Be smart with your travel money

Older Australians aren’t missing any tricks when it comes to maximising their travel budget, according to OzForex’s latest data. Retirees are the top users of pre-paid travel money cards – in fact 43% of all our cardholders are over 50.Despite this, many Australians are still getting scammed and stung when they travel, whether from hidden fees or poor currency rates. Here’s how to be smart with your travel money the next time you go overseas:

Rates sting

Foreign exchange rates can vary widely and you can really get stung if you leave it to the last minute. Airport exchange bureaus tend to offer the worst value, as they know you’ve got nowhere left to go. Banks can also be expensive, particularly if they charge a fee on small transfer amounts. According to Choice, you’ll get the best rates changing your money with a specialist provider.

Sneaky fees

You probably do basic calculations in your head when making purchases overseas, perhaps “rounding up” or “rounding down” for a basic dollar conversion. Unless you’re aware of all the different fees and margins you could be hit with along the way and end up greatly overspending. Don’t forget there are also various charges from using your credit card on top of being hit with your conversion.

Tight purse-strings

Thieves and pickpockets abound in popular tourist designations. Always be aware of where your money is and consider wearing a travel belt close to your body. Keep a separate list of numbers for banks etc, so you can cancel a card immediately should your card go missing. Don’t keep everything in one place or one pocket: consider leaving a card and some cash in the hotel safe.

Plastic fantastic

While you’ll want to take some cash with you, for tips and smaller purchases, bank cards can be a safer money option as you can cancel them in the event of theft or loss, however with cash, once lost it’s gone for good! Pre-paid travel cards can be a smarter way to take money with you as you can pre “lock in” rates at a favourable exchange, and they tend to have cheaper fees and conversion charges than credit and debit cards. Most providers will generally issue you with multiple cards that also hold multiple currencies on each of them, which is great if you’re travelling to several different countries. Some travel cards allow you to load up money online  making it more convenient than contacting them directly from overseas.

Crystal ball

It’s impossible to predict exactly where the Australian dollar may go, but many economists have been tipping it to fall against currencies such as the US dollar in the coming months. So if you’re planning to travel later this year, it may be worthwhile taking advantage of the strong dollar now and buying some foreign currency ahead of time. You can always hedge your bets and get half now, half later.

Pre-paid travel money cards are enjoying a huge surge in popularity so it’s worth seeing if they could be right for you. MasterCard has predicted Australia’s prepaid consumer travel card market will reach $2.9 billion by 2017.

Thank you to Natalie Truong from OzForex for contributing this article. 

What are your travel money tips? Do you use a travel card, cheque or cash when you’re overseas?