reputable ATM abroad using a debit card or use a prepaid travel card."