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The Boomers Travel Guide

Millennial Guide For Baby Boomers and Generation X

When we think about travelling, a holiday is one of the top reasons that pop into our heads, but holidays come at a high expense. National research has found that UK residents spent £45.4 billion on visits abroad in 2018.

We looked over the stats for the past few years, and found that out of £1.5 billion payments abroad, 1 in 5 debit cards payments are made by the UK residents travelling abroad and credit card payments made outside the UK has increased in recent years, reaching 467 million payments.

Now that 2020 is here, everyone is planning their next family trip abroad, so we’ve decided to make your trip even better by taking the travel savings advice from the largest travel group in the world; the millennials.

Millennials (and Generation Z) make up the largest portion of current population and in 2018 they spent over $200 billion on travel. However, millennials earn less when compared to their parents, yet they manage to make more holiday trips and represent the next wave of travellers, making them the perfect candidate to take the advice from.

We believe that baby boomers and generation Xers can learn a lot from the millennials when it comes to travelling abroad, especially from the savings perspective.

What did We Do?

We looked at millennial travel habits and combined them with our own research on travel payments, creating this guide to help those from previous generations save money on their trips abroad! Here is a breakdown of what we did:

  • We’ve analysed millennial travel habits abroad, by looking at the travel, savings and payments data from multiple researches conducted in the past.
  • With card payments being such an important factor when travelling abroad, our first port of call was to find the best card when travelling abroad. But with so many cards it’s no easy task. But we found a way!
  • Taking the millennials research into account, we’ve decided to look at available payment methods and conduct our own research into various payment cards to understand which are the best to use abroad and to check if we can support the millennial payment decisions.
  • We’ve compared 45 various bank cards, including credit cards, debit cards, travel credit cards and multi-currency cards. We rated the cards based on 11 data points, creating a unique index value for each. To find more information on the data points we used, check our methodology section at the bottom of the page.
  • But we didn’t stop there… We’ve made our own “Boomers Travel Guide”, where we’ve taken all the best habits from millennials and turned them into actionable advice that Boomers and Generation Xers to follow to save money whilst travelling.

The Millennial Travel Trends

We’ve looked into the previous research on millennial travel habits to understand how Gen Y saves money when looking for a holiday as well as during the holiday. We analysed the previous data and pulled out the most important millennial travel habits that can help older generations save money on their trips abroad.

However, who are the millennials? Researchers and popular media use the early 1980s as starting birth years for millennials (a.k.a Generation Y or Gen Yers) and the mid-1990s to early 2000s as ending birth years, with 1981 to 1996 a widely accepted definition. Gen Zers is the generation succeeding the Millennials, where as Generation X are preceding millennials, followed by baby boomers preceding the Gen Xers.

Below we’ve broken down our findings to understand what are the millennial trends when it comes to travelling and saving abroad.

Millennial Holiday Habits

  • Millennials earn less compared to previous generations [13] but tend to save money for regular travelling rather than buying a car or a house[3]. They tend to prioritise financial stability, longer term holidays and planned trips abroad [1][2].
  • Gen Yers want and care about experience more than about physical possessions [4][10].
  • They spend more time researching, reading and planning their trips. A common philosophy is “You have to spend time figuring out what to do to make the most of the time that you have on your trip” [5]. 
  • Millennials tend to use social media such as Facebooks to find holiday deals and inspire their trips abroad [6]. As well as they tend to use travel apps and will check multiple travel and review sites to find the perfect trip [6].

Preferred Payment Options By Millennials

  • Millennials are placing greater importance on the reward and loyalty programs offered [15]. They will stay loyal to the company that offers the most rewards such as cash, freebies, miles, discounts and more [8][15]. 
  • They tend to have travel-focused savings accounts to use when travelling abroad [5]. 
  • Gen Yers from Australia, U.S and India tend to use credit and debit cards more, compared to British millennials who prefer using the cash. Whereas boomers and Gen Xers are likely to use the credit cards [9]. It was also found that millennials use bureau de change much less compared to previous generations. 
  • Digital payments, prepaid cards, challenger banks and virtual wallets are most popular and one of the most preferred payment options amongst millennials compared to other generations [7]. Making them the savviest compared to previous generations. As well as, Generation Y tends to spend in groups and have empowered the Peer-to-Peer payment types (E.g. Zenmo, Paypal, Transferwise).
  • Millennials tend to have less credit cards, and are more selective about the cards they use. They prefer cards from brands rather then traditional banks [7].

