Whether you need multiple currencies for your Eurotrip or are planning how to pay your way through Peru, we’ve got you covered when it comes to comparing your travel money options for your next overseas holiday.
Travelling overseas involves a lot of planning, but organising your travel money isn’t something you want to procrastinate. You’re not strapped for options when it comes to choosing the right travel money tool, but there’s no one perfect solution. Instead, the best option will depend on your finances, spending habits and travel plans. To make things easier for you, we’ve summarised the features, benefits, drawbacks and costs of the major travel money alternatives available on the Australian market to help you compare and find the right one for you.
So you didn’t get the time to shop as much as you’d planned, and you’ve still got preloaded foreign currency left unspent on your travel money card. All isn’t lost. You can still get that money back. Read on to learn how >>.
Although prepaid travel cards let you lock in currencies before you go overseas, not all currencies are supported. Here are the options to pay less fees and ensure you get the best rates. Read this guide >>.
How to decide which type of travel money card is for you?
The right travel money option for you will depend on your holiday destination, how you plan to use the card and what you can afford. Prepaid travel cards, credit cards and debit cards all have their uses, but the differences lie in their features and fees. As such, many travellers opt for more than one type for greater convenience and security.
Here you can compare the different travel money options available on the Australian market to discover which one offers you the best value for your next holiday.
Prepaid Travel Money Cards
When you load Australian dollars onto a prepaid travel card, you can transfer them into the supported currencies (such as USD, UKD and NZD) so that you can spend or withdraw your own funds without the cost of currency conversion fees while overseas. To determine whether a travel card is the right choice for you, weigh up some of the pros and cons below.
Benefits of using a prepaid travel card
Multiple currencies. You can use your travel card to convert your Australian dollars into your chosen supported currency. When you spend in a supported and loaded currency, you can avoid the currency conversion fees you’d usually be charged if you were using an Australian card overseas.
Locked-in exchange rates. When you convert your Australian dollars into the supported foreign currency, the funds will be locked in at the exchange rate at the time. Depending on which way the currency goes, this can be a good way to avoid negative exchange rate fluctuations while you’re travelling.
Things to consider using prepaid travel cards
Availability. Most Australian prepaid travel cards are either Visa or MasterCard, meaning you can use them worldwide. While you can still use your card if the local currency is loaded or supported by your card, you’ll incur a currency conversion fee.
Fees. The fees you’ll have to pay will depend on the card, but some include a purchase fee, loading or reloading fee, currency conversion fee, inactivity fee and account closure fee.
Currencies. Your prepaid travel card will support a number of foreign currencies, though the exact ones will depend on the individual card. Look out for cards that support the local currency of your travel destination, otherwise you’ll have to shell out currency conversion fees each time you spend.
Jeremy stood shoulder to shoulder with locals and tourists, trying to keep his footing as the metro made its way towards the Colosseum. As more and more people packed onto the train, Jeremy lost his girlfriend to the glacial movement of the crowd pulling her towards the back. When he felt a brush against his rear, he was a little surprised but thought nothing of it and put it down to one of those 'packed train moments'.A moment was all the pickpocket needed to steal Jeremy's wallet.
Jeremy got on the phone to his card protection service, Secure Sentinel. A call to this service is supposed to be the 'one stop shop' for cancelling cards, but Jeremy ended up having to call each bank separately, which led to a number of frustrating hours spent on the phone, instead of hours negotiating in Italy's famous tourist traps.
Luckily for Jeremy, he had done his homework. Jeremy is a publisher at finder.com.au, so he knew to get a prepaid card before he left - they come with a backup. To his girlfriend's delight, the backup card saved their trip and they were back on the streets of Rome the next day; albeit with an eye on their pockets. It almost wasn't such a sure thing. Like any smart traveller should, Jeremy had done his research before he left the country and he knew to spread his money between a couple of cards and his girlfriend.
Be like Jeremy and do your homework before you leave.
Enjoy financial security, flexibility and extra features with a credit card. Look for a credit card that is designed for overseas use, preferably one that doesn’t charge currency conversion fees, foreign transaction fees or overseas ATM withdrawal fees. If you have a prepaid or debit card for everyday purchases, you might want to leave your credit card for emergencies. Plus, credit cards come with features like overseas travel insurance, a concierge service and rewards programs that could come in handy on your travel. Credit cards tend to be expensive though, so you can weigh up the costs and the benefits here.
