7 tips to minimise your financial holiday hangover

Coming back from an overseas trip with enough money in your account to live off something fancier than baked beans is a trick many people have failed to master.

To help you out this holiday season RateCity has compiled a list of our best travel savings tips that will help ease that holiday hangover.

Pack the right travel companion

The credit card you use at home may not be the best card to take with you on the road. Instead, find a card that doesn’t have outrageous international fees and changes. There are currently over 15 credit and debit cards on the RateCity site that charge no currency conversion fee, and 47 debit cards with no international ATM fees charged by the provider. In the 12 months to October, Aussie travellers paid an estimated $378.4 million in currency conversion fees and $157.4 million in international ATM fees so make sure you’re not one of the people being caught out.

Track spending with a travel app

If your someone who’s accidentally blown the budget on a must have purchase and then struggled for the rest of the holiday to get your finances back under control, don’t worry – you’re not alone.  The good news is that there are plenty of apps to help you reign in the dollars and help you keep track of daily spending.  Apps such as Trail Wallet also help you size up big ticket items against your overall budget, so if you do decide to blow it, the app will revise how much you have left to spend for the duration of the trip and help you reign in further spending. Having a good idea of the state of your finances during your trip will help you avoid getting caught out by reaching a zero dollar bank balance.

Use free Wi-Fi to avoid phone bills

Returning home from a holiday is often made all the more difficult when you receive the massive mobile bill from while you were away. To avoid bill shock next holiday try to take advantage of free Wi-Fi hotspots to message people and call loved ones using free apps such as Facebook Messenger, Whatsapp and Skype. With Wi-Fi now even available on Mount Everest and in Space there’s no longer an excuse for paying through the nose to contact home while travelling.

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Look into free travel insurance

Take advantage of the free insurance offered on most Gold and Platinum credit cards when travelling such as BankWest’s Zero Platinum MasterCard. Just be aware that often you will have to book a majority of the trip on your card to qualify for this free service. Even if you don’t have a card offering free travel insurance, it may be worth signing up for one as the annual fee can be cheaper than the cost of insurance from a retail provider if you travel frequently.  Always read the product disclosure statement to make sure you understand the exclusions that apply and find an insurance policy that is right for your needs.

Book ahead and research

Planning your trip and booking ahead is a good way to avoid paying a premium for last minute accommodation or events. That way, instead of having to choose between a night on the streets or bankrupting yourself at the Hilton, you’ll know in advance that you have reasonably priced accommodation waiting for you at the end of your day. Similarly with tickets to events, attractions or concerts you a planning on seeing early bird deals are often available if you book well in advance.

Take advantage of free events

With that said, there are also great free events to be taken advantage of in every city that can save you cash. Most museums and galleries will offer a certain time weekly where entry is free to the public. For example, the Museum of Modern Art in New York has free entry on Friday nights but it’s best to be early to beat the rush. Taking into account these free session times in your pre-planning is essential to cashing in on these bargains. 

Haggle like a local

Depending on where you are travelling to, bargaining for your goods may be a perfectly acceptable way of shopping. Particularly in market places across Asia and the Middle East bargaining is an expected form of trading and it’s worth giving it a try to see how much you can save. Do some scouting before you try it out and see how much the locals are paying for items to give you an idea of what’s an acceptable price range.

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Learn more about credit cards

How to get a free credit card

There's no such thing as a free lunch. All credit cards come with associated costs when used to make purchases, even if it’s simply the cost of making repayments.

However, many lenders offer incentives for customers such as a $0 annual fee or 0 per cent interest on purchases during an introductory period. Additionally, paying off your balance in full during an interest-free period means you could only have to pay back the cost of purchases without interest. You could also be eligible for additional rewards such as cashback during that time, saving you more money.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

What's the best credit card for rewards?

There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice. 

Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward. 

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.

Where can I get a credit card?

Looking to get your first credit card? You might be confused as to exactly where to go to apply for one. Here’s where to go when you are ready to put in that application.

The bank: Your bank is a great place to start, provided that you have a good banking history. Since you already have a financial history, you have more chance of your application being approved.

Credit card provider: Another option is to apply for a credit card directly from the issuer, such as Visa, Mastercard or Amex. This will most likely be an online application, so do your research and apply for a suitable card for your circumstances.

Major retailers: Coles, Woolworths, Myer and David Jones all have credit cards available. But watch out for the interest rate and annual fees – these cards are designed to help you spend more in store.

How do you pay off credit cards?

The best way to pay off a credit card bill is to set a realistic spending budget and stick to it. Each month, you’ll get a credit card statement detailing how much you owe and how long it will take to pay off the balance by making minimum repayments. If you only make the minimum repayments, it will take you years to pay off your outstanding balance and add extra costs in interest charges. To avoid any extra charges, you should pay the entire bill. 

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

What is a credit card?

A credit card is a payment method which lets you pay for goods and services without using your own money. It’s essentially a short-term loan which lets you borrow the bank’s money to pay for things which you can pay back – potentially with interest – at a later date. Credit cards can also be used to withdraw money from an ATM, which is known as a cash advance. Because you’re borrowing money from a bank, credit cards charge you interest on the money you use (unless you repay the entire debt during the interest-free period). When you apply for a credit card, the bank gives you a credit limit which sets the maximum amount you can borrow using your card. Credit cards are one of the most popular methods of payments and can be a convenient way of paying for goods and services in store, online and all around the globe.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

How to get money from a credit card

You can get money from a credit card, but generally it will cost you.

Withdrawing money from a credit card is called a cash advance, as it operates more as a loan than a simple cash withdrawal. Because it is a loan, you may be charged interest on your cash advance as soon as you make the withdrawal. Interest rates are also usually much higher for cash advances than standard credit card purchases.

In addition to the interest rate, you may also be charged a cash advance fee. This could be a flat rate, or a percentage of your total cash advance. If you are considering a cash advance, make sure to add up how much it will cost you before committing.

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.