Australians prefer to pay with cash overseas
Travellers are using cash to ditch overseas card fees, according to new research from ING.
Although Australians are leading the global trend when it comes to contactless card payments, it appears that we prefer more traditional methods when spending overseas.
According to recent research from ING involving a survey of 1,000 Australians, cash is the most popular way to spend overseas (37%), followed by credit cards (34%). Only 15% of Aussies use their bank debit cards to shop overseas, while 12% prefer prepaid travel cards.
The most popular travel money options for Aussie travellers
Apparently travellers prefer cash because it’s easier to use when making smaller, everyday transactions. With this in mind, it’s probably no surprise that 93% of participants exchange their cash into local currency before they travel overseas. This is also because 48% of Aussie travellers believe they’ll get a better exchange rate and incur fewer fees at home than if they were to use their card to withdraw cash from an ATM overseas.
Over half (57%) of the participants also exchange their cash before they leave Australia in an attempt to lock in more competitive exchange rates and avoid fluctuating rates when they travel overseas. The survey shows that 69% also do this so they will have some cash to pay for a taxi or bus fare on arrival.
As well as the convenience of using cash, 62% of Aussies are also avoiding cards in an attempt to dodge the fees that come with paying on plastic overseas. Interestingly, millennial travellers were more likely to use cash (42%) than credit cards (27%) when travelling overseas. Meanwhile, baby boomers preferred paying with plastic (41%) rather than paying with cash (30%).
Cash is useful when making smaller transactions overseas, but it also poses some security risks for Aussie travellers. While purchases made on your credit, debit or travel card are protected by security precautions, you will have no way of replacing your cash if it’s lost or stolen while you’re overseas. Instead, Aussie travellers should divvy their travel money across multiple products.
For example, you might want to take a credit card for emergency or big-ticket purchases, a travel card for everyday expenses and cash for smaller transactions. That way, if your cash is lost or stolen, you’ll have another option to get you by for the rest of your trip.
Carrying more than one travel money product also offers other perks beyond being a backup for emergencies. For example, if you’re worried about incurring fees, some credit cards and debit products offer low or no foreign transaction fees that can help keep costs low.
Prepaid travel cards also allow cardholders to load Australian dollars onto the card, transfer them to a supported currency and lock them into the current exchange rate. This could come in handy if you exchange cash before you leave Australia to take advantage of current exchange rates.
With the summer holidays fast approaching, Aussies may want to look beyond cash when considering the best ways to take their cash overseas. Make sure you've compared your options and organised more than one way to spend to avoid putting all of your travel money eggs in one basket. If you need help deciding, you can check out our guide to all things travel money to compare everything from prepaid travel cards to credit cards before your next overseas trip.