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They probably seem a little outdated now, given most of us have credit and debit cards.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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Prepaid and "cash passport" style cards

These cards are offered by banks including ANZ and HSBC, and by Travelex. Before leaving, you pay money into the card account and you use it for purchases and cash withdrawals as per a debit or credit card. For foreign currencies (not Australian dollars) you can "lock in" your exchange rate (including the exchange rate margin - see below) when you load money on to the card. These cards can be replaced if lost or stolen.

A major difference between prepaid cards and debit/credit cards is their fees. Some costs aren’t immediately apparent, such as margins built into the exchange rates applied to transactions. While you won’t pay an annual fee or interest, you may pay:

  • Exchange rate margins when you load and close the card: these are not specifically disclosed by the providers and vary from day to day.
  • Fees to load the card: up to 1.1%, or a flat fee of up to $15.
  • ATM withdrawal fees of up to $3.75.
  • An exchange rate conversion fee when you use the card: varies between providers. With Travelex the cost is from 5.95% to 8.45% when the withdrawal is in a currency other than what you loaded to the card.
  • If you reload or close the account, further fees apply (up to $10 to close the account).
  • As with all cards, make sure you read and understand the terms and conditions, including the fees. In some countries, for example, a tip will be automatically deducted (and later refunded) by the card provider when you use their card in bars and restaurants.

Credit cards

Credit cards are accepted almost everywhere for purchases and cash withdrawals. Using data from Canstar Cannex, we’ve covered hundreds of banks, building societies and credit unions, to calculate the average fees for overseas credit card purchases and cash advances so we can identify the best-value offers.

  • The median credit card charges a 2.95% currency conversion fee, plus a cash advance fee of $4 or 1.5% for withdrawals, whichever is higher.
  • The big five banks generally fall within this price range (see credit card table), while the most expensive providers charge up to 3.4% for currency conversions and a cash advance fee of up to $5.95 or 5%.
  • The table lists the only credit card with no currency conversion fee – GE Money’s Clear Advantage MasterCard absorbs the MasterCard charge so the exchange rate you get should be close to market wholesale rates. It also has no cash advance fee or annual fee. But, as with all providers, daily interest applies to cash advances until you pay your bill.
  • Some companies, including GE Money, don’t charge interest if you pre-load enough money to your account, so check with your card provider.  
Credit card fees for overseas transactions
Company Card Currency conversion ATM cash advance ($) ATM cash advance (%) Branch cash advance ($) Branch cash advance (%
Credit card with no currency conversion fee
GE Money Clear Advantage MasterCard 0.00% 0.00 0.00% 0.00 0.00%
Big five banks
ANZ First 3.00% 4.00 2.00% 4.00 2.00%
Commonwealth Bank Visa with Awards 2.95% 4.00 1.25% 4.00 1.25%
NAB Standard Visa Card 2.50% 4.00 1.50% 4.00 1.50%
St George Bank No Annual Fee Card - Visa 2.50% 1.25 1.50% 1.25 1.50%
Westpac Low Rate Visa Card 3.00% 2.50 2.00% 2.50 2.00%
Data for all card providers
Minimum 0.00% 0.00 0.00% 0.00 0.00%
Maximum 3.40% 5.95 5.00% 30.00 5.00%
Median 2.95% 4.00 1.50% 5.00 1.50%
Table notes

Source: and checked with financial institutions, updated April 2009.

ATM withdrawals and debit card purchases via EFTPOS may be charged as a flat fee or a percentage; this table shows the flat ($) fee as per standard practice. The currency conversion fee is additional and applies to all foreign transactions.

ATM and debit cards

Most banks, building societies and credit unions offer ATM cards that can be used for international purchases and cash withdrawals. Unlike credit cards, which offer interest-free days, the debit card transaction is deducted straight from your bank account and you won’t be charged interest for cash withdrawals unless you overdraw your account.

The big banks generally apply a currency conversion fee of 2%-3% to overseas debit card transactions – see the debit card table.
A further $4-$5 for ATM withdrawals usually applies, as well as possibly foreign ATM owners’ fees, so the fees for making lots of small withdrawals can really add up.
There are accounts with no fee though, such as with NAB Gold Banking – so check your bank, building society or credit union’s policy.

Debit card fees for overseas transactions
Big five banks Account Currency conversion ATM withdrawal ($) Purchase fee ($)
ANZ Everyday Visa Debit 3.00% 5.00 2.00
Commonwealth Bank Complete Access 2.00% 5.00 1.00
NAB Classic Banking 2.00% 4.00 0.00
St George Bank Complete Freedom 2.50% 5.00 0.00
Westpac Choice 3.00% 5.00 0.00
Data for all credit card providers
Minimum   0.00% 0.00 0.00
Maximum   3.65% 12.50 5.00
Median   2.00% 4.20 0.60

 Table notes
Source: and checked with the banks, updated April 2009.

ATM withdrawals and debit card purchases via EFTPOS may be charged as a flat fee or a percentage; this table shows the flat ($) fee as per standard practice. The currency conversion fee is additional and applies to all foreign transactions.

Is it really fee-free?

Since we originally published this article, a number of members have asked whether GE Money's Clear Advantage MasterCard really has no currency conversion margin or fees. A few asked whether a margin is hidden when transactions are first converted to US dollars and then to Australian dollars. Here's what the company told us:

"Any purchase made overseas is first changed into $US - by MasterCard at the current exchange rate. MasterCard then converts it to $A when they send it to the issuer (in this case GE Capital). However, it is not correct to think that the issuer (GE Money) makes any commission on this. In fact it is the opposite - MasterCard charges us (and every other issuer) the following two fees: a cross-border assessment fee; and a currency conversion fee.

"Normally these two fees are then on-charged from the issuer to the customer, but with the Clear Advantage card we absorb them. In addition to these two fees from MasterCard, normally the issuer also charges the customer an 'international transaction' fee. However, we do not charge Clear Advantage customers this fee.”

GE Money summarised by stating that “normally there are three fees on any international transaction - two charged by MasterCard, and one by the issuer. They normally equate to between two and four per cent. However, with the Clear Advantage card we absorb them all. It really is as simple as that."