Travel money buying guide

Keep currency costs to a minimum on your next overseas trip.
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01.Travel money options

Currency exchange sign

Good news for those who have been bitten by the travel bug: the $A goes from strength to strength and overseas currency has become a lot cheaper especially if you plan to head for the US. 

But beware of other costs in the form of exchange rate margins and commissions, if you wait until you get to the airport before buying foreign cash, that’s exactly what you’ll get.

CHOICE recommends you take a mix of cash and cards to cover expenses and provide a back-up plan. We tell you which companies provide the best products and rates.

Please note: this information was current as of April 2009 but is still a useful guide to today's market. For more recent information, see our Travel money cards 2012.


Paying with plastic may not be an option in some places. Make sure you have enough cash to pay for a few days’ expenses, and a taxi, meal and hotel room when you arrive. Banks usually give competitive exchange rates and fees, but shop around various banks and other providers as you might save a few dollars. At a bank, if you buy $1000 worth of foreign notes you’d generally pay about $25 in fees and commissions, roughly 2.5% above market exchange rates on the day. Some institutions give existing customers a fee discount.

Place your currency order about a week before your trip (allow longer for exotic currencies) as some institutions may not have the currency you need in stock. Be aware that if an institution needs to order the currency, rate changes can occur between the time you order and receive your cash.

So if you wait until you get to the airport, what can you expect to pay? Fees and exchange rate profit margins at the airport are up to 8%, so buying $1000 of foreign notes could cost you $80 in fees and margins. Some airport providers give better rates if you order in advance – Travelex offers an exchange rate similar to banks’ if you order online at least two days in advance. However, if you wait until you arrive at the airport, and use your credit card to buy the currency from Travelex there, you’ll pay much more.

Travellers’ cheques

They probably seem a little outdated now, given most of us have credit and debit cards. However, some people like to carry travellers’ cheques as a back up, since unlike cash, they can be replaced by the provider if lost or stolen. If you don’t use them, some foreign exchange providers will refund the cheques at no extra cost. Be sure to keep a record of the travellers' cheque serial numbers (in a separate place to the cheques) so you're protected in the event of loss or theft.

Check the fees and commissions that apply. Depending on where you buy travellers’ cheques, they may cost more than cash due to the insurance element that’s built in. Check if a second set of fees will apply when you go to cash the cheques in overseas banks and exchanges. Also check out where you'll be able to echange the cheques.

Dynamic currency conversion (DCC)

Not really as exciting as it sounds, DCC just means a hotel or shop in London or Lisbon offers to charge your card in Australian dollars, rather than sterling or euros. The potential problems are twofold. First, the exchange rate offered by the foreign hotel or shop probably includes a profit margin for them. The exchange rate is unlikely to be as competitive as the rate your bank or credit card provider would apply to the transaction. Secondly, if you’re using plastic, you may be charged a second fee by your credit card company, as some charge for cross-border purchases, even those in Australian dollars. We suggest you pay in the foreign currency instead and let MasterCard or Visa apply their more competitive exchange rates.

Safe travel tips

  • Buy travel insurance Check out our Travel insurance guide
  • Take a mix of paying options, including cash and cards.
  • Don’t keep all your money in one place.
  • Ask your financial institution how best to access your money. Will you need a credit card PIN?
  • Find out what’s accepted, especially in remote destinations – pack some US dollars as a contingency. Check out Smart Traveller.


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