Five easy ways to exchange foreign currency

By Chris Chamberlin, May 19 2015

Exchanging money remains one of the necessary evils of international travel – even if you use your credit card for most purchases, you’ll often still need cash for smaller transactions such as taxi fares and payments for visas on arrival or airport taxes on departure in certain countries.

But there’s more than one way to get your hands on foreign currency, and by choosing one method over another, a frequent traveller could potentially save hundreds of dollars a year in fees. Here’s how it’s done.

1. Order online with Travelex, collect at the airport

Although we’ve found that Travelex’s airport kiosks in Australia generally offer poor value on currency exchange, they’re actually among the best if you pre-order your dosh via the Travelex website and pay via BPAY from your bank account.

That waives the normal commission charges and also locks in a more favourable exchange rate than you’d get as a walk-up customer, allowing you to collect your foreign cash at the airport but at a much better overall cost.

Qantas Frequent Flyer members can also earn points when placing that online order with Travelex, but must do so via the Qantas portal which adds a 1% commission charge in return for your points.

Orders with a total value of A$51-$299 fetch one point for every five dollars converted, orders of $300-$999 net one point for every three dollars exchanged and anything between $1,000 and $9,999 comes with one point per dollar – mirroring what you’d earn when using many credit cards.

2. Use your debit or travel money card at an ATM

Provided you can find an ATM that accepts your debit or travel money card, using one to withdraw cash overseas can be much more convenient than ordering money online and wasting precious lounge time queuing at the airport to collect it.

But watch out for the fees – you could be stung for a ~3% foreign currency fee, a fixed withdrawal cost of around A$5 from your local bank and a further charge imposed by the ATM itself, which quickly gets expensive.

To cut down on fees, try to use ATMs within your own bank’s alliance. Westpac, for example, partners with Barclays, Bank of America, BNP Paribas, Deutsche Bank and more to waive the fixed transaction fees at both ends, although still levies that 3% international transaction fee.

Don't walk past that Barclays ATM in London: avoid Westpac's $5 ATM fee here.

Other providers and accounts such as the Citibank Plus Transaction Account come with a Visa Debit card, no monthly account-keeping fees, international ATM withdrawal fees or international transaction fees.

Read more: How to save on overseas ATM fees

3. Take Aussie cash with you and convert it overseas

Another easy way to get your foreign currency is to pack real Aussie dollars in your travel wallet and convert them into a country’s local money on your arrival.

Depending on the country you visit, you may face significantly lower fees than you would in Australia – and can often get a better exchange rate, too.

This method works best for travellers that take off on last-minute bookings, as online currency orders usually need to be placed days in advance and become impossible with this kind of itinerary.

Just be sure you’ll have an opportunity to convert your cash before needing to spend your first dollar, Euro or peso in the country, as you won’t necessarily find a currency exchange booth in every airport’s arrivals hall.

4. Buy American Express travellers cheques

While downgraded in popularity with the advent of travel money cards and ATM alliances, American Express travellers cheques are another way to access your money overseas.

You’ll find them accepted at many hotels, banks and foreign exchange bureaus – either in return for local paper money or as payment for goods and services, and they also come without an expiry date.

Lost or stolen travellers cheques can also be cancelled and replaced with a single phone call, giving them a distinct advantage over carrying a wad of cash.

These are available from a number of Australian banks including ANZ, CBA, NAB and Westpac, at Australia Post and also directly from American Express – shop around for the best overall price as fees and exchange rates can vary.

5. Get a cash advance on your credit card

This isn’t one to keep in your regular repertoire, but if you find yourself stuck without any cash and unable to pay by credit card, you could use that card to obtain cash at an ATM as an absolute last resort.

Bear in mind you’ll likely be stung a fixed or percentage-based ‘cash advance fee’ from your card issuer, and that any interest-free days you’d normally enjoy on your credit card don’t apply to cash advances: you’ll be slogged interest from day one, often at a higher rate than would apply to regular purchases.

Frequent flyer points are also seldom earned on cash advances, so in one withdrawal you’ll turn your fantastic interest-free credit card into a virtual ‘interest machine’ for the bank, and risk being charged interest on all of your purchases – not just the cash advance.

If a credit card cash advance is absolutely unavoidable, repay your total credit card balance in full as soon as you’re able, and confirm with your bank when any interest-free days will again be available to you.

