Aussie travellers warned of travel credit card rip off

Should you use a credit or debit card, or put your money in a pre-paid travel card?

Aussie travellers warned of travel credit card rip off

The choice between using credit or debit cards and prepaid travel cards just became simpler, after research reveals that Australians are being stung thousands of dollars in fees for using credit cards overseas.

Analysis of 314 travel money products from 89 providers proved that prepaid cards are the way to go when it comes to saving on fees.

Travellers are being warned about falling into the trap of marketing techniques that promise ‘free’ travel insurance and double frequent flyer points. These strategies hide the fact that you’re actually paying for these features in annual and per-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,” says Mozo director Kirsty Lamont.

“If you're booking everything from flights to accommodation to evening meals on your travel credit card, those charges can really add up.

“A travel credit card with a spend of $10,000 can incur charges ranging from $0 to $1089 which is quite the margin.”

Do you have a credit card that offers ‘free’ benefits such as those listed above? Do you have any tips for our members on how to manage travel money?

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    COMMENTS

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    Cowboy Jim
    21st Jul 2018
    7:55am
    Spot on Leon, have changed my platinum credit card with rewards points for a basic card with the same limit and for a start I am $175 better off annually. The free insurance is voided if you travel more extensively and you have to get your own insurance.
    I find a bit ripped off when I use the debit card and I try to use that less and less overseas. Debit cards here are in A$ and you will be hit with a conversion fee here in Oz as well as a charge. On top of that come the ATM fees overseas which in my case were $US4 at a time. Prepaid in the currency of the country you are going to is the best way if it bothers you to carry cash.
    MICK
    21st Jul 2018
    8:48am
    Completely WRONG Jim. The facts:
    1. the platinum credit card gives you access to FREE travel insurance. That alone is worth the annual fee.
    2. a good debit card AVOIDS conversion fees. We have used a Citibank card extensively during the past 10 years and pay no fees other than a forex (conversion) fee of around 1% if we draw money out in a different currency. Compare that to the 3% (starting) fees from all other players in this space. A no brainer.

    The way to travel overseas is to buy the flights, car hire and accommodation on your credit card and use the debit card to either withdraw cash whilst travelling or use the card as eftpos. The only way to go unless you have money to burn.
    Only modification is if you can pay the bulk of car hire and accommodation cash. Then you avoid the overseas transaction fees you are going to be hit with using your credit card.
    Cowboy Jim
    21st Jul 2018
    9:06am
    Mick - after 60 days per annum my platinum card does not carry insurance. If your stays are 59 a year you are covered. In time to come I might look at that again when travelling less. My debit card is linked to a bank account and does have conversion fees.
    Shall use Citibank Debit card in future, wife has got one so I might get one myself. Do not live in a capital city so it might be a bit more difficult. Thanks for mentioning Citibank.
    MICK
    21st Jul 2018
    9:57am
    Check out the ANZ platinum as I recall the cover was a lot longer. The cards are not all alike.
    The Citibank card is a stand alone product and you can use it at any ATM on the planet. It only attracts a basic forex fee used overseas but at 3% that is zip.
    We transfer money in before we depart and use it for cash whilst overseas. There is no annual charge so the the card remains dormant whilst in Oz. A great product which has worked for us for many years now. Also...they say that withdrawals are "fee free" from Citbank ATMs but the reality is they are free from any Visa ATM. We used it 50% for cash and 50% for grocery shopping, fuel, etc. Don't leave home without it.
    You apply for the Citibank card online. Takes a few weeks. Hope that helps you save some serious money Jim. Cheers.
    Sundays
    21st Jul 2018
    11:21am
    Thanks for the tip Mick. Our current debit card charges $5 overseas withdrawal and 3% conversion fee. Good to know we can do better. Love the ANZ Platinum card. We used a prepaid card once but found it expensive especially when we wanted to withdraw unspent money on our return.
    MICK
    21st Jul 2018
    3:11pm
    No worries.
    Don't worry about the Citi debit card. Any money you get out domestically attracts a zero fee and overseas 0.5% total is zip. I have not read any blogs other than happy ones with this product. The only pain in the butt is setting it up is information demanding and takes a few weeks. After that use it or not: no fees draining your account.
    Let me know if you get one, after using for a bit.
    Cheers and happy travelling.
    VeryCaringBigBear
    21st Jul 2018
    9:01am
    I have found prepaid cards the most expensive to use. Credit cards are least expensive and debit cards the next. If you can get a good conversion rate cash is not too bad either. I get free travel insurance on my credit cards plus points without an annual fee. Ask your bank and if you are a good customer annual fees will not be charged.
    Cowboy Jim
    21st Jul 2018
    9:09am
    Have not got enough in the bank to be considered "A good customer" unfortunately. During my working life, with mortgage and insurance it was a different story.
    MICK
    21st Jul 2018
    9:58am
    Read my posts above VeryCaringBear. We have been doing this for many years and this is how to do it if you want to save serious money.
    VeryCaringBigBear
    21st Jul 2018
    1:27pm
    Fees are not the issue Mick it is the terrible conversion rates many of these fee free products use.

    My credit card rate is currently AUD1 equals USD 0.742c whereas most convert to USD 0.71 or lower.
    MICK
    21st Jul 2018
    3:14pm
    As I said read my posts above. The Citibank debit card has a 0.5% conversion rate. That is why we had to abandon ALL other cards which charge between 3% and 5%. No other charges applicable unless you use the card on other than a Citibank or Visa ATM. We don't.
    Yeah the AUD is painful. Luckily we did our travelling whilst it was still high so can now sit back and pick & choose when a decent offer comes along. Pretty travelled out so happy to stay at home as well.
    ozrog
    21st Jul 2018
    9:26am
    We use citibank debit card in Australia and overseas and we pay no fees not even conversation fees. Just load with aussie $ and away we go.
    MICK
    21st Jul 2018
    9:59am
    Correct.
    VeryCaringBigBear
    21st Jul 2018
    1:28pm
    What is the current conversion rate to USD with Citibank?
    MICK
    21st Jul 2018
    3:19pm
    Today's bank rate is AU$1 = US$0.7419
    This is the Visa bank to bank rate of the day.

    The Citibank debit card would hit you for 0.5% if you withdrew money in the US, so if you decided to withdraw US$1,000 then that would cost you AU$1,415.29 ($1,47.89 - 0.5%).
    VeryCaringBigBear
    22nd Jul 2018
    3:42pm
    Mick Citibank now has a 2.5% currency conversion fee from Aussie dollars to foreign currencies.

    21st Jul 2018
    6:29pm
    ah great to see old labor mick is good for something, agree fully with his comments, it is the way to go

    23rd Jul 2018
    2:45pm
    Mick - sounds like you have a good deal on your card or do you
    A 0.5% fee may look attractive , but what is it based on ?
    A 3% fee on a interbank rate may be a lot cheaper than a 0.5% fee on a retail rate
    Problem is you have no way of verifying which rate the bank used

    24th Jul 2018
    8:08am
    I found the Australia Post travel card wasn't accepted in most places. I was virtually useless.


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