The simple mistake Australian tourists are making while on holiday – and it could set you back more than $1000
- Financial comparison company warns against choosing the wrong credit cards
- Annual fees on some travel cards could ultimately cost people over $1000
- Some annual fees are enough to cover return trips to Fiji
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Australian tourists are being warned not to fall for slick credit card or travel card marketing without first researching the best options for prepaid travel options.
Financial comparison company Mozo warned that selecting the wrong card could cost Australian travellers more than $1000.
Mozo’s director Kirsty Lamont said it was the hidden annual fees that would likely come back to bite holidaymakers long after their trip.
Travelers are being warned not to fall for slick credit card or travel card marketing without first researching the best options for prepaid travel cards
‘A travel credit card can be very appealing when planning a trip overseas, especially when you’re able to nab complimentary travel insurance and rack up a few frequent flyer points,’ she said.
But the wrong travel card could see you saddled with fees high enough to cover a ‘return trip to Fiji’, Ms Lamont told news.com.au.
Some other things that could rack up travel costs include overseas ATM fees and overseas transaction fees.
‘Travellers should always look out for the annual fee as this is where you can get really slugged, and it pays to always keep an eye on the foreign exchange margin on overseas transactions, which can range from 0 per cent to 5 per cent on a debit card and 0 per cent to 3.65 per cent on a credit card,’ Ms Lamont said.
Ms Lamont said a travel card with a $10,000 spending cap could result in fees of up to $1089, especially if you use the card to book accommodation, pay for meals and a number of other daily travel expenses.
A travel card with a $10,000 spending cap could result in fees up to $1089, especially if you use the card to book accommodation, pay for meals and a number of other daily travel expenses.
Mozo listed some of the pros and cons of travel, debit and credit cards.
Credit cards offer a chance to rack up reward points, so if you intend on making large purchases overseas the credit card may be the way to go.
However, credit cards also carry potentially ‘huge’ annual fees after being used overseas.
A travel card will allow you to ensure your exchange rate is locked in before you leave, but some countries’ currency may not be covered by the cards.
Debit cards have the advantage of low or zero overseas and ATM charges, with the funds on your card only exchanged to the local currency when you spend them.
The biggest con of debit cards is ‘negative fluctuations’ in the exchange rate, usually meaning travellers are left putting more money on their debit cards than they will ultimately spend.
When it came to the best options, Mozo’s research concluded that HSBC had the best travel card for the year and Bankwest was named travel credit card provider of the year.