Overseas travellers face unexpected debt, new study finds25 September 2012
More than one in four young travellers are returning from their overseas holidays with an unexpected credit card burden, according to a new survey.
The survey by Australia Post found the biggest hidden expenses for overseas travellers are currency exchange rates and commission, foreign banking transaction costs and credit card fees.
Australia Post commissioned Quality Online Research (QOR) to undertake the research prior to launching new services, which allow travellers to prepare for overseas travel and avoid hidden expenses.
Australia Post's Executive General Manager Retail Services Christine Corbett said the research sounded a warning for the 76% of respondents who indicated they would travel overseas again in the next 12 months.
"Many Australians are making the most of the stronger dollar and competitive flight fares but then finding their budgets are blowing out with hidden expenses that can be avoided with planning," Ms Corbett said.
"It seems that young travellers in particular are returning home with more than just memories - they're returning with unexpected international transaction fees, a large mobile phone bill and a credit card debt that is often taking months to pay off."
"We know from the research that the most common hidden expense is currency exchange rates. One way to avoid them is to obtain a travel card and lock in your currency exchange before you travel when the exchange rate is most favourable."
From tomorrow at 3200 stores across the country, Australia Post will have a multi-currency Load&Go travel card and cost-effective travel insurance for $5 a day or $10 a day available over the counter.
Key features of the new Load&Go Travel card include the fact that up to five currencies can be held on the card at the one time, activation is instant and currency exchange rates are very competitive. The new Load&Go Travel card has no commission or reload fees.
Ms Corbett also noted the in-store insurance allows overseas travellers to arrange their insurance instantly in a simple transaction. "It gives travellers peace of mind, which is important given holidays are mostly more expensive than we think," she said.
"Australia Post processes over 1.5 million passport applications each year, so we feel that it's important that the public are fully informed and prepared before heading off on holiday overseas."
The new services come 10 months after Australia Post opened its first superstore as a one-stop destination for travellers. Across the country, Australia Post now has 3200 outlets which offer foreign currency exchange, TravelSIM for mobile phones, travel insurance and a range of travel cards. In 1700 of these postal outlets, passport processing is also available.
The survey of 1000 people, released today, also found that contrary to popular belief, men tended to be more extravagant on holidays than women and were more likely to have an unexpected credit card debt.
In comparison to their male counterparts, females travelling overseas were more likely to limit their daily spending to less than $100 once flights and accommodation were paid for. Women were also more likely to have travel insurance than men.
Other findings were:
- More than one in four young travellers are returning from their overseas holidays with a credit card debt greater than they expected but as travellers age, their credit card burden reduces and they are more likely to have travel insurance.
- Specifically, 40% of young Australians, aged between 18 and 29, don't have travel insurance when they go overseas. By contrast, only one in four travellers in their 50s travel without insurance.
- Cash, credit cards, debit cards and prepaid travel cards are the most popular currency options for overseas travel.
- One-third of overseas travellers (33%) spend between $50 and $100 a day, excluding flights and accommodation.
- Nearly one-third of overseas travellers (29%) spend between $100 and $200 a day, excluding flights and accommodation.
- One in six travellers spend more than $200 a day while overseas, excluding flights and accommodation.
- One in six overseas travellers are taking more than three months to pay off their credit card, with those in their late teens and 20s taking longer to clear their debt.