According to the Debt-lag Survey of more than 1,000 Australian travellers, commissioned by Finder, over one in three Australians (36 percent) who use their credit cards on holiday fail to pay off their accumulated debt in time to avoid paying interest.
That’s an estimated two million Australians every year who will be paying interest on holiday credit card debt, worth $139 million.
While half of travellers who return home with credit card debt pay it off within the first three months, over one in five (21 percent) take between three and six months, paying an average $117 in interest.
A further 28 percent of credit card-using travellers fail to pay their bills off within six months of returning. This means over half a million Aussies will be paying interest in excess of $200 each.
The worst offenders – 10,300 Australian travellers – accumulated debts of over $10,000 and took a year to pay if off, resulting in an interest bill of $811.
The most cited travel rip-offs mentioned by Australian travellers were credit card and ATM fees and inflated “tourist prices” such as overpriced taxis, according to the Survey. Mobile phone roaming charges were the third biggest gripe reported, with 15 percent of people complaining about inflated charges while overseas.
Biggest travel rip-offs
- Credit Card overseas transaction fees
- Inflated tourist prices
- Mobile Phone roaming charges
- Coerced into buying something you didn't want, such as souvenirs
- Paying for what you assumed was free, such as bread or water at a restaurant
When it comes to paying off holiday debt, almost half (44 percent) of Australian travellers will try to reduce their shopping spending and socialising, while 3 percent would be happy to be medical guinea pigs by doing clinical trials to pay off their debt.
Some great ways to avoid debt-lag this holiday season include:
- Organise your foreign cash before you leave home, so you know you can only spend a set amount
- Consider a multi-currency travel card, and lock in foreign currencies at a lower exchange rate
- Know your credit card's fees and charges when it comes to international travel
- Use online travel comparison websites to look for great deals on accommodation, transport and leisure activities
- Prepare a travel budget, and stick to it
The Greater has a range of simple, convenient products and services to help you budget so you don't come home this holiday season with "debt-lag" - see how we can help today.