Looking across the water for your next travel destination? You’re not alone.
New research from Roy Morgan’s State of the Nation Report on Travel shows that nearly 8-in-10 Australians would like to take a holiday in the next 12 months.
Research shows the number of Australians looking to travel domestically is down 5 percentage points since 2001/02, whilst almost half of Australians are now looking to get their travel fix overseas, up 7.5 percentage points since 2001/02.
The consumer landscape has changed…
The proliferation of online comparison and booking sites have empowered consumers to compare flight and accommodation rates and find great deals, at the best times, for a range of overseas destinations.
On the surface, it may seem you get more ‘bang for your buck’ with a trip abroad, but the potential hidden fees and charges you accumulate when spending money in a foreign country could end your budget.
Credit cards; friend or foe?
If you’re a reliable and disciplined spender, a travel credit card might be the perfect travel partner for you.
However, if you are not a disciplined spender, struggle to pay bills on time, and use your card without thinking each purchase through, you could be in for ‘bill shock’ when you return home.
There are some clear positives to travel credit cards, and these include the ability to track spending, special offers and discounts such as free travel insurance or discounted entertainment, and even a level of protection cash doesn’t have. For instance, if you lose a credit card or it’s stolen, it can be cancelled and replaced. With cash, when it’s gone, it’s gone for good.
Credit cards may come with fees, and if you’re overseas at the time, replacement cards can get expensive, costing as much as $200 USD to replace.
However those protections could provide a reason to consider a card over carrying cash instead.
Let’s compare…
To show you these fees and charges in more detail, we’ve compared a range of credit cards that can be used when travelling to a foreign country with low interest rates or no/low overseas fees.
Credit cards with low interest rates/no overseas transaction fees
|
Credit card |
Fees & min. credit |
Interest rate |
Overseas charges |
|
Annual Fee: $99 for the 1st year, then $199/year |
20.7% |
Cash advance: 20.7% interest + $5 OR 3% currency conversion fee (whichever is greater) |
|
|
Monthly Fee: $9 |
9.9% |
Cash Advance: NOT AVAILABLE |
|
|
Annual Fee: $99 |
23.99% |
Cash advance: 25.99% + $3 or 3% (whichever is greater) |
|
|
Annual Fee: $50 |
7.49% |
Cash advance: 12.99% + $5 + 3% currency conversion fee |
|
|
Annual Fee: $50 (free – under 25s) |
8.95% |
Cash advance: 8.95% + 3% currency conversion fee |
|
|
MOVE Bank – |
Annual Fee: $59 (free – first year) |
8.99% |
Cash advance: 12.99% + $5 + 2% currency conversion fee |
Notes: Data accurate as of 18th July 2019
*On purchases only, when you pay your balance (including fees) in full each month.
Bank Accounts: the better option?
Enjoy shopping while you travel?
Not so disciplined when it comes to repaying your debts?
A transaction account with no overseas fees may be a better option for you.
You will need to save your spending money before your trip, but it means you’re not creating a debt that you will need to repay upon your return.
Unlike credit cards, you’re only spending your money, so once you go through what you have, that’s it, and means you may want to budget accordingly. No one wants to end up on the other side of the world with nothing left to spend, even if those spends can be tracked online.
Let’s compare…
To make your choice easier, here are three bank accounts with low/no transaction fees that could help you make the most of your money.
|
Bank account |
Overseas fees & charges |
Features & Benefits |
|
$0 monthly fee |
– Send & receive different currencies |
|
|
$0 monthly fee |
– Send & receive different currencies |
|
|
$0 monthly fees |
– VISA payWave, Apple Pay & Google Pay |
*No HSBC ATM fees worldwide excluding Argentina and Mexico. The receiving bank or ATM may charge a fee.
Notes: Data accurate as of 18th July 2019
A few things to watch out for…
- As with any financial product, the “best” option will vary based on your individual situation. Be sure to make the right decision for YOU by doing your research.
- Look at the terms and conditions and the fees and charges available on the lender’s website before applying for an account or credit card.
- ALWAYS bring two cards with you when travelling overseas, in case you lose one.
- Some overseas banks or ATM providers might also charge you a processing fee. This fee may be charged in the foreign currency and is not counted as a bank fee.