Benefits of using a credit card overseas
Access to credit. Credit cards offer greater financial flexibility than debit or prepaid cards. A line of credit is often larger than your savings, which can come in handy for large or emergency purchases. Remember that you have to repay everything you charge (plus interest) to the card.
Rewards. Earn rewards points as you spend on eligible purchases or, even better, bonus points when you spend overseas. These cards are typically more expensive though, so make sure that the value of the rewards you redeem will outweigh the costs.
Extras. Credit cards designed for overseas use often come with travel perks such as complimentary overseas travel insurance, purchase protection and concierge services.
Considerations when using credit cards for travel
Availability. Most Australian credit cards are Visa, MasterCard or American Express, so you should be able to use them widely around the world. Some cards can’t be used in some locations (such as Cuba, Iran, Myanmar, North Korea, Sudan and Syria) due to economic sanctions. Check with the provider to confirm whether your card can be used in your holiday destination before you leave.
Fees. If you use your regular credit card overseas, it’s likely you’ll be charged currency conversion or foreign transaction fees. You’ll also be charged cash advance fees if you use your card for ATM withdrawals. Cards designed for overseas use tend to come at a cost, so make sure that the cost of the annual fee doesn’t outweigh the benefits you get from the card. Unless you have a card with 0% on purchases or interest-free days, all purchases will also collect interest.
Currencies. Look for a card that doesn’t charge currency conversion or foreign transaction fees, otherwise you’ll rack up fees every time you use your card for purchases in the local currency on your holiday.
Travel debit cards draw funds from a savings account and enable you to access your funds whilst overseas and manage your budget. The advantages of using a debit card can include international ATM alliances and no withdrawal fees, no currency conversion fees on foreign transactions and access to your savings.
How debit cards can benefit you overseas
Access and manage your own cash whilst travelling. Unlike a credit card with a line of credit or a prepaid card with a loaded amount of funds, a debit card gives you direct access to your savings. This saves you the inconvenience of loading a prepaid card but might deter the overspending that comes with credit.
Fewer fees than credit cards and prepaid travel cards.If you get a debit card designed for overseas use, you might not have to pay ATM withdrawal or currency conversion fees.
ATM availability worldwide.If your debit card is a Visa or MasterCard, you should be able to withdraw from ATMs around the world. To avoid ATM withdrawal fees, look for a card that belongs to the Global ATM Alliance.
Card fraud protection.Your provider is likely to offer protection against fraudulent transactions made on your account so long as you follow the requirements.
Considerations to keep in mind
No emergency cash facilities. Unlike a prepaid card, you won’t receive additional cash in the case of an emergency.
No backup/ additional card. Different to travel or credit cards, debit card accounts do not provide a backup. This means that you may have to wait up to two weeks for a replacement to arrive to your overseas destination.
Daily currency exchange rate. You will receive the daily exchange rate for your withdrawal from MasterCard or Visa. Due to the uncertainty of exchange rates this may be favourable or provide a lower rate than securing with a prepaid travel card before you leave the country. As a result having some funds available on a debit card for ATM withdrawals and purchases can come in handy.
Holding a certain amount of cash/foreign exchange provides convenience and payment flexibility for your travelling needs. It is commonplace to exchange a practical amount of currency in Australia for when you land (for taxis, travel tariffs, food etc) to ensure a smooth transition into your new holiday destination.
Knowing how the Australian dollar (AUD) has performed against the foreign currency in the past few years and the months where it typically peaks will enable you to secure the best exchange rate for your foreign exchange transaction. Our travel money guides will inform you on some of the ways to access cash and ATMs worldwide.
The most commonly asked travel money questions on the internet
What are the travel money card exchange rates?
Travel credit cards typically use the MasterCard or Visa network and use the daily exchange rates that the networks provide. You can find out the daily exchange rate by going to the MasterCard or Visa website. Travel prepaid cards usually have a lower exchange rate due to being able to pre-load your currencies, additional travel features available (spare cards, loading multiple currencies) and the bank charging a larger margin in return for providing these services.
What is a cross currency conversion fee?
