How travel money mishaps are costing Australians
Travel money mistakes have cost Australians almost $1b in the last year, new CommBank research reveals.
As winter settles in, many Aussies are preparing to take off on an overseas holiday in search of warmer weather. However, there are plenty of travel money traps that can make your holiday costs higher than they need to be.
New research from CommBank has revealed that more than two and a half million Australian travellers are set back with money misadventures each year. These financial mishaps can include anything from having money or possessions lost or stolen, experiencing debit, credit or currency conversion fraud or missing a flight. Regardless of the exact accident, these money misadventures are costing Aussies almost one billion dollars every year (or $990 million, to be exact).
As well as hitting us financially, these accidents are also taking an emotional toll. 34% of Aussies admitted that these holiday mishaps cause significant levels of stress. The results also revealed that an unexpected turn of events has caused 27% of participants to change their travel plans. It also doesn’t help that nearly a third (30%) of Australians travel overseas without organising travel insurance first.
Money theft was the most common (59%) mishap experienced by travellers. This is perhaps one of many reasons why CommBank also noticed an increase in the use of card over the last year (41% versus 37%), while the popularity of cash declined (42% in comparison to 48%).
According to the research, the younger you are, the more likely you are to experience one of these travel money mistakes. Gen Y travellers have the highest likelihood of losing their possessions (46%) and are the least likely to be insured (68%). Meanwhile, 76% of baby boomers are insured and 84% of Gen Grey vacation takers organise travel insurance before their holiday.
In a recent survey conducted by finder.com.au, we also found that cardholders lose almost $500 due to unfavourable exchange rates on prepaid travel money cards. Even with the 3% currency conversion fee in mind, cardholders would save $487 on a $10,000 holiday if they use a credit card over a prepaid travel card. This is because Visa and Mastercard credit cards usually offer 4.9% better value when converting Australian dollars to USD, Euro or GBP.
What can Australians do to reduce their travel money costs?
While we never plan for anything to go wrong on our holiday, there are a few steps you can take to ensure you’re properly protected.
When taking money overseas, it’s wise to have a mixed wallet that contains combination of local currency in cash, a credit card or debit card and a prepaid travel card. You can use the cash for smaller, everyday costs, the prepaid travel card or debit card for ATM withdrawals and wherever you want to avoid credit card surcharges and the credit card for large-ticket items, accommodation deposits or emergency expenses. Regardless of how you use each option, having several travel money options will ensure you have a backup in case your card or cash is lost, stolen or damaged.
You should also have your bank’s international customer service number saved in your phone. Then you can contact them immediately if your card is lost or stolen to have the account paused and to request a replacement.
While most cards come with purchase protection insurance, you should also organise travel insurance before you travel overseas. There are many forms of cover to suit different types of travellers, so comparing your travel insurance options can help you find an option that works for you.
Even if you’re insured, you should still take the necessary precautions when travelling overseas. Cover your PIN at ATMs, avoid carrying around large amounts of cash and always keep one travel money option safe (such as locked in your suitcase or in the hotel safe) so that you have a backup if your cash or card is lost or stolen.
Holidays are a time to relax, but failing to properly organise your travel money and insurance before your trip can make things more stressful in the long run. You can use our travel money guide to compare your options.