12 travel money mistakes to avoid on your next holiday

These common money issues can put a damper on any overseas trip. Here's how to escape them and enjoy your holiday.

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Even the most seasoned travellers have to deal with some of these pitfalls. So if you want to make the most of your travel money, check out these 12 common mistakes and what you can do to avoid them next time you travel.

ANZ Travel Card

Travelex Money Card

  • Up to 10 currencies on 1 card
  • Lock in exchange rates
  • No overseas ATM fees

Travelex Money Card

Load and hold up to 10 foreign currencies at a time. Lock in exchange rates. Pay nothing for international ATM withdrawals.

  • No international ATM fees
  • 24/7 emergency assistance
  • Access wherever Mastercard is accepted
  • PIN security
  • Prepaid so you can manage your spending
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1. Only having one travel money option

If you just take a huge wad of foreign currency with you, there's a greater risk that you'll end up stranded without any money if it's stolen. Cash is also difficult to insure, which means you really could lose out if it's your sole option. While only taking one card could mean you get reimbursed for any lost money, it doesn't change the fact that you'd be stuck with no way to pay if anything happened to the card.

How to avoid limited travel money options

Aim to take at least two different cards with you when you travel, such as a travel money card for your everyday spending and a credit card for emergencies. It's also a good idea to take some cash in the local currency so you have an easy way to pay when cards are not accepted.

2. Using a travel card that doesn't offer the local currency

Travel money cards help you avoid foreign transaction fees and changing currency exchange rates – but only if you're spending in a currency that you've loaded onto the card. While you can usually pay with a travel card even if you don't have the local currency on it, you'll usually be charged fees for the transaction.

For example, say you were going to Bali and had a travel card that didn't offer Indonesian rupiah. Every time you used the card, a currency conversion rate would apply to the transaction, making it hard to keep track of your balance. Depending on the card, you could also be charged a currency conversion fee worth around 3% of each transaction.

How to avoid these fees

Make sure you compare travel money cards to find one that lets you load funds in the currency that's used wherever you're travelling. This also gives you a way to lock-in an exchange rate before you go so that you know how much of the local currency you can spend when you're away. If you can't find a travel card that supports your currency, check the exchange rates and consider other cards – such as regular debit cards or credit cards – to find one that offers low or 0% foreign transaction fees.

3. Writing your travel card PIN down

Carrying the details of your travel card's PIN with you makes it even easier for someone to use the card if your wallet is lost or stolen. The same goes for the PINs on any other cards you take overseas.

To make matters worse, it's less likely you'll get a refund for transactions that are made with a stolen card if you don't keep your PIN secret. So writing it down (even if it's in "code") is a bad idea.

How to remember your PIN without writing it down

Some travel money cards give you the option of choosing a PIN to make it easier to remember. You can usually do this online, or call the provider and explain that you'd like a more memorable PIN. Another option is to use memory exercises – such as repeating it out loud, finding a pattern or using it to pay before you go overseas – until it's fixed in your mind.

4. Exchanging money at the airport

Airport exchange booths and services typically have less competitive rates than those found elsewhere. They may also charge you a fee for the service. This is because airport exchange services know there will be travellers who have left their travel money to the last minute and who are willing to take whatever they can get. But generally, you'll get a better deal elsewhere.

How to avoid airport money exchange services

Plan ahead and get your foreign currency from a service in Australia. This gives you the chance to shop around for a competitive exchange rate and avoid extra fees in the process. Just make sure you leave enough time to get the currency as some of the more competitive services need to order it in for you.

5. Exchanging money with street vendors

If you need to exchange currency when you're overseas, street vendors could seem like a convenient option. But there is a risk of getting ripped off by people looking to make some easy money off tourists.

Other options for exchanging money when you're overseas

Look for an established and reputable foreign exchange service or bank and remember to shop around. Ask about rates and fees before you show your money, make sure you get a receipt and count the money out loud both when you pay and when you're given the currency in exchange.