A cross currency conversion fee is charged when you use your Australian card with Australian dollars to make a purchase in a foreign country. The money is exchanged from Australian dollars into the local currency electronically.
How can I avoid ATM withdrawal fees?
Banks who have international ATM alliances will allow you to withdraw cash for free. Westpac have one of the largest ATM alliances out of any Australian Bank. Global lenders like Citibank and HSBC have a number of ATMs worldwide, and Citibank do not charge for international ATM withdrawals. So if you're a Citibank customer looking to use your card overseas, head to a Citibank ATM and all you'll pay for the withdrawal is the currency conversion fee.
Can I load my existing credit card into a positive/ credit balance to avoid fees (ATM withdrawal, currency conversion, cash advance fees)?
Although this method of loading travel funds is rarely disclosed in the banks terms and conditions, loading your credit card into a positive balance can avoid the cash advance interest rate.
As smart travellers have continued to use this method, banks have made changes to their fees and charges. The following fees may still apply when you load your account into credit:
International ATM withdrawal fee. Charged when you withdraw cash overseas.
Currency conversion fee. This amount is calculated based on the total of the international ATM fee and the amount being withdrawn.
Local ATM operator fee. This can be avoided by using an ATM with your bank's overseas ATM Alliance (if they have one). The cash advance rate of interest will apply from the day the transaction takes place.
Travel insurance from credit cards or from a travel insurance company?
Many premium credit card issuers will offer complimentary travel insurance as an added bonus for successful applicants. The decision on whether to go with this complimentary cover or to purchase a standalone policy will really come down to your cover requirements and budget. While the cover provided on credit cards may not offer the same comprehensive level of cover as that from a travel insurance issuer, you may already have other cover in place from other insurance and feel that your trip requirements don't need the cover options available on standalone policies. Either way it's important to compare the benefits available from both options and get a clear understanding of the exclusions for payment. The last thing you need when travelling is the nasty surprise that you are not actually covered for losses in the event that you need to make a claim.
When are inactivity fees charged with prepaid travel cards?
If you have a travel card that has an inactivity fee (a fee that's charged every month when your account is inactive for a period of time), you will lose any remaining funds on the card, but your account won't go into a negative balance. Once the card has no funds left on it, this fee will not be charged.
Activating complimentary travel insurance with credit cards
The eligibility requirements will differ between policies, but a general rule is that you have to pay for a percentage of your prepaid travel expenses with your card or by simply logging into your account online and activating the policy with your trip details (departure date, travel destinations etc). Once you've done this, you're automatically covered under the policy agreement — although keep in mind that each policy has a list of exclusions that you should check before travelling.
Are travel money belts still a safe option?
Usually the most practical solutions aren't the most appealing to the eye. Travel money belts keep your money and important valuables/ documents safely tucked in a
compartment under your shirt to minimise the risk of theft and loss. If security and peace of mind is your first priority when travelling and you don't mind a piece of fabric strapped around your waist, then investing in a travel money belt will protect your travel money cards and important valuables.
Compare Travel Insurance Quotes from Australian Companies
It's critical to compare quotes from a range of issuers to ensure you get adequate cover for your trip at the right price. Use the form below to compare quotes from Australian travel insurance companies and access coupon codes to help you save even further.
Are you considering travel insurance for your trip?
Finding the right money option for your trip overseas is just one of many boxes to tick before leaving the tarmac. Whether you are just heading off for a weekend getaway or a six month backpacking adventure, it's crucial to have the right cover in place to ensure you don't have to endure financial hardship in the event of a loss. Most people that have travelled will have their own story of when things didn't go exactly to plan and were forced to hand over funds to cover the loss.
What am I covered for? Travel Insurance will generally provide cover for the following events:
Overseas medical expenses: Covers the cost of emergency medical assistance including emergency medical evacuation, hospital expenses and medical costs.
Theft of cash: Cover in the event that the following are stolen from you: cash from your person, banknotes, currency notes, postal orders and money orders.
Cover for loss or damage to personal items: Cover for loss/damage to luggage and personal items.
Cancellation fees: Cover for cancellation fees or lost deposits.
Rental vehicle fees: Cover for rental vehicle excess that may be applied in the event that you have an accident while you are travelling.
Credit card fraud or replacement: Cover for the replacement of credit cards lost or stolen from you on your journey.
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