How to take your money overseas
Whether you’re going on a seven-day cruise around the Mediterranean or a guided tour to Petra in the Jordanian desert, make sure you know how to access your cash. Being stuck in a foreign country with no way to get a hold of your money in your bank accounts can be scary, so save yourself the stress and get smart on your travel money options.
With more ATM machines sprouting up all over the world and shopkeepers and hotels accepting major credit cards, like Visa and Mastercard, travelling to far and distant places and accessing your cash has never been easier. Travellers’ cheques were one of the most common ways to get around the world with your cash a few years ago, but have now become largely redundant with the expansion of ATMs.
Having said that, they can be a great addition to a mix of options. It’s good to have a few different ways of accessing your money when you’re overseas. Whether its cash for incidentals when you arrive (like a taxi), debit card, credit card, travellers’ cheques or travel cards, there’s a number of options available to you.
Your options will depend on a few factors, such as your travel destination, the type of holiday you’re going for, the frequency of when you want cash and whether low exchange rates are a priority or not. It will be good to have a mix of different options to access your money, just to cover your bases. Here’s a few options to consider.
Cash
It’s always a good idea to carry cash with you in the currency of the country you’re travelling to. For example, if you’re heading to the US keep some greenbacks in your wallet for when you need to get a taxi from the airport to the hotel. Hot tip: As soon as you’ve booked your tickets, keep an eye on the exchange rate of the currency you’d like to buy. You’ll be able to get the best possible rate.
Popular currency exchange website xe.com has developed a smartphone app, which is available to download on Apple iPhones and Android mobile phones. If you have a smartphone, it may be worth getting this app or another similar currency exchange app before you go, so you can always keep a check on your overseas spending in Australian dollars.
Debit cards
The handy everyday banking card you use for withdrawing money out of ATMs here in Australia, can be used overseas too. The main drawback with using your everyday banking card overseas is the fees. Generally, it’s about $5 every time you withdraw money from an overseas ATM.
Some banks have partnerships or alliances with major banks in other countries, so you may escape the $5 transaction fee if you use with one of these partner ATMs. For example, if you have a Westpac banking card you can use a Barclays, Deutsche or Bank of America ATM, to name a few, and not have to pay a fee. Check with your bank before you go how much the fee is for withdrawing money at an overseas ATM and if they have any partner banks overseas.
The other thing you have to keep in mind is that some countries won’t have as many ATMs as you see in Australia. So if you’re going jungle trekking deep in South America or to a remote island in the Caribbean, it may be best to have cash on you as well as travellers’ cheques.
Credit cards
Credit cards can be a good option when you’re travelling overseas since they’re a convenient way to pay for hotels, transport or tours, and are widely accepted in most places. However, keep in mind that if you’re going to use your credit card to withdraw cash, you’ll be charged a cash advance fee and you’ll start accruing interest straight away. This is probably not ideal, especially if you want to keep fees and charges down when trying to access money overseas. One way you could get around paying cash advance interest is by putting money onto your card before your trip. If you’re trying to keep a check on spending while on holiday, using credit cards may make this more difficult. For example, if you purchase a tour on your credit card, you won’t know what currency exchange rate you’re going to get. This can make budgeting hard. If you have access to internet banking, use this to keep on top of your credit card spending. If not, limit the use of your credit card to keep fees and charges down or only use on a few big-ticket items, such as accommodation, transport and tours.
Travellers’ cheques
American Express travellers’ cheques are recognised around the world and were once the main way people brought money overseas. The main benefit of travellers’ cheques is added security. To cash a travellers’ cheque you need ID and if they get lost or stolen, they can be replaced in a few days.
They work like cash, so you can pay directly for goods and services at accepting retailers, restaurants and hotels. The drawback is they are becoming less common, so do your research before you go to see if the cheques are widely accepted in your travel destination. The other thing to check is fees. There’s usually a fee for purchasing and cashing travellers’ cheques, so make sure you know what these are before you start using them.
You can buy American Express travellers’ cheques from major banks and Australia Post. The cheques are available in a handful of the most common currencies, including US dollars, British pound, Euros, Japanese Yen and Canadian dollars.
Travel cards
Travel cards have become a popular option with holidaymakers. Simple to use, they work a bit like a bank card. Before your trip, you pre-load a card with the foreign currency (or currencies) you want and use it for purchases or ATM withdrawals overseas, much like your debit card. Travel cards are sold by most major banks. The great thing about travel cards is you can lock in the exchange rate for the currency you loaded onto it. So, if you secured US 86 cents for every AUD $1 back when the Aussie dollar was going strong against the US greenback, then you’d be jumping for joy. But, if you run out of the currency that you’ve loaded onto the card, you won’t be able to get the exchange rate you originally loaded the card with. The best thing to do is to keep track of your spending by checking your travel card balance online. If you need to, you can top up your card using BPAY. The other advantage of travel cards is security. It’s not linked to your regular bank accounts, and its chip and PIN protected. You can also get a spare card as a back-up.
Whether you’re going overseas for a week or a month, it’s important to plan for all scenarios when it comes to accessing your money. The last thing you want is to be stranded in a foreign country without any cash on you. Before you go, remember to call your bank to let them know that you’re going overseas and for the length of time. By preparing ahead of your trip, you’re ensuring you don't get caught with either no access to cash or paying exorbitant fees.
What's your favourite method for taking money overseas?
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No matter where you’re travelling to, making sure you know how to access your cash while away – and in the most affordable way – is very important. Easy to use and with countless benefits, the Over60 Cash Passport allows you to securely access your cash in the same way you use an ATM or credit card. To find out how you can apply for a card today, click here.
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