Travellers heading overseas who rely on using their own everyday debit or credit card could be unnecessarily costing themselves hundreds of dollars in charges.
Experts say jetsetters should organise their currency at least a few weeks before they leave to make sure they avoid getting stung by unnecessary costs, particularly after the Aussie Dollar recently dipped below US70c for first time since January.
Analysis by financial comparison website Mozo found some everyday transaction accounts charge customers overseas ATM fees as high as $5.50 per withdrawal.
Throw into the mix currency conversion fees and you can end up getting hit hard.
Mozo found the highest currency conversion fee was 3.65 per cent, so for a $200 withdraw this fee alone costs $7.30.
Mozo spokeswoman Kirsty Lamont said you should get yourself a “travel-friendly credit or debit card” before you leave.
“By doing that you can avoid the huge array of fees and charges that apply with regular debit and credit cards,” she said.
“Most banks will charge foreign transaction fees of around two to three per cent and overseas ATM fees which can be as much as $5 per withdrawal, those fees can really add up on a long holiday.”
Ms Lamont said there were a number of financial institutions offering no foreign transaction fees and no ATM withdrawal fees.
ING head of retail banking Melanie Evans said it removed international fees for eligible customers in late 2017 so they could use their Orange Everyday account and credit card overseas fee-free.
“Since ringing in this change we’ve helped 69 per cent of our Orange Everyday and credit card customers save about $45 each on international ATM and transaction fees.”
Online currency conversion website The Currency Shop’s director, Justin Rampono, said it could be “OK to use a debit card if you are using the right card”.
But there was another nasty fee to be wary of when making purchases, he said.
“You need to watch out when you use your card overseas and asked at the terminal reader whether you would like to make the purchase in Australian dollars or in the local currency.
“This is known as dynamic currency conversion and the rate on this is worse when paying in Australian dollars. Don’t ever choose to pay in Australian dollars – always choose the foreign currency.”
Jetsetters should also consider prepaid travel cards which allow travellers to lock in currencies before leaving.
Some of the best travel debit cards
• ING Orange Everyday, no overseas ATM fee, no overseas purchase fee, 0% foreign exchange fee.
• HSBC, Everyday Global Account, no overseas ATM fee, no overseas purchase fee, 0% foreign exchange fee.
• Citi, Plus Transaction Account, no overseas ATM fee, no overseas purchase fee, 0% foreign exchange fee.
• Macquarie, Transaction Account, no overseas ATM fee, no overseas purchase fee, 0% foreign exchange fee.
• Up, Everyday Account, $5 overseas ATM fee, no overseas purchase fee, 0% foreign exchange fee.
Originally published as Best way to take money overseas