Jetting off on holiday? Tips for managing your money overseas

Sep 09, 2019
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Using your money incorrectly overseas may cost you more in the long run. Source: Pixabay

One of the perks of retirement is having the freedom to jet off on holiday, giving you the chance to tick all those exotic overseas dream destinations off your bucket list. They’re the adventures many people wait their whole lives to experience and whether it’s finally taking that dream trip to Paris with your partner, watching a Broadway show in the Big Apple or even taking a quick weekend trip across the ditch to New Zealand, people need plenty of money to support them on their holiday.

While accessing your money on a day to day basis is as simple as withdrawing from an ATM or walking into a bank branch at home, it’s not always that easy overseas and pricey fees and exchange rates can make accessing your cash an expensive task. Similarly, carrying around large amounts of money can leave us open to theft.

Starts at 60 is looking at the top tips you need to know when it comes to managing your money overseas.

Credit and debit cards

Credit and debit cards provide many people with convenience at home and they’re also an option for travellers who may need to pay for car rentals, hotels, meals and other holiday costs abroad. According to Finder, most Australian credit cards are Visa, Mastercard or American Express, all of which can be used widely around the world.

Unlike travel cards, debit and credit cards usually don’t lock in a currency rate and will charge a currency conversion or foreign transaction fee, but this can vary between providers and should be considered before you sign up for a card. These cards can also be used to withdraw money from ATMs in cases where cash is needed but again, this can come with fees which can add up if you’re withdrawing cash a number of times on the holiday.

Most credit cards cover theft and fraudulent activity and may also come with extras such as earning reward points, free travel insurance and purchase protection. It’s always advised to carry another form of money in case a credit card is lost or stolen and to make your bank or provider aware of your travel plans before heading overseas. Similarly, check with your provider to see if your card offers free currency conversion or other travel perks.

Pre-paid travel cards

Pre-paid travel cards are a popular option for many people travelling overseas and work very similarly to the ATM and credit cards you use here at home. Before you take off on holiday, you simply purchase a pre-paid travel card, load it with money, lock-in an exchange rate and you’re ready to go.

Most cards come with an app that can be installed on your smartphone so you can easily keep track of your funds and add additional money, but it’s important to know that there may be a fee when loading more funds onto a card and that it can take some time for funds to become available to use.

If you’re heading to more than one country on your adventure, these cards do let you load various currencies, but it’s vital to check with a provider to ensure your destinations currency is supported. Most providers supply people with a back-up card so if you lose the first, you can block it and start using the second.

It should also be noted that the exchange rate can be worse on travel card so while you are locking in a currency, it might not be the best deal. The Australia Post Travel Platinum Mastercard, Travel Money Oz Currency Pass, Westpac Global Currency Card Cash Passport Platinum Platinum Prepaid Currency Mastercard are all examples of travel cards that are free to purchase in Australia.

Cash

While credit, debit and travel cards have grown in popularity, travellers are also advised to have some cash on them when they head overseas. Technology doesn’t always work and if a bank is experiencing difficulties, it could mean you won’t be able to access your cash. Similarly, some shops, cafes, restaurants and other tourist destinations will only accept cash and if you don’t have any, you could get stung with ATM fees if you’re forced to withdraw cash overseas.

There’s usually a limit to the amount of cash you can take into a foreign country and for security reasons, it’s not advised to carry around large amounts of cash. Still, have enough to cover small purchases in case of an emergency. Foreign cash can be purchased in Australia before you head overseas and lock in an exchange rate, but be aware that it could cost more to purchase cash at an airport.

Cash is usually accepted everywhere and can also come in handy for locations which have a minimum purchase fee for card payments. But you should also be aware that some locations won’t accept large denomination notes, so you’ll want to have a variety of notes with you.

Travellers’ cheques

They’re less common these days but some people still prefer to use traveller’s cheques when travelling overseas. According to Choice, less banks offer traveller’s cheques and fewer places overseas now accept them.

Still, they may be useful if you’re travelling to a location with few ATMs or card terminals and they provide travellers with added security as they can be replaced if they are stolen or lost – providing you’ve still got a record of the serial numbers on the cheques.

It’s important to know that traveller’s cheques do come with fees and commissions which can end up costing more than cash in some instances. Similarly, cashing in a cheque overseas can also come with fees and not all banks of outlets will be able to exchange them, so do your research before you travel. Travelex and American Express both still sell traveller’s cheques.

Where to check currency rates

There are a number of different websites that allow people to check currency exchange rates, but it’s important to know that the rate can vary between providers. The major banks including Westpac, Commonwealth and NAB all have their own individual currency converters and calculators, as do other providers including Travel Money Oz, TravelEx and Global Exchange.

These websites usually allow you to purchase currency online and pick it up in store of your convenience. This is sometimes advised as banks and other outlets may not always have the required funds if you simply walk into a store and request an exchange.

How do you manage your money overseas?

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