6. Not reloading your travel card before the balance is $0

Adding money to your travel money card can take several business days, depending on the transfer method you use. For example, a bank transfer could take up to two business days, while a BPAY payment could take up to three days to show up on your card. So if your balance is already at $0 before you do the transfer, you could be stuck without your card for a couple of days.

How to avoid having no money on your travel card

Keep track of your balance through the online account portal and add money when you still have a balance that will last you for the two to three days it could take for new funds to be transferred. Also, find out from your travel card provider if there are any instant-transfer options.

Remember to add the local currency to your travel card

If you're transferring money from your Australian bank account to your travel card, you need to convert it to the local currency to avoid conversion charges. You can do this by logging in to your online travel card account and following the steps to convert it to the currency you need.

7. Using public Wi-Fi for banking

Public Wi-Fi connections are less secure than private or password-protected connections. This makes it easier for hackers to get your details if you use a public Wi-Fi service to check your account balance, load more funds on your travel card or for anything else.

How to securely log in to your accounts overseas

If you have to use a public Wi-Fi connection, only visit banking sites that start with "https". This offers slightly more security than a site that starts with "http" because the details are encrypted. Better still, you could set up a VPN (Virtual Private Network) that creates a more secure connection that helps protect your personal data.

8. Using a lot of ATMs to withdraw cash

The fees you'll pay for using overseas ATMs can quickly add up, with many Australian debit cards and credit cards charging a transaction fee each time you use an overseas ATM. This fee could be a fixed cost (ie, $2 per transaction) or a percentage of the withdrawal amount. It's also separate to the currency conversion fee.

With prepaid travel cards, different fees apply depending on the card and currency you're withdrawing. Sometimes, the ATM operator will also charge a fee on top of the ones that come with your card. Beyond these costs, there's also a greater risk of card skimming if you're using a lot of different, unfamiliar ATMs.

How to reduce overseas ATM fees

First of all, check what charges apply before you travel and compare debit cards and credit cards that offer no overseas ATM fees. When you're overseas, making larger cash withdrawals helps cut down on the number of ATM fees you pay. It also reduces the security risks by limiting how many times you enter your card details on different machines.

Watch out for credit card cash advance fees at ATM

If you use a credit card to withdraw cash from an overseas ATM, you'll be charged a cash advance fee worth around 3% of the transaction. The card's cash advance interest rate will also apply to the balance. This is the case even if your credit card offers no ATM withdrawal fees.

9. Using your regular debit card or credit card

With foreign transaction fees ranging from around 2% to 3.4%, the costs can quickly add up when you use an everyday debit card or credit card overseas. This fee is often charged based on the cost in Australian dollars, which varies depending on the exchange rate that's used for that day. As a result, you won't know how much you've spent until it shows up on your account.

Even if your card doesn't charge foreign transaction fees, the changing exchange rate will make it hard to keep track of your spending. There could also be other costs, such as credit card interest charges and cash advance fees, that eat into your spending money.

How to save on debit card and credit card fees when you travel

While taking your everyday credit card or debit card with you when you travel is a good idea for emergencies, make sure you check the fees that apply and limit how often you use it. Both foreign currency and travel money cards also offer you ways to spend money without paying an overseas transaction fee or dealing with fluctuating exchange rates.

10. Not telling your bank that you're going away

Both debit cards and credit cards offer fraud-monitoring services that look for suspicious transactions. So your bank may freeze your account if they see transactions being made overseas and can't call you to confirm that you're making them.

How to avoid having your card blocked when you're overseas

Contact your bank and let them know the dates you'll be away and where you're travelling. This will also help them protect you against any actual security risks while you're overseas.

11. Making card purchases in your home currency

Sometimes when you're travelling, a business will ask if you'd like to pay in Australian dollars or the local currency. Choosing Australian dollars means the payment will be processed using Dynamic Currency Conversion (DCC), which could add an extra 2% to 10% onto the transaction cost.

