Each year Visa releases their Travel Snapshot study, detailing the spending habits of Visa cardholders traveling to and from the United States, Mexico, Canada, and Brazil. Their just-released 2011 report shows that members increased their international travel spending yet again – 2010 also showed an uptick – and tourism spending numbers may soon even be back at pre-recession levels.
Ava Kelly, head of cross border initiatives at Visa, says “Tourism is a key contributor to economic growth so this upward trend in international travel expenditures can provide some welcome revenues for growing countries like Mexico and Brazil as well as the U.S. and Canada.”
Where Does the Money Go?
- Visa card holders from the U.S. spent $3.5 billion in Canada during 2011, an amount that makes sense considering the ease with which Americans can travel to neighboring Canada. A more difficult destination to reach, China, showed a 27 percent increase in spending by U.S. Visa members – $941 million in 2011 compared to $741 million in 2010.
- Brazil, meanwhile, was a huge contributor to international tourism economy during 2011. In the United States alone, Visa account holders from Brazil spent $1.9 billion in 2010 and $2.7 billion in 2011, a 41 percent increase that puts them in second place as highest spenders on U.S. tourism. Brazilians also increased their spending in Mexico by 56 percent, Italy by 44 percent, the United Kingdom by 41%, and France by 30 percent. Brazilians, according to Time Magazine, spend more on tourism per capita than people from any other country, shelling out $5.9 billion total in the U.S. in 2010 (the $1.9 billion figure is the amount spent using their Visa cards).
- South of the border, Russian Visa holders upped their spending in Mexico by 73 percent, while Argentineans spent 58 percent more and Peruvians and Columbians were tied at a 30 percent increase.
- The top three Visa-spending nations in Canada were the United States ($3.5 billion), France ($351 million) and the United Kingdom ($348 million), but Chinese visitors to Canada injected a healthy $321 million into the Canadian economy using their Visa cards.
Foreign Fees = No Fun
Whenever travelers use their credit cards in foreign countries, they need to be aware that many cards charge foreign transaction fees, which used to be called currency conversion fees. These are usually around 3 percent, and are charged whenever cardholders process a transaction in another country. There are cards that don`t charge this fee – in November 2011 Discover did away with foreign transaction fees on all its cards, something Capital One had already done. For frequent travelers, carrying a no-foreign-transaction-fee card should be a no-brainer.
When traveling in another country, you should also beware of fees that many banks charge for things like withdrawing cash from ATMs or using debit cards. Always check with your bank if you are unsure what their policies are on foreign transactions.
So, where would you like to go? We hear Brazil is nice this time of year – perhaps Americans should return the favor and throw a little money into the Brazilian economy, while sunbathing on the Brazilian beach. Bon Voyage – and don`t forget your no-transaction-fee credit card!