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International credit card use costing Aussies $300 million

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If you’re heading overseas these holidays, financial comparison site RateCity warns you to check your credit and debit card fees before globetrotting. According to new research, Australians travelling overseas could be spending more than $300 million in fees per annum – $191.7 million in foreign currency conversion fees and $142 million in international ATM access fees. In some cases, a card user will pay as much as $10 to withdraw money from an international ATM.

“Many travelers may not realise that using their everyday cards overseas could be costing hundreds of dollars,” says Damian Smith, RateCity’s CEO. “For the more than seven million Australians who travel overseas each year we estimate that, collectively, they are being slugged over $300 million to access their own funds while on holiday.”

Smith says it pays to shop around as fees vary significantly. The average foreign currency conversion fee for credit cards is 2.7 per cent of the transaction value and the average international ATM fee is $5 per transaction. However, according to the RateCity database, 93 credit cards and 60 debit cards offer cheaper fees, and five offer fee-free services.

“Consumers get justifiably upset when they are being slugged with fees and they don’t understand how it ties back to any real cost to a bank,” says Smith. “There is no good reason why one bank charges nothing for a currency conversion fee while another charges three per cent.

“Many of these foreign charges are largely avoidable by getting a different, low-fee card for your holiday travel. It’s a no-brainer really; travelers could give money to their banks in the form of fees or they could put that money towards something more rewarding such as a meal in a local restaurant or shopping!”

The key is to research. This will prevent your holiday from turning into a holiday from hell!

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Friday, November 25, 2011

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