Australia markets closed

The one overseas travel mistake leaving Aussies hundreds out of pocket

“Half of us are unaware of one of the biggest potential costs, which is the foreign exchange rate we pay on currencies we use.” Photo: Getty

Passport? Check. Credit card and cash? Check.

You might have all your belongings with you, but you’ve already begun your trip on the wrong foot.

Holiday-making Aussies might not realise just how much of a dent bad exchange rates are making to their budget.

By failing to stay on top of a great exchange rate, you’re not getting the most bang for your buck – literally.

Picture this: you’re planning to travel to the States for the Christmas break. When you exchange your Aussie dollars for American money, the exchange rate is AUD0.71, which only leaves you with USD $3,550.

Had you exchanged your money in June, where the exchange rate was $0.81 to each US dollar, you would have USD $4,050 to play with.

That’s an extra USD $500 – meaning more money with which to make the most out of your experience.

Planning pays off

According to research conducted by HSBC Australia, Aussies are actually more conscientious and careful with their holiday planning than we would expect, given our laid-back stereotype.

Almost all Australians (94 per cent) will change their spending habits when they’re overseas in order to avoid additional fees, and over half (55 per cent) opt to use a separate travel card over a credit card.

Beware of international transaction fees, ATM withdrawal fees and other hidden fees when travelling abroad. Photo: Getty

But this conscientiousness isn’t always extending to currency exchange, the research indicates.

“We are willing to change our money habits when we travel, for example by withdrawing foreign currency or using a travel card,” said HSBC head of transactional banking products Barnaby Jenkins.

“But what is interesting is that half of us are unaware of one of the biggest potential costs, which is the foreign exchange rate we pay on currencies we use.”

Nearly half of us (47 per cent) aren’t even aware about exchange rates that occur when using credit cards overseas.

And a majority of Aussies (87 per cent) have run into issues overseas when using credit cards such as ATM withdrawal fees and hidden fees.

“One way they can save a lot more money is by locking in a good foreign exchange rate well ahead of time,” Jenkins advised.

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.

Now read: The free tool Aussies are using to save $1,600 on their energy bills

Now read: Controversial bill could save Aussies $6,000

Now read: Here’s how to turn 17 days of annual leave into 41 days off