Travel SOS: a tip that will save you heaps of cash on holiday

Frank wants to know if he should convert to home currency when paying.

Travel SOS: a tip that will save you heaps of cash on holiday

Frank is about to head to Europe for the first time and he wants to know if it’s better to pay bills with local currency or have it converted so he knows how much he’s spending. In Travel SOS, Leon shares a tip that could save Frank a heap of cash on his holiday.


Q. Frank
I’m about to go to Europe for a four-week holiday and I’m only taking a credit card and just a little bit of cash for other costs. I just wondered, is it better to ask for conversions when I pay my bills or should I just pay in local currency and hope I have it covered? I only ask because I like to know how much in Australian dollars I am spending.

A. Good question – and the answer could save you heaps of money on your holiday. Whether paying for accommodation, restaurant bills or bar tabs, you’ll sometimes be asked if you want the bill converted to your home currency. It’s called a Dynamic Currency Conversion and it lets you know how much you’re spending in more familiar tender.

You may also notice an onscreen message asking if you want your account debited in your home currency when you withdraw money from a foreign ATM.

And while it’s nice to know how much you’re spending in your home currency, every time you do a currency conversion, you’ll pay a fee. So, it’s always better to pay in the local currency.

Also, on top of the one to three per cent conversion fee, the exchange rate being offered to you will most likely be unfavourable. And then consider the foreign transaction fees from your credit card company and you can watch your travel dollars dwindle before your eyes.

Even credit cards with no foreign transaction fees won’t prevent the fee incurred when you ask for the conversion.

So, it’s best to press ‘No’ on the conversion, or politely decline to whomever asks you if you’d like this ‘service’.

If you need to keep track of your travel costs, try using – it’s always up-to-date and, with the aid of a calculator on your phone, you should be able to keep a running tally easily enough.

Otherwise, you could try an app called Trail Wallet – it’s a goody for tracking travel costs.

Hope that helps.

If you have a Travel SOS question, email it to and we’ll do our best to answer it!



    To make a comment, please register or login
    2nd Dec 2017
    I was told years ago that visa gets the best conversion rates, I am not sure if that is still true, I always pay in local currency.
    2nd Dec 2017
    You don't need to worry about currency exchange and conversion fees if you use a prepaid Visa or Master Debit card. All of these cards have a AU$25,000 or overseas equivalent in a rolling 12 month period. This limit can be increased by the card issuer only on application.

    There are several available, but I would prefer to have mine attached to my Frequent Flyer membership card. Do your research before deciding on which one to use.

    There are three which have your name on them - Virgin Velocity, QANTAS & ANZ. These all have 10/11 currencies on them, but the ATM fees are slightly different between Virgin & Qantas, and more expensive with ANZ.

    Do a budget of what you expect to pay for your accommodation, fuel, food, spending, etc.

    Get into the practice of saving each week/fortnight/month, then transfer the funds onto the card around 6 months before you leave. Then do a one-off transfer to the currency you're going to be using. Eg GBP/Euro/USD, etc. This will be beneficial if you're going to be booking your accommodation using the hotel's website as they'll expect payment at the time of booking.

    Don't use any cards to pay for your airfare. Ask the airline if they have a fee-free way of paying for your fares. Most do, and are willing for you to pay them from your bank account to theirs. The other suggestion is to go into your travel agent and do an EFTPOS direct debit from your bank account (making sure that you've increased your daily limit for this transaction) rather than paying by credit card and attracting fees.

    All of these cards issue a statement and the transactions are available to be viewed on the card issuer's website with your log-in.

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