How banks are cashing in on your holiday

Horizontal studio image of a well dressed businessman putting a stack of $100 bills in his suit coat pocket. This could represent a pay bonus or some kind of embezzlement or corruption. This studio image was photographed with a white background.

Australians planning an overseas holiday could be stung by hundreds of dollars worth of bank fees if they don’t choose their travel money card carefully, according to a recent analysis by financial comparison site Mozo.com.au.

Banking experts from the financial comparison site analysed 183 credit cards, 11 prepaid travel cards and 101 bank accounts from 84 providers for its annual Mozo Experts Choice Travel Money Awards and found that overseas holidaymakers could pay fees of up to $1,089 on a $10,000 holiday.

“Travel credit cards are often decked out with all the bells and whistles like frequent flyer points and complimentary travel insurance which makes them an enticing option for those who travel frequently,” said Mozo Director Kirsty Lamont.

“However these perks can come at a high price with some travel credit cards having annual fees the equivalent of a return flight to sunny Thailand.”

While annual fees accounted for the biggest portion of credit card fees payable, Mozo research also showed travellers should pay careful attention to the foreign exchange margin on overseas transactions, which ranges from zero per cent on some credit cards to 3.65 per cent to others.

“On a $10,000 holiday, this is as much as $365, which is cash better kept in your pocket than your bank’s,” said Lamont.

Mozo said that while a prepaid travel card is likely to be better value than a travel credit card for those planning a single overseas getaway (because you lock in your exchange rate before you go and don’t pay foreign exchange margins), travellers still need to shop around for a competitive exchange rate.

“Our analysis found that there was a $50 difference between the best and the worst value prepaid travel cards.”

In the Bank Accounts category, Mozo found there was a difference of up to $170 based on a $2,000 spend including four ATM withdrawals and 20 purchases.

Bankwest was crowned Travel Credit Card Bank of the Year with its travel friendly cards winning awards in four Experts Choice Award credit card categories while currency exchange specialist Travelex was found to offer the best value prepaid travel credit card.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

mozo.com.au

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