Yahoo Finance Hidden ATM travel trap costing Aussies millions: 'Huge'
Aussies are being stung with hidden fees and costs when travelling overseas.
Aussies heading overseas are being warned not to press this button when taking out money from a foreign ATM. Little-known fees and costs mean many travellers are paying more for their holidays than they should be at a time when every dollar counts.
When withdrawing cash abroad at a foreign ATM, you may be asked if you want to pay in Australian dollars rather than in the local currency. This is known as Dynamic Currency Conversion and means the ATM will do the currency conversion for you, instead of your bank.
While this might seem like a convenient option and save you some mental gymnastics, ING head of consumer and market insights Matt Bowen told Yahoo Finance it’ll usually cost you more.
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"Generally speaking, it usually works out better to let your bank look after the conversion because they have access to the wholesale currency exchange market,” Bowen said.
“The rates tend to be more favourable as opposed to a private ATM - however we'd encourage Aussies to do their own research beforehand.”
It’s not just ATMs that can give you this option either. EFTPOS terminals will also often ask you if you want to pay in AUD or local currency too. As a rule of thumb, you should opt to pay in the local currency instead.
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Aussies paying $600 million in fees
On top of exchange rates, there’s also international transaction fees to worry about. Banks will often charge you these fees when you use a foreign ATM or make a purchase while overseas.
Aussies lost $600 million to international transaction fees in the last 12 months, ING research found. That works out to about $92.62 per person.
That $92 could go a long way while you are overseas - equating to about 15 Aperol spritzes, three steak frites or paella, or as many as 23 scoops of gelato.
The majority of Aussie travellers (81 per cent) use their credit or debit card to make purchases when they are holidaying overseas, but only 13 per cent were aware their card could incur an international transaction fee.
“A huge number of Aussies are getting hit by those hidden international transaction fees,” Bowen said.
“That’s why it’s important that Aussies confirm with their banks ahead of time what fees they may be subject to while on holiday.”
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