The Card Fees Index

Following the millennial payment preferences from the research, we’ve decided to conduct our own research into various payment methods to check if we can support the millennial payment preference and understand which cards are the best to use when travelling abroad.

To build the index, we’ve taken all the major traditional cards (debit and credit cards) and compared them to the payment types of millennial choice (currency cards, challenger banks and travel credit cards).

For each of the cards in the index, we’ve looked at 11 different data points (relevant to travelling abroad) and rated each based on the data found, creating an index value for each of the cards. We’ve done it to visualise and highlight the difference between the previous generation and the future generation of payment cards.

What Are The Types of Cards We’ve Compared?

Based on the index created, we can see that currency cards are the best to use when travelling abroad. Followed by debit cards from challenger banks and travel credit cards. Before we get into individual providers, let us explain the difference between the card types below:

Credit Cards – a card issued by a bank, building society, etc., allowing the holder to purchase goods or services on credit. 

By using a credit card abroad, you will be charged interest on purchases and cash withdrawals as well as conversion and other fees.

Debit Cards – a card allowing the holder to transfer money electronically from their bank account when making a purchase.

By using a debit card from a high street bank abroad, majority of the time you will be charged a fee for using your card, non-sterling transaction fee on purchases and withdrawals and other fees depending on the provider.

However, newly established challenger banks, don’t charge you as many fees for using your card abroad. A challenger bank is a smaller retail bank set up to challenge and compete with larger, more established high street banks. One of their core strengths is the lack of fees compared to the high street bank. An example of the challenger bank is Monzo, Revolut and Starling Bank. 

Travel Credit Card – travel credit cards are similar to classic credit cards but have lower interest rates and fees on purchases and withdrawals abroad. These cards often come with a loyalty scheme where you can earn points or miles with foreign transactions. 

Currency Cards (also known as travel cards & travel prepaid cards) – travel cards come as a single currency or multi-currency cards. Multi-currency cards let you store multiple currencies, and some offer multiple international bank accounts on a single card. 

Multi-currency cards come with built-in conversion tools, where you can convert sterling to the local currency at the mid-market rate and spend it abroad without withdrawing cash or making a single transfer.

What Are The Best Cards to Use Abroad?

Some of the top cards to take abroad are TransferWise and Revolut, followed by other currency cards and challenger banks such as Starling Bank, N26, Metro Bank and Monzo (supporting the millennial travel choices [7] ).

To put it into perspective, we’ve broken down some of the top cards to outline the benefits and the fees you’ll pay for using it abroad.

Imagine this: you’re travelling to Spain for 10 days with your family. You realise you need some cash so opt in to withdraw £100 3 times throughout your vacation. You also make £20 card purchases every day (buying breakfast, treats for kids etc..) and make 3 £50 transactions from your card. Now let’s break it down:

Currency Cards and Challenger Banks

TransferWise Borderless Account

With Transferwise borderless card, you’ll pay £0 in withdrawal fees for the first £200, after that it’s 2%. Followed by other purchases, you won’t pay any penalties, conversion fees or any other fees, no matter if you pay in sterling or euros. You also have an option to convert sterlings to euros at a mid-market rate for 0.35% using your Transferwise account to benefit from better rates.

In total, you will pay £2 to make these purchases & withdrawals (if you decide to keep British pound on your card).

Lloyds Debit Card

Compared to a classic debit card from Lloyds bank, you will have to pay:

  • Withdrawal – foreign currency transaction fee of 2.99% of the amount of the transaction.
  • Withdrawal – foreign currency cash fee of £1.50 for each withdrawal.
  • Purchases – foreign currency transaction fee of 2.99% of the amount of the transaction.
  • Purchases – foreign currency purchase fee of £0.50 for each payment.

Putting this together, you’ll pay £25.95 in fees. That is 171.37% more expensive compared to Transferwises £2 fee.

