Hidden travel fees cost Aussies as banks overcharge

New research from Wise has identified that a significant majority of Australians encounter hidden or unexpected banking fees when travelling overseas, resulting in substantial financial losses for consumers.

The Shear Madness Index, conducted by Wise in collaboration with YouGov, indicates that 78% of Australians are blindsided by hidden charges on their bank-issued credit or debit cards while travelling. These fees are often attributed to what Wise has described as 'The Great Fleecing', pointing to legacy banking infrastructure and the lack of real-time, transparent exchange rate data as core issues.

According to the study, 90% of Australians travelling abroad resort to either cash converted at airports or cards issued by banks. These payment methods, the research suggests, often come with a range of fees, including foreign transaction fees, currency loading fees, inactivity fees, and inflated exchange rate markups. Additionally, weekend exchange rate surcharges were identified as a contributor to the growing costs faced by travellers.

Over a third (36%) of those who have encountered such charges are now considering switching financial providers in search of greater transparency. Another significant proportion indicated their willingness to share their experiences on social media platforms to alert others to the existence of hidden bank fees.

Wise's 2025 Price Comparison Research highlights the discrepancy in fees between traditional banks and alternative financial technology providers. On average, the research found that major banks charge Australians seven times more than newer providers for overseas spending. The findings detail that transferring or spending AUD $250 abroad with Wise can be up to 7.4 times cheaper compared to other providers, with notable savings also recorded for withdrawals and other overseas transactions.

One Australian traveller, identified in the research as Matthew, reported losing up to AUD $4,000 a year due to hidden fees and poor exchange rates when using traditional bank cards while travelling internationally. Sharing his experience, Wise noted that since Matthew switched to their service nearly two years ago, he has joined a group of more than one million Australians using Wise debit cards. The company claims its debit card is up to 85% cheaper to use abroad, supporting 40 currencies at the same exchange rate listed on Google, with no added fees or markups.

The impact of unexpected banking fees on the travel experience is notable. Many travellers find themselves returning from overseas trips to discover charges that were not made clear upfront. The study revealed that 66% of Generation Z respondents adopt a 'YOLO' (You Only Live Once) approach at airports, a time when they are particularly at risk of incurring high fees. In total, 61% of respondents reported feeling 'fleeced' by airport exchange rates, while 69% felt they had been charged more than locals, with tourist pricing remaining a widespread concern. The research also flagged that disappointment with overcharging extended to restaurants, with 70% indicating they felt overcharged and 33% stating that the food quality did not match the price.

Concerns over social media as a source of travel information were also raised, with 70% of respondents feeling disappointed by the travel recommendations they found online. A majority (59%) stated they would approach such information with increased caution in the future.

To raise awareness of the issue, Wise announced it will launch Fleece Free FX, a pop-up currency exchange operated by sheep at North Bondi Surf Life Saving Club. The initiative, described by Wise as a tongue-in-cheek response, will include free yoga sessions featuring live sheep, educational challenges, merchandise giveaways, and complimentary drinks provided by a local Bondi business.

Anhar Khanbhai, Wise Chief Anti-Fleece Officer, addressed the findings, stating, "The Big Banks have been pulling the wool over Aussies' eyes for years, sneaking in hidden fees that would make a ram blush. They're making a mint off people's hard-earned holiday money, and this type of baa-d behaviour is shear madness that needs to stop."

Khanbhai continued, "We're bringing sheep to Bondi to ram home the message that Aussie travellers deserve transparency and this upcoming travel season they should have absolutely zero tolerance for all kinds of financial and travel fleece-ery."