Making the most of your US dollar


Your guide to banking and money management when travelling in the USA.

Get the best out of your dollar


When you're booking a trip to the US, planning ahead to find the best ways to take your money with you can mean more money in your pocket for the important things.

For information about hiring a car, tips for getting around the USA and the best sites for booking accommodation – download our USA travel guide.

Best ways to take money with you

The currency used in the United States of America is the US dollar ($). Check xe.com for the latest exchange rates.

You have three major choices for taking your money with you: cash, credit/debit card or travel money card. While traveller's cheques still exist, it's not as easy to find a bank that offers them or places that accept them on the other end as it used to be. 

Cash

It's always a good idea to have some cash on hand while you're travelling – cards won't necessarily be accepted everywhere you go. But you should also know that while back in the day, cash was king anywhere you went, some retailers and cafes in the US no longer accept it, so have a backup when you're out and about.

Buying US dollars at the bank

You can buy US dollars at banks around Australia. Not all banks will give you the same exchange rates and fees, so shop around if you can.

Some banks allow you to withdraw US dollars from selected Australian ATMs using your local debit or credit cards.

Cost: 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. You'll need to call ahead to check whether your local branch has US dollars available.

Buying US dollars at the airport

If you choose to exchange your cash at the airport, you're likely to pay more in fees and get a worse exchange rate. Fees and exchange rate profit margins at the airport are up to eight percent 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.

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.

Traveller's cheques

Some people like to carry traveller's cheques as a backup because providers generally replace them if you lose them. If you don't end up using all the cheques, some providers will refund them without additional cost. Be sure to keep a record of the serial numbers (in a separate place to the cheques) so you're protected in the event of loss or theft.

Cost: Depending on where you buy them, traveller's cheques may cost more than the equivalent cash because of the added insurance. Fees may apply for cashing the cheques in the US.

Dynamic Currency Conversion (DCC)

DCC is when retailers in the US offer to charge your Australian card in Aussie dollars instead of US. 

Cost: While dynamic currency conversion may seem convenient, it can end up being a pricey exercise. Firstly, the exchange rate offered by the foreign hotel or shop is likely to be worse than the rate offered by your bank. Secondly, your credit or debit provider at home may charge you a second fee for cross-border purchases – even if you opt to pay in Australian dollars.

Prepaid travel money cards

Major banks and money exchange companies like Travelex offer prepaid travel money cards. Before leaving, you load up the card account with US dollars and you can use it for purchases and cash withdrawals in the States, as you would a debit or credit card. The advantage is you "lock in" your exchange rate in US dollars when you load money onto the card, meaning you're not at the whim of currency fluctuations. And these cards can be replaced if they're lost or stolen. 

Cost: Travel money cards can end up costing you more than if you used your regular credit or debit card, because of a poor exchange rate margin and a large array of hidden fees. Some fees that may not be immediately obvious are 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, a fee to load the card, ATM withdrawal fees, an exchange rate conversion fee when you use the card and further fees if you reload or close the account.

Credit and debit cards

Credit cards are accepted almost everywhere for purchases and cash withdrawals. Most debit cards can also be used overseas.

Cost: Credit and debit cards charge a currency conversion fee. Try to avoid using your credit card for cash withdrawals as you will get charged a cash advance fee plus interest. Some companies don't charge interest if you pre-load enough money to your account, so check with your card provider. Debit cards will not incur a cash advance fee as you're withdrawing your own money.

Visas, vaccinations, phone roaming, SIM cards, internet, power adapters, money, travel insurance, handy apps and more. The USA travel guide: what you need to do.

How to access your money

ATMs

ATMs are readily available in towns and cities. Remember that you'll be charged a foreign exchange fee and a withdrawal fee for every transaction, and a cash advance fee if you're using a credit card.

Credit cards

Credit cards are widely accepted, but remember most will charge a conversion fee of two to three percent every time you make an overseas purchase.

Tip: Westpac customers can avoid withdrawal fees by using Bank of America ATMs.

Currency converters

You can change Australian dollars to US dollars at some US banks and currency exchange outlets. These will be dotted around tourist areas and at airports. Avoid changing money at the airport – it's unlikely you'll get the best rate.

Traveller's cheques 

Some US banks and retailers will still cash them. American Express has a redemption location finder. 

Taxes

Sales tax varies from state to state, and often won't be included on the price tag in stores. You may be charged more than you expected for meals, clothing, electronics, services and more. There's no sales tax on petrol (fuel taxes are included in the price) and generally none on supermarket foods. 

Some areas charge an additional local tax on alcohol, which may also come as a surprise when you get the bill. You can't claim a refund on sales tax when leaving the country – the way travellers to Australia can claim back GST – except in the case of certain purchases made in the state of Louisiana.

Tipping

Tipping is expected in the US. Remember that the minimum wage is far lower than in Australia and many workers rely on tips to make ends meet. 

As a general guide, tip restaurant staff 15-20%. Tip bartenders $1 per drink. Some restaurants automatically add 'gratuities' or 'service charges' to the bill, particularly in tourist areas or when serving large groups. In these cases it's up to you whether you want to add more to the tip. Tips aren't necessary at fast food restaurants.

Tip taxi drivers, hairdressers, massage and spa therapists and other servers 15-20%.

Porters should get $1-$3 per bag. Housekeeping staff should receive $2 to $5 per day and valets $2-5 per car.

US travel money checklist

  • Check xe.com for the latest exchange rates.
  • Check with your bank for the rate you'll be charged on your credit or debit cards.
  • Tell your bank about your travel plans two weeks before you leave. Card activity in a foreign country could be mistaken for fraud and you could find your account frozen.
  • Carry at least two credit/debit cards and split your money and cards between separate bags. That way if you lose one, you have a backup.
  • For more information, check CHOICE's travel money guide.


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