Revolut – Standard

Using the same scenario with the Revolut card, you will be paying the same as with TransferWise, £2 in total. With few minor differences, Revolut supports less currencies (28 compared to 48 from Transferwise) & there is a 1% conversion fee on weekends. On the other hand, Revolut is a challenger bank, whereas Transferwise is just a borderless card linked to your account.

Starling Bank

Now Starling Bank is different. You pay no fees at all on purchases and cash withdrawal, but you’re capped at £300/day withdrawals. This is better than Transferwise and Revolut, right? Yes and no. 

With Starling Bank, you only get 1 currency, GBP. So if you travel abroad, you’ll always pay in sterling, which will be converted at no fees and MasterCard rate, however, the rates might fluctuate. With the first two cards, you can pre-convert your money before the trip, to benefit from the good rate and money will be there no matter how the rates fluctuate. With Starling bank, you’re can be affected by the rates.

This is why we you must choose a card for your needs. If you’re travelling from the UK to the EU, exchange rates might fluctuate a lot due to Brexit (as we’ve discovered before). So it might not be the best card to use right now.

Travel Credit Cards

Travel credit cards are different to currency and debit cards from challenger banks. The main factor you’re looking at is the representative interest rates, fees and reward systems. Our research on millennials has shown that rewards is one of the top factors that keep millennials loyal to their cards. So make sure you keep an eye on the loyalty program.

Traditional credit cards will charge you transaction and withdrawal fees as well as the interest rate. Where as travel credit cards will charge you no fees abroad, lower interest rates and will award you bonuses/points/miles for using it during your holiday.

As you can see, most of the top providers have very similar fees, so it’s worth researching the cards for your specific needs and check out what benefits, loyalty and reward programs each card has to offer. 

The Boomers Travel Guide

Based on all the research above, we’ve put together our own boomers and generation X travel guide. While the millennial habits provide the information, and the index defines the top payment methods to use abroad, it’s important to know how to apply this information when travelling to minimise the fees, find better deals and save money abroad.

Ok Boomer – Top Tips to Follow

1. Choose the right card
2. Avoid ATM fees & Beware of Dynamic Currency Conversion
3. Don’t forget the security deposits
4. Avoid bureau de change at airports, ports and bus stations
5. Stay safe and avoid scams
6. Give your kids a prepaid / currency card
7. Research before you travel
8. Plan your holiday in advance
9. Find the best reward programs
10. Travel with friends

The Boomers Guide

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Methodology

  • To gather the data for our millennial research, we’ve analysed several studies conducted in the past. We’ve made sure to look for credible sources, which can be found at the bottom.
  • To build our index, we’ve looked at the different types of cards you can take abroad. These include classic credit cards, travel credit cards, debit cards and travel cards also known as currency cards. We’ve looked at traditional banks and challenger banks for comparison.
  • For each card we looked at the exchange rate markup, spending cash abroad fees, cash withdrawal fees, minimum exchange fees, non-sterling transaction fees, the price of the card, sending money fees, currency conversion fees, supported currencies, interest on cash withdrawals and purchases.
  • In order to determine the index value, we’ve created a high and low values for each of the data points and combined them together. This way we were able to get the most reliable results.
  • To ensure the validity of the research, we’ve picked the data points that would be the most appropriate for travelling abroad, this way we were able to keep them consistent for different types of cards.
  • We haven’t considered loyalty programs in our index as it would vary a lot by the provider and time of the year. But most travel credit cards will offer bonuses, points or miles for spending money abroad.
  • We’ve taken all the information represented on the card provider websites. For the credit cards, we used the most appropriate APR that is likely to be given to 51% of the customers.

Sources

Artiom
Written by
Artiom

Artiom coordinates the PR and Outreach for MoneyTransfers.com. A marketing graduate from the University of Portsmouth, Artiom’s primary experience is in PR and Outreach but he has a broad knowledge of search engine optimisation and all facets of digital marketing. He optimises the organic experience on MoneyTransfers.com with the content team manages and creates unique marketing tactics, and generally supports the overall growth of the website.

Millennial Guide For Baby Boomers & Generation X