Travel SOS: choosing the right currency when travelling

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Emelda is heading off to the UK and Europe, where she’ll visit a few countries that use different currency. She’s asked SJ about the best way to buy currency.

Q. Emelda
I’m visiting some family and friends in Europe and the UK next year, and I’ll need some different types of currency. I’ve only ever been to the US, and needed just one different currency. Can you give me some general tips about buying currency?

A. Despite having travelled more than most people I often find myself still confused when it comes to how best to manage foreign currency. When should you transfer money? Should you withdraw it beforehand? Is it best to pay in your home currency or the local one when given the option?

The easiest answer here is that it pays to do your research. At least a month out from your trip, start watching currency movements. The ideal time to buy is when the rate is climbing and the AUD is the strongest – when you get the most euros, dollars, pounds or other currency for your dollar.

currency board

While it can be hard to predict this, watching the daily exchange rates on a money converter site such as Xe will help you understand what makes a good exchange rate. There are also forecasting sites that can help to help you judge whether the value of the AUD is likely to rise or fall before you travel.

As with everything, buying currency in advance can be a bit of a gamble. You may find that the day after you buy it, the rate continues to climb. One thing is for sure though, it is much better to be prepared and have bought at least some foreign currency in advance. You will need foreign currency when you arrive at your destination and, unlike in your home city where you have the ability to shop around, airports rarely offer good exchange rates as they know they have a monopoly and customers are usually desperate.

Make sure you also check among the various providers as, like with most industries, prices are not the same across the board. Phone around and ask for rates so you can guarantee getting the best exchange rate and paying the lowest amount of commission.

It’s worth being aware that exchange rates are not set in stone, either. If you are exchanging a large amount of cash, there’s no harm in asking for a discount – the worst that will happen is they will say no and you’ll be in the same position you started in. The same applies when you’ve seen a better rate elsewhere – most providers will offer to match this in order to still get your business.

Avoid travelling with huge wads of cash by making the most of travel money cards. Make sure you shop around for these as well, though, and choose one with low or no foreign transaction fees. Pre-paid cards have the added bonus of travel money being locked at the exchange rate on the day you transfer money to the card. So again, be aware of this and make sure you transfer it across at a good rate so you don’t lose out.

And, when it comes to the million dollar question of whether you want to pay in AUD or foreign currency, the safest option is to pay in the local currency. This will avoid what is known as ‘dynamic currency conversion rate’ where businesses apply a fee to convert your purchase into AUD. Same goes for ATMs – unless you are certain the conversion rate they are offering is much worse than what your bank is currently showing – you would do better to accept the exchange rate displayed and lock this in. Your bank may not process or convert the transaction at that exact moment, meaning you may end up with a worse conversion than if you’d accepted and locked in the one offered.

Do you have any practical tips when it comes to managing money overseas?

If you have a Travel SOS question, simply email [email protected] and we’ll do our best to answer!

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Written by SJ


Total Comments: 11
  1. 0

    There are two good ways of maximising your money: if you know someone trustworthy at your destination you can transfer funds into their account. I use, they have low fees and excellent exchange rates. I always carry some currency of the country I am landing in, enough to get me from the airport to hotel. When travelling to Europe I buy currency money in Singapore or HK, cheaper than changing direct in Europe. I prefer cash to cards, find it easier to manage, and credit card for larger purchases if the fees are not excessive. My coles card has no foreign transaction fees, which saves me lots each year. Great for frequent travellers.

  2. 0

    If there’s a Crown Currency kiosk in a shopping mall near you, they offer best rates ever also discount for Seniors.Used them many times.Travel agencies also display rates and you can get cash cards there , if getting low when away you can reload via Internet banking. Travel cards are the best in my opinion you only use what’s needed so not much balance left to exchange into cash on your return.
    yes load some money onto them HOWEVER always make sure you withdraw at ATM
    When bank is open incase there’s a problem, France Italy Spain When using credit card no fees.Dont stress over this it can be confusing choose to exchange relax and start to enjoy the preparation of yr trip.

    • 0

      Citibank do not charge any fees if withdraw Local or overseas you can select a retire account with no fees and all good.
      Everytime I am overseas I use my citibank debit card on ATM’s and the only small charge is from the local banks…..

      I agree with policeman …use ATM’s he is correct. Just deposit into your AU account and only take minimum cash also ensure you have another account with another bank and internet access on both banks just in case your main ATM gets lost or stolen and you have to reported then you have no way to get money.

      I have a secondary account with another bank and a debit card always keep on the hotel safe just in case so all I have to do is transfer from the main bank account to my secondary and then I am back in business.

      Another alternative is the Cash cards as Policeman indicated but ensure the card is a VISA or MASTERCARD because some others may not be accepted in overseas ATM’s and get a secondary account with internet access just in case

      Thanks Policeman good advice

  3. 0

    If you have a credit or debit card that has a chip in it, you should keep it in an aluminium foil envelope or wrap it in foil.
    Chip information can read by electronic readers that are near to you even if they are in your wallet or purse. They are called RFID cards – RF stands for Radio Frequency.
    Think of them like a tiny broadcaster sending your bank data out to a receiver. Card readers are receivers that store the broadcast from your card.
    You can shop for dedicated RFID pouches on – they are inexpensive.
    Having a debit card used solely for any online or holiday transaction made outside of Australia is smart because theft from your account is limited to what’s on your card or in the account it’s linked to.

  4. 0

    I have found that travel cards are expensive. I simply use two credit cards, one to withdraw cash from ATMs (generally on arrival at the airport), and the other for purchases. Never had any problems and when compared with friends with travel cards been more economical.

    • 0

      Tom, I have tried all the approaches and now carry prepaid currency cards. When paying in $AUS on a bank card when overseas the merchant will convert to local currency (loss 1) then charge a conversion fee (loss 2) and when returning home your own bank will charge a foreign transaction fee (loss 3). So always pay in local currency. That way your own bank will charge the exchange rate and FX fee (about 3% but only 2 losses). If I purchase the local currency or loaded cards at a time when exchange rates are favourable, I think I come out in front. Guess we stick to what we feel comfortable with.

  5. 0

    Most people eechanging currency seem to charge in excess for the service provided either through fees or poor exchange rates or both. I’m yet to find a card that offers what I’d consider good valuu for the service provided … I think they’re all sharks!



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