Discover how far your travel money can take you.
Where are you travelling to?
Prepaid travel cards, credit cards, debit cards and cash all have their uses, but the differences lie in their features and fees. So it’s often convenient to take a combination of travel money options with you or at least to have a back-up option on hand. 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.
Travel debit cards
If you have a Visa or Mastercard debit card that’s linked to an everyday account, you could continue to use it when you’re travelling overseas. This gives you a way to spend your own money without transferring or converting it beforehand. Some everyday debit cards offer travel benefits such as international ATM alliances to help you avoid overseas withdrawal fees or 0% currency conversion fees.
Compare travel debit cards
What are the benefits of travelling with a debit card?
- Pay with your own money. 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 transaction or savings account when you’re in another country. This can save you time compared to loading money on a prepaid card and can help you avoid cash advance or interest charges that could apply on a credit card.
- ATM availability worldwide. If your debit card is a Visa or Mastercard, you should be able to withdraw money from ATMs around the world. To avoid ATM withdrawal fees, look for a card with a global ATM network, such as Westpac’s Global ATM Alliance or Citi’s international ATM network.
- Card fraud protection. Australian debit cards offer security features such as fraud-monitoring services and zero-liability policies that can help you get your money back if your card is used for fraud.
What do I need to know when I travel with my debit card?
- Foreign transaction fees. Unless your debit card offers 0% international transaction fees, you could be charged between 1% and 4% for all payments made in a foreign currency.
- Dynamic currency conversion. Similar to credit cards, you may have the option of paying in the local currency or in Australian dollars when you use your debit card overseas. Choosing Australian dollars means the transaction will be processed using dynamic currency conversion, which usually adds between 6% and 8% to the transaction cost.
- No back-up or additional card. Unlike some travel money cards, debit card accounts do not provide a backup. This means that you may have to wait up to two weeks for a replacement if you’ve lost your card or had it stolen overseas.
- 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 a rate with a prepaid travel card before you leave the country. You can get an idea of how the Mastercard and Visa exchange rates compare here.
CASE STUDY: Do your homework first
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 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 since they come with a backup. To his girlfriend's delight, the back-up 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.
Travel debit cards draw funds from a savings account and enable you to access your funds while overseas and to 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.
While cards are convenient and secure, it’s a good idea to have some foreign cash on hand when you go overseas. This allows you to make payments when cards are not accepted, such as at smaller cafes, stores or even public transport ticket machines. It also means you’ll have some funds available even if something happens to your card. You can buy foreign currency in Australia from specific outlets or order it online. You can also buy it when you’re overseas, although this could be more expensive.
Compare foreign cash services
Benefits of having foreign cash
- Acceptance. As long as you have enough money, you can use foreign cash anywhere. In comparison, there could be some locations where cards are not accepted.
- Convenience for smaller payments. Some businesses might have a minimum transaction amount for cards, which could make it easier to use cash. Similarly, if you’re travelling to a country where tipping is required, such as the US or the UK, having cash could make it easier to leave a tip that’s affordable for you.
- Lock in exchange rates. If you buy currency before you go overseas, you’ll be able to get it at the exchange rate offered for that day. This means you’ll know exactly how much you have to spend when you’re away.
- Easy ordering services. If you order your currency online, you could have the choice of getting it delivered or picking it up at a nearby store. This could save you time and money when compared to last-minute foreign currency purchases you make at the airport.
Other factors to consider when getting foreign cash
- Exchange rates. The exchange rates for buying currency can vary a lot depending on the company and where you are. So planning ahead will help you find a service that offers a competitive exchange rate for whatever currency you want to buy.
- Currency conversion costs. Many foreign currency exchange services will charge a fee or commission for each transaction. You could also be charged a fee for delivery. Make sure you factor this cost in before you order money so you can budget accordingly.
- Processing times. If you want foreign cash before you go overseas, keep in mind that some services may need to order the money for you. This could take a couple of weeks, so give yourself plenty of time between ordering money and going away.
- Security. Remember that cash is easy to lose and tricky to insure. Aim to keep your money on you or locked up in a secure section of your luggage that would be hard for thieves to access. Also check your travel insurance policy to see how much you could be covered for if you lose your cash.
What other travel money options can I consider?
Traveller's cheques were once a widely used form of travel money, but they’re going the way of the dinosaur. You can weigh up whether they’re worth your time below:
Benefits of traveller's cheques
- Secure. Traveller's cheques are an extremely secure method to spend money overseas, requiring an ID check before they can be used.
- Safe. Traveller's cheques are insurable and can be replaced if lost or stolen.
What else should I consider when looking at traveller's cheques?
- Cost. You might be charged a purchase fee when you first pick up your traveller's cheque.
- Acceptance. Traveller's cheques are not widely accepted, especially compared to Visa or Mastercard credit, debit and travel money cards.
- Ease of use. Traveller's cheques can be bulky and awkward to store in your wallet or luggage. Plus, you’ll have to go to the effort of getting them cashed rather than having immediate access to money like you would with a card or foreign cash.
Credit cards with complimentary travel insurance
A range of credit cards come with complimentary travel insurance that can help you save on buying cover upfront. Usually, you’ll need to activate the cover or pay for some or all of your trip with the card to get this insurance. If you think you’ll use this card when you’re overseas, remember to also look at the other features of the card – including foreign transaction fees and interest rates.
Frequent flyer credit cards
As well as earning you points for your everyday spending, many frequent flyer credit cards offer travel perks such as airport lounge passes, travel insurance and concierge services. If you get a new frequent flyer card, you could also earn thousands of bonus points to help pay for your next trip. There are also some top-tier frequent flyer cards that offer flight or travel vouchers you can put towards the cost of your next trip. As with other credit cards, remember to check the rates and fees, so you know how much it will cost to use the card in Australia and overseas.