Three things to avoid when changing money overseas

Poor exchange rates, rip-off fees and scams can cost you a lot when changing money overseas. Here’s how you can avoid them.

While it’s easy to organise travel money before your trip, there could also be times when you need to change money overseas. Maybe you’re somewhere that only takes cash, for example, or have simply run out of funds in the local currency.

Whatever the reason, you’ll usually be able to find a currency exchange service or get cash out from a foreign ATM. However, there are more risks to be wary of when you're abroad. So here’s a rundown of three of the most common pitfalls and ways you can deal with them to help you make the most of any money you change when you’re overseas.

1. High currency conversion fees

Currency conversion fees and exchange rates can quickly eat into your spending money. In some cases, these costs are even built into the exchange rate, making it harder to see exactly what you’re paying. Here are some tips on getting the most competitive rate at either an exchange bureau or an ATM:

  • Check what fees apply. If you’re at a money exchange bureau, ask if you’ll be charged any additional fees. If you’re at an ATM, it should let you know what fees are charged before you complete the transaction. It’s also important to consider whether or not your bank will tack on any further charges.
  • Compare rates between services. In airports and major cities, you’ll usually be able to find a few currency exchange services within walking distance of each other. The same goes for ATMs, which means you can compare the costs between them to figure out which one offers you the most affordable way to change your money over.
  • Choose local currency on your card. If you’re using a debit card or credit card, you may be asked if you want to use the local currency or Australian dollars. Always choose the local currency – otherwise you could end up paying Dynamic Currency Conversion fees worth up to 10% of your transaction.
  • Find a fee-free ATM or debit card. Some Australian banks have global ATM networks where you can get cash overseas without paying extra fees, such as the Westpac global ATM alliance. There are also travel money cards that offer fee-free ATM transactions, such as the Australia Post Multi-currency Cash Passport or Travelex Money Card. These options can help put more money in your pocket when you need extra cash overseas.

Tip: Avoid using a credit card to get cash overseas

While there are many travel credit cards that offer competitive features and $0 foreign fees, using one to get cash out or to pay for transactions at a currency exchange bureau is considered a cash advance transaction.

This means you’ll pay a fee worth around 3% of your transaction, as well as the cash advance interest rate – and that’s before any currency conversion takes place. So ideally, you should only use your credit card for regular card transactions when you take it overseas.

2. Changes in currency value

Exchange rates fluctuate daily, which means you could see a decent rate one day only to find it’s dropped the next day. A big change could mean you end up with even less in your pocket after it’s exchanged.

To avoid this scenario, try to plan ahead or check the exchange rates daily when you’re overseas. That way, if you need to change money at an exchange bureau, or get cash out with a card, you can make the most of a good exchange rate when you see it.

Everything you need to know about currency exchange

Currency fluctuations and card transactions

Changes in currency will also affect any payments you make with an Australian credit card or debit card. This is because the exchange rate that applies to these transactions varies daily, which can make it hard to know how much money you’ve spent.

So if you’re using an everyday debit or credit card when you’re overseas, you may want to check your account balance so you can see how much each payment or ATM withdrawal costs after currency conversion.

Locking in an exchange rate with a travel money card

Another way you can avoid or minimise changes in currency value when you’re overseas is to take a travel money card with you. These cards let you load and spend money in different currencies, giving you a way to lock-in an exchange rate before your trip.

3. ATM fraud and other currency scams

Foreign ATMs can look slightly different to the ones you use back home, which could make it harder for you to check for tampering. So if you want to change money into the overseas currency by withdrawing cash, try to find an ATM that’s indoors or in a bank – and always remember to cover the keypad when entering your PIN.

If you’re changing money elsewhere, the main risk is that you could be short-changed, especially if the currency is unfamiliar to you. A good way to avoid this from happening is to count out the cash after you have changed money over with an exchange service.

Even if you’re not changing money over, this is a good habit to get into when you’re making payments in cash. If you want to be really precise, speak out the amount you’re handing over and the change you’re given. That way there’s less chance of getting the wrong change during your trip.

What else do I need to know?


If you think you’ll be changing money overseas, keeping these factors in mind can help you make the most of your funds:

  • Organise your travel money before you leave. If you know you’ll be using foreign cash to pay for things on your trip, aim to get it before you leave. As well as giving you a clear idea of how much money you’ll have on hand, this can help you avoid higher fees, different exchange rates and scams when you’re overseas.
  • Withdraw larger cash amounts overseas. If you end up using overseas ATMs to get cash out, aim to withdraw a large amount at one time rather than smaller amounts more frequently. This will cut down on the fees you’ll have to pay and also reduce the risk of ATM fraud issues.
  • Change leftover foreign currency before you come home. If you end up with currency leftover at the end of your trip, you’ll usually get a more competitive rate by changing the money while you’re overseas. This is because you’ll be “buying” Australian dollars in the local currency, instead of in Australia where you’d be selling a currency that can’t be used for payments there.
  • Use a card for larger transactions. If you only have a limited amount of foreign cash, using a card to pay for larger transactions can help you make it last longer. In turn, that can help you avoid getting cash out at an overseas ATM or paying for more local currency at an exchange booth.

If you’re planning a trip soon, organising your travel money now can help you avoid these issues when you’re away. However, if it becomes necessary for you to change money while you’re overseas, these tips will help you make sure you get as much value from your money as possible.

Pictures: Shutterstock

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Amy Bradney-George

Amy is a senior writer at finder.com.au with more than 10 years experience covering credit cards, personal finance and various lifestyle topics. When she’s not sharing her knowledge on money matters, Amy spends her time as an actress.

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