How to avoid currency conversion rip-off
BANKS are fleecing Aussies abroad of about $15 every time they make a withdrawal overseas.
Consumers say they are fed up with being charged these excessive currency-conversion fees because they are eating into their travel money.
Today, as part of the new Fee Fighters campaign, News Corp Australia reveals how to beat the charges.
The Australian Competition and Consumer Commission found consumers are slugged more than $2 billion in foreign transaction fees annually - and at rates that are higher than what are imposed in many other countries.
New data provided by financial comparison website RateCity shows customers are getting slugged the following charges:
• Up to $5 for international ATM withdrawal fees by the customer's own bank.
• An ATM charged by the financial institution that owns the overseas ATM, often starting at $3 per withdrawal.
• Currency conversion fees of up to 3.65 per cent.
These add up to $15 on a $200 withdrawal.
News Corp asked readers what fees they've been hit with overseas and one frustrated traveller said they paid $78 to withdraw $500 overseas as Japanese yen.
Another annoyed traveller said "a 3 per cent international currency exchange fee on top of the credit card charges is outrageous and quickly adds up over a few weeks of holiday time when travelling overseas."
RateCity's spokeswoman Sally Tindall said overseas holiday-makers were often restricted with how much money they could withdraw from ATMs in one go meaning they are repeatedly stung with these fees.
"Often they don't let you take out more than $200 at a time so suddenly you are getting stung $15 per day," she said.
"Often people just go overseas put their card in the ATM machine, shut their eyes and hope for the best knowing they will be charged huge amounts just to access their own money."
But Ms Tindall said it was possible to avoid these charges altogether if you chose the right bank account.
ING is one of the few institutions that offers customers access to their Orange Everyday account which allows users to avoid these charges.
"Our research found on average Aussies are inadvertently adding $155 to each international trip thanks to unnecessary foreign exchange and bank fees and charges," ING's head of retail banking Melanie Evans said.
"Most would rather spend that shopping or an a travel experience, for the same amount you could do a cooking class in Indonesia or a photography tour in New York.
"There's nothing worse than coming home from an amazing holiday, only to find that you've been hit with bank fees."
The Australian Banking Association's spokesman said financial institutions incur "different costs" to distribute foreign currency to customers.
"This growing competition around cost and convenience for international transactions means that customers should shop around before they travel to find a deal that's best for them," he said.