Aussies could save hundreds by planning ahead for trips abroad this Winter

New research from leading financial comparison site Mozo.com.au shows Aussies could save hundreds of dollars by planning ahead for trips abroad this winter and choosing a travel money card before hopping on a plane.

“As the cost of living continues to rise, making informed decisions about the type of card you use on your trip has never been more crucial,” said Rachel Wastell, Mozo’s personal finance expert.

“If you’re booking international flights and planning for a year-long Summer, it pays to look at how you’ll convert your Aussie dollars into local currencies, and your spending and saving habits.”

For Aussies heading overseas, there are three options, other than a credit card, that can help manage spending overseas. The one most people will have on hand is a debit card attached to their bank account, but you could also consider a foreign currency account or you could choose a prepaid travel card.

“Each of these cards will give you access to your money overseas, but there are surprising differences that, if you don’t plan ahead, could cost you hundreds of dollars more,” Wastell explained.

Foreign currency accounts help Aussies keep costs low

Mozo found that travellers planning to escape the Australian Winter with a trip to the United States, the United Kingdom or Europe, could save hundreds of dollars by opting to use a foreign currency account.

Useful for travellers who need access to more than one type of currency, foreign currency accounts can help keep costs low and provide easy access to a number of different currency options, which can help travellers heading to multiple overseas destinations.

The research showed foreign currency accounts offered the best exchange rates for travellers converting Aussie dollars into American dollars (USD), British Pounds (GBP) and European dollars (EUR).

Mozo research found that foreign currency accounts charged exchange rates roughly 5% less than those on prepaid travel cards, when looking at USD (4.71%) GBP (5.23%) and EUR (5.16%). On a balance of $10,000 (AUD), that equates to a saving of $311 (USD), £273 (GBP) or €314 (EUR).

Hundreds in savings still on offer for debit card users

If you don’t want to open a dedicated foreign currency account or use a prepaid travel card, Mozo research shows there are still ways that travellers could save hundreds of dollars if they plan ahead of time. 

Opening a transaction account with no monthly account keeping fee that has a debit card can provide competitive exchange rates via Visa and Mastercard, but travellers should make sure the accounts also charge no currency conversion fees and no overseas ATM fees.

"While most debit cards can provide competitive exchange rates, where travellers get burned is on high currency conversion fees and overseas ATM fees charges, which really add up over the course of a holiday. This is why it's so important to compare in advance."

When comparing exchange rates on fee-free everyday debit cards, they were almost on par with foreign currency accounts. Foreign currency accounts offered rates just 0.77% to 1.13% lower. In dollar terms, the savings available on a $10,000 (AUD) balance worked out at $74 (USD), £40 (GBP) and €46 (EUR). 

On a $10,000 (AUD) balance, travellers with everyday debit cards that do charge fees, could be paying $262 in conversion fees, based on the average currency conversion fee in the Mozo database of 2.62%. That doesn’t include the potential cost of overseas ATM fees, which cost $3.16 on average for every withdrawal you make.

Mozo experts awarded the best of these fee-free everyday debit cards, the winners of the Travel Debit Card category in the Mozo Experts Choice Awards, to help travellers avoid these pesky fees which can really add up.

“By planning how you will spend your travel money ahead of time, you could turn those savings into an unforgettable experience abroad,” Wastell continued.

Mozo Experts Choice Award Winners 2024 

Travel Debit Cards

• Bankwest: Easy Transaction Account & Qantas Transaction Account
• Great Southern Bank: Everyday Edge Account
• Macquarie: Transaction Account 
• ME: SpendME Transaction Account
• Suncorp: Everyday Options & Carbon Insights Account
• Ubank: Spend Account
• Up: Everyday Account

Foreign Currency Accounts

• Wise Multi Currency Card

Prepaid Travel Cards 

• Travelex Money Card