Australians are renowned travellers but if the Commonwealth Bank’s Travel Money Card Report is anything to go by, we’re not so good at keeping a lid on holiday spending.
The report found 40 percent of Australian travellers blow their holiday budget, with an average overspend of $235 per person. It adds up to a whopping $911 million budget blowout by the nation’s holidaymakers.
The thing is, keeping your holiday budget under control is achievable, and our four simple steps offer a useful starting point.
Reduce foreign exchange costs
Around 57 percent of travellers make purchases with their credit card when overseas, yet 78 percent of cardholders don’t know how much they’re paying in international transaction fees, according to the study.
You can expect to pay an international transaction fee of around 3 percent though it pays to shop around using a comparison website such as RateCity, as some cards have done away with this fee altogether.
Make good use of free travel insurance
Many credit cards offer free travel insurance, and a 2011 survey by consumer group Choice found the travel insurance available on cards tends to be similar to standalone policies though without as much flexibility to customise cover.
The key is to read your card’s policy document to be quite clear on restrictions and exclusions. If you’re happy with the cover offered by your card, it could be a cost saving worth several hundred dollars.
Do some ‘money’ homework
You’ve probably researched hotels and must-see attractions for your destination but it makes sense to know some money basics too.
CommBank’s research found few travellers are fully informed on travel money issues prior to heading off. This included little knowledge of exchange rates (48 percent), what cards are accepted (44 percent) and foreign ATM charges (40 percent). Understanding how you could be impacted by these costs is essential to avoiding the impost.
Alex Parsons, chief executive of RateCity, said, “Many Australians take their everyday credit cards and debit cards on holiday with them, unaware that they may be racking up big fees by using them overseas.”
“Using the wrong cards overseas can be costly, but it’s an expense that can be easily avoided by doing some money homework.”
Start saving today
Credit cards are handy for travellers though saving as much of the cost of your trip as possible is an easy way to avoid a holiday debt hangover. Use a free savings calculator to lay foundations for your next trip.