Bessie Hassan | Money expert at finder.com.au
When you’ve got the travel bug, it’s easy to get swept up by the thrill and novelty of visiting a new country. However, if you don’t exercise some caution, you could wind up paying exorbitant prices because of a little thing known as the “tourist tax”.
While this tax can take many forms, it mainly involves paying inflated prices for big-ticket items like flights and accommodation. The travel tax can also mean falling victim to financial fraud, paying too much for ATM or currency conversion fees or being gypped with a poor exchange rate.
To travel smart and to ensure that you’re not paying too much on your next trip, keep the following tips up your sleeve.
1) Tell your bank you’re heading overseas
Before you jump on the plane, let your bank know that you’re heading overseas. Many banks have dedicated teams that scan your account for suspicious activity, so if they notice an unusual transaction in a foreign country, they might freeze your account. Notifying your bank of your travel plans only takes a couple of minutes. You can either do it online or you can pop into a branch.
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It’s also a good idea to register with the Department of Foreign Affairs and Trade, and to review any travel safety tips listed on the website that are specific to the destination you’re headed to.
2) Don’t be an obvious target for money scams
As a tourist, you’re an easy target for money scams while travelling. To minimise your risk of being scammed, keep an eye out for “skimmers” when making in-store purchases to ensure that your card isn’t skimmed.
You should also keep your card within your sights at all times. If you’re withdrawing funds from an ATM, make sure you hide your card details, and the same goes when using contactless payment systems.
If you do notice any suspicious activity on your account while overseas, contact your card provider immediately. Most processing companies like Visa and Mastercard have policies in place to protect you from fraudulent activity, but the sooner you act, the better.
3) Be wary of currency conversion fees
When weighing up your travel money options, keep an eye out for the fees you’ll have to pay, such as loading fees, currency conversion fees and annual fees (these can be as high as $250 for some travel credit cards).
In particular, currency conversion fees can be quite steep, so they’re worth avoiding entirely where possible. Most cards will charge a fee of around 2-3% of each transaction made in another currency, but the good news is that there are some cards on the market with 0% currency conversion fees.