Also read: The best credit cards for international travellers

Follow Australian Business Traveller on Twitter: we're @AusBT

ChrisCh
ChrisCh

Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!

Thalius

Thalius

Qantas - Qantas Frequent Flyer

23 Sep 2014

Total posts 6

Also worth mentioning: Citibank Visa Debit and also, if you're a fan of exchanging AUD, then KVB Kunlun in Sydney - if that's convenient or if you're based in Sydney CBD.

ChrisCh

ChrisCh

24 Apr 2012

Total posts 2917

We mentioned Citibank's Visa Debit card in the second point (which is attached to the Citibank Plus Transaction Account), but good tip on the in-town forex: if the rates are decent, of course!

matto

matto

Qantas

20 May 2015

Total posts 1

Some of the currency cards offered by the banks have improved in recent times. Westpac offers their Global Currency Card (and for existing customers you can order it online in under 3 minutes, and delivered within 3-5 business days). Comes with an app to manage balances, transfer between currencies. Top-up available through online banking and BPAY. You can also load up to 5 (of the available 11 currencies) at once. The AMEX Global Travel card only has 3 currencies available. CBA, ANZ and NAB also offer travel cards. Just pay attention to some of the hidden fees (ie. ANZ charge a $3 monthly inactivity fee, and NAB $4 p/m if you don't use the card for 12 months). Some have large minimum currency loads (ie. ANZ imposes a $200 minimum). And some charge a card closure fee (Westpac $10, Australia Post Load & Go $15, while CBA and ANZ does not charge). 

Disclosure: I work at Westpac

Serg

Serg

QFF

12 Apr 2013

Total posts 1446

Number 5 is what I usually do. However as said in article you will be heavily penalize for cash advance. To avoid this one need get special card just for this reason – there are plenty of free “no frills” credit cards offers from banks. Put some money on card to make positive balance and you are set.

braidenjudd

braidenjudd

20 May 2015

Total posts 1

One of the best is ING Direct account. No fees on any ATMs, 2% cashback on paywave and when you pull money out overseas it is flat $2.50 fee and you get around market rate ~.1% difference from what you'd see on XE.

rowwdy

rowwdy

Qantas - Qantas Frequent Flyer

21 Mar 2013

Total posts 135

And remember - dynamic conversion is bad kids!

bigken

bigken

Qantas - Qantas Frequent Flyer

02 Nov 2014

Total posts 24

I travel with two credit cards, the one with a low cash withdrawal fee and zero annual fee is loaded up with cash before I leave and can be topped up over the internet. I use it only for cash withdrawals and it also acts as a backup to the other card. It works out cheaper that a travel money card, can be used for any currency and doesn't have any unused balance or switching between currencies issues.

You do not mention the trap of having your charges converted to AUD at the ATM or point of sale. Always ask to be charged in the local currency otherwise you will be hit with double conversion costs.

ChrisCh

ChrisCh

24 Apr 2012

Total posts 2917

Hi Ken,

An interesting strategy!

While not touched on in this article, Dynamic Currency Conversion is something we've covered in the past: Five tips for using your credit cards overseas – and indeed, always opt to pay in the local currency!

aldous

aldous

20 May 2015

Total posts 5

Interested in your comment on American Express Travellers' cheques.

For many years, I travelled with these as my "insurance money". Then, about 3 or 4 years ago, I tried to cash about USD500 in Rome. After being given the runaround by their website and on the phone, I finally located their office.

On presenting myself, I was informed they no longer handled cash transactions.

I finally cahed them in London at a ruinous exchange rate.

I'd check with Amex before buying.

justin case

justin case

Qantas - Qantas Frequent Flyer

01 Dec 2015

Total posts 10

If only there is a way to connect with people that don't want use a service or a business to swap currency. Like an app or something.

For example people travelling between LA and Brisbane are going to need to swap AUD to USD and vice versa, so they arrange to meet at the airport,  preferably outside the security office or some other "safee" place and do the transaction across the table.

Iif anyone knows of a service like this that is existing please let me know.

bigken

bigken

Qantas - Qantas Frequent Flyer

02 Nov 2014

Total posts 24

Peer to peer is the current trend for example Airbnb, Uber etc. Maybe  someone will come up with an app that bypasses the banks and foreign exchange rip-offs. It would need to be secure to prevent scamming.


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