The EYEWATERING amount Aussies spend on international transaction fees

The EYEWATERING amount Aussies spend on international transaction fees

We’ve all been there. You’ve just bought yourself a lovely croissant on holiday only to have your banking app buzz with a notification for an international transaction fee. On the surface of it, it doesn’t seem much. It is only when you get home and you begin to tally all of the small amounts that you start to realise that a little adds up to a lot.

Now new research from banker ING highlights just how much Aussies spend collectively on international transaction fees and it’s not pretty.  In the last 12 months, ING found that we spent a whopping $600 million on fees, that is $92.62 per person.

This becomes more significant when we consider money is one of the top reasons Australians don’t get to go on the trips of their dreams – 70 per cent of Aussies wanted to go to Europe this year but couldn’t with affordability (61 per cent) listed as a top barrier.

Europe doesn’t come cheap 

The average amount Australians think we need for a two-week holiday to Europe is $10,490, but are only willing to spend $8,866 – about 15 per cent less than what they believe the trip will cost.

On average, it would take almost two years (one year and 11 months) for Aussies to save for a two-week holiday in Europe, with nearly a quarter (23 per cent) saying it would be a big strain, setting them back heavily in their savings goals.

The biggest costs primarily go towards accommodation (86 per cent), flights (85 per cent), food and drink (56 per cent) and experiences (45 per cent) while on an overseas holiday – but how expensive these are may be dependent on the destinations, with Aussies ranking the following European cities within their five most costly:

  • Paris (76 per cent)
  • London (75 per cent)
  • Rome (55 per cent)
  • Venice (41 per cent)
  • Amsterdam (32 per cent)

How do Aussies pay?

A total of 81 per cent of Australian travellers say they used a debit or credit card (physical or on mobile) to make transactions while recently holidaying overseas over the last 12 months.

While a third (33 per cent) of Aussies think FX/international transaction fees are among the five biggest costs for an overseas holiday, as many as 13 per cent of those who travelled abroad last year admit to having no idea that using their Australian debit and/or credit card overseas incurred international transaction fees.

For those travelling abroad for a European summer this year, the average figure of $92.62  can go a long way, equating to approximately 15 Aperol spritzes, 3 steak frites or paella, or 23 scoops of gelato. That’s a lot of ice cream!

How to save your pennies

Matt Bowen, head of consumer and market insights at ING Australia, says: “While the costs of a European summer may feel daunting for many, Aussies can make it a reality down the line with the right mix of smart budgeting and a conversation with their bank.

“Our research shows that a huge number of Aussies are getting hit by those hidden international transaction fees. That’s why it’s important that Aussies confirm with their banks ahead of time what fees they may be subject to while on holiday.

“ING’s Orange Everyday debit card offers international transaction fee rebates to hopefully help Aussies travel a little lighter when it comes to their finances. On average, eligible ING customers have saved an average of $87 per year on international transaction fees, which is almost 9 Aperol spritzes in Italy!

“We encourage Aussies to confirm with their banks what fees they might be subject to while on holiday, ahead of time.”

Below are Bowen’s two tips for saving money when you go abroad:

  • If you’re asked on holidays whether you want to convert the transaction into Australian dollars, consider whether you’re better off paying in the local currency. Check with your bank whether they can do the conversion for you at a more favourable rate.
  • If you’re planning on using apps overseas for any food purchases or transport, add your debit or credit card details into them before you leave. This will prevent any hassles when you arrive at your holiday destination.

Featured image: IMG2GO AI art generator

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