Should I change my money now?

Pauline is heading to Europe in a few months’ time and is slightly alarmed by the falling dollar. Should she change her money now before it gets any lower?

Q. Pauline
I’m heading to Europe in May, a trip which I have been planning for a while. I was hoping that the Australian dollar would remain strong, but the drop in rate is concerning me. Should I buy my currency now to get the most for my dollar?

A. Trying to predict currency markets is notoriously difficult and this is why people make and lose so much money trading in currency. That said, it’s worth noting that trading usually involves vast sums of money, considerably more than the average traveller will be spending.

The Australian dollar has already dropped quite a bit against the pound and the euro and, without promising anything, is unlikely to fall too much further. Nor will it rise greatly. So, in essence, the chance to lock in a more attractive conversion rate may already have passed. However, if you have the money sitting in the bank attracting very little interest, it may be worthwhile to convert now and lock in a rate which may be better than the interest earned.

It is probably more important to consider how you will access your money while travelling. Travel cash cards are incredibly popular but it’s best to shop around, as the fees to access your cash can vary considerably. It can also take a couple of days for the money to be available following a reload of your card and if you have limited internet access while travelling, reloading may be difficult. It is wise not to have all your travel funds loaded onto the card before you go, as if you lose it or have it stolen, you will have no access to your cash until alternative arrangements can be made.

Banks also charge a considerable amount for accessing funds while overseas, whether spending on a credit card or withdrawing money from an ATM. It’s worth asking your bank for a breakdown of fees and whether there is a less expensive way to access your money while travelling.

Remember, no matter how you choose to access your funds, make two copies of the front and back of your card, along with contact numbers, should you need to report a problem. Keep a copy separate from your cards while travelling and leave a copy at home with someone you trust and can easily contact if needed.

Have fun!

Written by Debbie McTaggart