When going on a holiday, it’s expected that you’re going to spend a little more than you usually would. From pricey tourist traps, to hotels and the little indulgences that increase your spending bit by bit, travelling is practically tailor-made for pulling out credit cards left and right.
But as the latest research from RateCity shows, Aussies might be shocked to learn where a significant amount of this spending is actually going — ATM fees.
“A lot of people don’t realise just how high credit card fees can be oversees,” states RateCity.
With ATMs costing up to $5 per withdrawal, Australians are expected to spend $8 million in overseas ATM fees over the Christmas holiday period. At the same time, with banks charging an average of $2.70 for foreign currency fees, if each Aussie traveller spends just $1000, they will end up contributing to another $43 million in lost money.
Fortunately, if you’re planning on taking a trip these holidays, you don’t have to see your savings account take such a hit. There are ways to avoid these fees.
Get money up front
Rather than winging it upon arrival, those hoping to save a little money might consider organising necessary funds before heading off on their travels in the form of cash, travellers’ cheques or travel money cards. This way, you’ll have all the money you require with you at all times, rather than needing to withdraw money periodically, and it might help rein in your spending.
Bear in mind that you’ll need to be quite diligent in working out your spending if you do this. It’s also important to note this strategy comes with its own set of charges and fees, such as for loading money onto the cheque or card, along with inactivity fees if you don’t make sure to terminate the card when you return.
Pay-as-you-go/pay later methods
There are some cards that are particularly well-suited for travel spending. The GE Money 28 Degrees MasterCard, for instance, has no currency conversion fees, no international transaction fees and no annual fee. Similarly, the CitiBank Plus debit card also have no fee for currency conversion, or for using foreign ATMs.
These pay-as-you-go or pay later cards nonetheless may not be the cheapest options out there, so it’s still worthwhile doing a credit card comparison. You will also have less control than getting the money up front because these options are vulnerable to currency fluctuations.
A healthy combination
Rather than relying on any one product or method, it could pay to mix it up instead. This would mean organising your funding before you go, but still hanging onto a credit or debit card while you’re travelling, just in case. If there’s an emergency or you happen to run out of cash, you can still have access to your money.
Before whipping out the credit card to book an overseas holiday it might be worth checking out what’s happening with the Aussie dollar so you can pick a destination where your dollar will stretch the furthest.