15 Travel money pro tips for your next holiday
You could get around pretty much all of the United States with nothing but a travel card in hand, but that same card would do very little for you in Morocco. It really depends where you’re headed, but understanding some general principles will go a long way in helping you pack your travel wallet well. These are our top tips for helping you manage travel money like a pro.
Money talks - Know which currencies you'll be using.
Research is key to planning your travel money strategy. Knowing the country’s terrain and its inhabitants is crucial when deciding which travel money options to use. For instance, if you were going to Europe, taking a travel credit card with no international transaction fees or foreign ATM withdrawal fees would be a smart move. In contrast, if you were headed for Cambodia and Laos, you’d want to be sure to have plenty of local currency on you, and maybe small denominations of US dollars just in case. Search our country-specific travel money guides for more information.
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After researching the local currency and travel money tips, you may find that it becomes obvious which travel money option you should take. However don’t settle for just the one! Pick a combination of at least of your two best options. The reason for this is simple but wise: always pack a back-up so you won’t get stranded while on holiday. Should you lose your wallet with the travel card in it, you will still have your credit card and some cash stashed away in your luggage to tide you over until you receive your replacement card. Always leave your spare credit card in the hotel safe, and never keep all your travel money together in one place.
Plus, certain products work better for different situations. While a prepaid card might be good for day-to-day transactions, a credit card might be a good option for larger or emergency purchases.
Tip: Open up an account with an international bank. Some are Citibank or HSBC so that you can gain access without fees in some countries and it might just save you should something happen.
Prepare cash beforehand.
If cash features as an option in your ideal travel money combination, it would be smart to get some local currency before you go. The reason for this is also precautionary. Even though you’re planning to get cash out at the ATM upon arrival, and you already know better than to do your currency exchange at any airport, the last thing you want is to find yourself stuck in a foreign place with no money for transport because the ATM machine is busted. That said, we recommend always having a little local currency in cash no matter what your preferred travel money choice—so you can get a drink from the vendor or tip your taxi driver if you wanted.
Choose machine, not man.
The ATM machine is your friend. Forget airport exchange desks and dodgy local money changers—those people often charge costly transactional fees and high commissions, because that’s how they make their money after all. The ATM gives you an interbank exchange rate, which is typically the most competitive foreign exchange rate you could get. Watch out though for currency conversion fees, international ATM withdrawal fees and possible charges by the local ATM operators.
Unlike debit and ATM cards where you’re withdrawing from your savings, credit card ATM withdrawals can quickly become very costly with high cash advance fees and interest rates that begin accruing from the time of your cash withdrawal. So, leave cash withdrawals to your debit or prepaid card.
Make big withdrawals.
Having said all that (about currency conversion fees, international ATM withdrawal fees, cash advance fees and high interest rates), it would be prudent to make singular large withdrawals from the ATM using your debit or ATM card once you get to your destination. This is only recommended if your destination country is not a plastic-friendly place where you could just use a travel card as you go. Also, if safety is a concern and you shudder at the thought of carrying obscene amounts of cash in your pockets, try leaving some in a secure place in your hotel or luggage and using a money belt or some other anti-theft travel accessory.
Say no to dynamic currency conversion.
Always trade in the local currency. This means that when you’re asked at the counter if you’d like to pay in Australian dollars, the answer should be “no, thank you.” This is because the retailer always gives you a less than favourable exchange rate compared to your credit card company’s inter-bank exchange rate. On top of that, the retailer also charges a currency conversion fee of at least 3%. This is in addition to the usual overseas transaction fees that your card company will still charge you for that transaction. Learn more about dynamic currency conversion here.
Say no to foreign transaction fees.
Where possible, avoid foreign transaction fees or currency conversion fees. This is a 2-5% fee that applies to every single transaction that you make in the foreign country, which could add up to a very expensive holiday. Seek out travel-friendly credit cards and debit cards, where those fees are waived. If possible, have a card that you use just on trips, and remember to pay that off as soon as you get home to avoid paying additional interest costs.
Emergency contact details.
This one is easy, and necessary. If you’re planning on using your credit or debit card abroad, calling the company before you go will save you possible inconvenience and embarrassment. Card companies are so vigilant these days that you could find your account instantly frozen after one transaction in the foreign country. It might only take one call to reactivate your card, but it’s much cheaper and less stressful to make the call in Australia before you leave.
While you’re calling to inform them about your upcoming trip, also find out what international transaction fees and international ATM withdrawal fees apply to your card. If you’re using your everyday card, you might want to enquire about getting a travel-friendly card without any of those fees.
Bank international phone number: Save this number to your cell phone, you will need it, especially with money travel cards.
Check your balances.
This is a very good habit to pick up. Checking your balances as you go helps you stay privy to any fraudulent activity that might show up on your statements. Be sure to call your card company and report any suspicious activity the moment you see it.
Keeping track of your balance is also a good way to stay on top of your travel budget. If you’re using a travel card, not only will you know when to reign it in, but you’ll also know if you need to top up your balance. Reloading (via BPAY or an online or phone transfer) can take up to 2-3 business days to process, so you don’t want to run out of cash before your funds appear in your account.
Know your travel card.
Knowing your travel card and its terms and conditions is important to becoming a savvy travel card user. One of the common mistakes that travel card newbies make is using a travel card that doesn’t support their destination’s local currency. While a travel card may offer the security of not being linked to your home account and other perks such as easy replacement and the ability to lock in an exchange rate, using a travel card that doesn’t support the currency you’re spending in is not the best option. Each transaction will still incur a currency conversion fee and be subject to prevailing exchange rates. If your card doesn’t support the currency, consider using a travel-friendly credit or debit card with no or low currency conversion fees.
Forget about travellers cheques.
These might have been popular in the last century but a new millennium has since dawned and travellers cheques are now more of a hassle than a help. They are costly, a bit of a pain to acquire, and not widely accepted. You may find yourself hunting for places that will accept them, and paying a fair bit in commission fees just to use them. Travel cards are the new way to go.
Spend all your cash.
Unless you plan to be revisiting soon, it’s a better idea to spend all your leftover foreign cash than to keep it. It makes little sense to have foreign currency lying around unused in your travel wallet. The smarter thing to do would be to spend it all while you’re there. Settle your hotel bill in part with your remaining cash, or get some souvenirs for your mates at the airport. Have a blast at the duty free shops or give it away to charity.
If you can’t think of a way to spend your leftover cash, transfer it back to Australian dollars and nominate to transfer it to your existing account. If you don’t have plans to use the card, close it to avoid paying the maintenance fees. Learn what else you can do with remaining funds on your card.
Finally, enjoy yourself. All your hard work and money smarts won’t mean much if you’re not having fun.
Eating like a local is key to experiencing the true culture of a destination whilst not breaking the bank. To find the best prices on meals or shopping for food, check out YELP or Eatability. There is nothing worse than finding a great restaurant at the last minute and finding out it's way overpriced.
Make sure you contact your cell phone company to inform them that you plan to travel abroad. They can set up your phone so you don't incur huge international roaming fees, as well as web fees. It's a little pricey, but worth the cost in the long run.
- Watch for them, they are the people out there trying to steal your identity – they've gone as far as putting little webcams at the ATM's focused on the keys so that they can gain your PIN and card number.
- Cover keys when entering information, and don't use the ATM if you see someone close by, or notice anything unusual.