How to avoid Dynamic Currency Conversion charges

Always choose to pay in the local currency. Even if you're using a debit card or credit card that charges a foreign transaction fee, it will usually end up cheaper than DCC.

12. Carrying traveller's cheques

Traveller's cheques are only accepted at a limited number of locations around the world, making it hard for you to actually spend them when you're overseas. Some places even charge a fee for accepting them. Beyond the issue of acceptance, they are bulky and can easily be lost or stolen.

How to avoid issues with traveller's cheques

The main appeal with traveller's cheques is that they offer insurance against theft and loss. These days, you can get a higher level of security with a travel money card, debit card or credit card, which all offer zero liability against unauthorised transactions as well as fraud-monitoring services. Cards are also easier to carry around and more widely-accepted. So using a combination of cards and some foreign currency means you'll be able to spend wherever you want, without the hassle of having to cash in a bulky traveller's cheque.

Whether you're about to head off on your first overseas adventure or you're a seasoned traveller, it's easy to make mistakes. So do your research, compare a range of options based on where you're going and enjoy the journey.

Compare travel cards, credit cards and debit cards

Updated February 27th, 2020
Name Product Available Currencies ATM Withdrawal Fee Initial Load Fee Reload fee
Travelex Money Card

Overseas: $0

Domestic: 2.95% of the amount withdrawn

1.1% of initial load value or $15, whichever is greater
1.1% of transaction value or $15, whichever is greater
Lock in exchange rates for up to 10 currencies, pay no overseas ATM fees and get exclusive merchant offers.
7-Eleven Just Go Pre-Paid Travel Card
EUR €0, GBP £0, AUD $0, USD $0, NZD $0

Compare up to 4 providers

Updated February 27th, 2020
Name Product Foreign Currency Conversion Fee Overseas ATM Withdrawal Fee Purchase rate (p.a.) Annual fee
Latitude 28° Global Platinum Mastercard

0% of transaction value
21.99% p.a.
$0 p.a.
Save with 0% foreign transaction fees on purchases. Plus, complimentary flight delay passes and a global wifi access.
Bankwest Breeze Platinum Mastercard

0% of transaction value
12.99% p.a.
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
Get 0% interest on balance transfers for 26 months (with a 2% fee), complimentary travel insurance and no foreign transaction fees.
ANZ Rewards Travel Adventures card

0% of transaction value
20.24% p.a.
$225 p.a.
Receive 75,000 bonus Velocity Points, a complimentary flight and 2 Virgin lounge passes per year. Plus, 0% foreign transaction fees.
Bankwest Zero Platinum Mastercard

0% of transaction value
17.99% p.a.
$0 p.a.
Offers a $0 annual fee, 0% foreign transaction fees, complimentary international travel insurance and a balance transfer offer.
Westpac Lite Card

0% of transaction value
9.9% p.a.
$108 p.a.
Keep credit card costs low with a maximum credit limit of $4,000, a 9.9% p.a. purchase interest rate and no foreign transaction fees.

Compare up to 4 providers

Rates last updated February 27th, 2020
Name Product Product Description Debit Card Access ATM Withdrawal Fee Monthly Account Fee Overseas ATM Withdrawal Fee Overseas Eftpos Fee
ING Orange Everyday Account
Receive a rebate on any international transaction fees and international ATM fees when you deposit at least $1,000 a month and make at least 5 card purchases.
Westpac Choice
Take advantage of Westpac's Global Alliance and save on overseas ATM fees at over 50,000 locations worldwide with fee-free cash withdrawals.
Citi Global Currency Account
Hold up to 10 currencies.
$0 monthly account fee.
Enjoy one linked debit card to hold up to 10 currencies and receive foreign currencies for free. Earn up to 1.50% p.a. interest on your AUD balance.

Compare up to 4 providers

Pictures: Shutterstock

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