Perspectives of an Aussie traveller
A question that frequently comes up on travel forums is about the best way to pay, when travelling.
I headed off on a one way ticket to London via Japan in the 1980s, armed with Yen, Pounds and travellers cheques. Thank goodness those bad old days are over!
But cash isn’t quite obsolete yet, so these days I tend to use a combo of cash, a debit card for ATM withdrawals and a travel-friendly credit card.
Destination is the key
What country or region you’re holidaying in will largely determine what you use most.
A lot has changed since the world started travelling again after lockdown. The way we spend our money is one of them.
In recent years many of us have gone cashless. This has changed the culture in some countries. Japan for example, a long time stalwart of the cash economy, became less so post pandemic. Though some vendors are still strictly cash and there are sometimes issues with foreign credit cards.
It’s worth doing some research before heading off, as you can be caught out if you get it wrong. Travel forums are a good place to start, for up to date information. A holiday in Scandinavia is likely to be cash-less, while chilling out in a Balinese village might be the opposite.
Cash
Countries with a lower cost of living tend to favour cash. In South East Asia, ride shares (Grab etc aren’t linked to a credit card like Uber at home), eateries and buying low value items, usually require local currency.
Most of my recent travel has been in Asia. Hotels usually take credit cards or Airbnb is prepaid but cheap home stays might differ. In Asia cash is still a necessity for smaller transactions, ride shares and some meals. Bartering in markets, cash is still king (and often the only option).
It’s wise to have at least enough cash for a taxi on arrival and a meal on the first day. Which might mean going to a money exchange at home before leaving.
Airport bureau de change are guaranteed to have to worst rate, but better than nothing if not organised. Many airports on arrival will have ATMs but is navigating this the first thing you want to do after staggering off a long flight?
Money changers
In Asia, money changers often give the best rate for cash but always check what is and isn’t covered. A great rate may only apply for certain sized/quality notes (high value/crisp and new) and a minimum amount exchanged. They might slap transaction fee on top. If a rate seems too good to be true, it’s because of some of these factors.
Can money changers be trusted? I’ve found more sleight of hand in Bali than Malaysia or Thailand. Always count and count again before leaving. Even then, you might still be tricked especially when unfamiliar with small denominations. Your hotel or host can often recommend the best place to change money locally.
An advantage of changing money over ATMS, other than better rates and no extra fees, is it’s easy to change small amounts so you don’t end up with unused currency when you leave the country. I usually take Australian dollars to change, occasionally smaller denominations of other left over Euro of USD from previous trips.
Tip: avoiding exchange rate mental gymnastics!
While using a currency conversion app is useful for large amounts, I picked up this amazing tip before going to Vietnam. Use a screenshot of the most recent exchange rate before leaving, and make it your phone lock screen.
The one on an online forum included the colour of the notes – which was fantastic.
You can make your own by taking a screen grab, or cut and paste, the current exchange to your local currency on xe.com.
This takes the guesswork out of currency conversion especially when denominations extend into the thousands or even millions!. You don’t mix up the worth of 10 for 1,000 baht!
As it’s on you lock screen, you just need to tap the screen without using face identification or PIN (like when you want to see the time).
ATMs
Using a hole in the wall is how most travellers access cash on the road. I’ll often bring a debit card for this, to avoid high interest rates on credit cash withdrawals.
Many foreign ATMs have an English option for screen display. All will charge fees, so consider taking out larger amounts less frequently. The local fee can vary widely, another tick to travel forums that can update you of the best ones to use.
In most cases you’ll get stung with a foreign transaction fee by your home bank as well.
Pre-loaded travel cards like Wise are a handy alternative/addition to credit cards but be aware they still have fees for ATMs. Currently this is AU$1.50per transaction, plus 1.75% of the withdrawal amount.
Cards
Credit/debit card use is almost universal in the developed world. It’s impossible to travel without one in some places. Now, they’re more convenient than ever, loading your cards onto phones or smart watches with Apple/Google Pay.
Other than the ease of paying and safety of not carrying wads of cash, in cities like London and Sydney, you can tap and go with your card/phone on public transport, which takes the stress out of needing to buy tickets or local travel cards.
But there are a few things travellers need to be aware of.
Foreign transaction fees
Keep in mind your bank’s foreign transaction fees (and exchange rates) on purchases. Do you want to give your bank a few extra dollars every time you pay to ride a few stops on a city train?
If you’re a frequent traveller, finding a credit card with special features for overseas transactions is worth exploring. These offer a fee-free, reasonable exchange rate and additional benefits like complimentary travel insurance and extended warranties when buying items overseas.
Remember when using your card overseas, to decline the option to pay in your home currency. The conversion rate is never in your favour, so always chose the transaction in local money.
Debit card pros and cons
I tend to only use debit for ATM withdrawals, as the last thing I want to do is wrack up cash advance interest rates using a credit card.
Avoid using debit cards for hotel authorisations (see why below).
When plastic is fantastic!
I stupidly got caught out last year on an interstate trip, checking into a hotel without a physical credit card! So used to leaving the house with just my phone and keys, I’d got out of the habit of having an actual card on me in Australia.
Most hotels can’t place an autherisation hold for incidentals and damages on a virtual credit card/Apple Pay! Usually preauthorisation freezes the charge without actually taking the money out of your account. With no plastic, the deposit is charged up front on the virtual card, which in my case needed to be manually reversed at check out (always the busiest time of day!)
And while we’re talking about hotels, another good reason to use a credit rather than debit card for travel, is the authorisation hold will suspend your access to a large chunk of debit in your account. Sometimes it can take up to a week for the funds to be released. When checking into a couple of hotels in a short period of time, it can lock all your available funds. While it won’t suspend those funds on a credit card, and should have been fully reversed before your monthly card statement is due, keep in mind it can impact your available credit limit for this time.
Plan for emergencies
Except on travel days it’s rare to need to carry all your cards and cash on you. On those days, always carry them on/with you (such as in a cross body bag, never in checked in or unattended luggage.
When touristing, take the same precautions as you’d do when carrying valuables at home. (On that note would you use a money belt or stuff your bra with cash at home? No I didn’t think so!)
It’s a good idea to have a second credit or debit card for emergencies locked away in your hotel safe, with passport and excess cash. Just take what you need for the day, as accidents (or light fingers), are part of life.
Always let your bank know when and where you’re travelling, to avoid your card or account being frozen due to ‘suspicious’ ie: foreign, transactions. It’s easy to do this through your online banking app. And remember to keep a note of how to report lost or stolen cards when out of the country.
What are you travel money tips?
Pack light! The less you have, the fewer valuables, the less you have to lose!
travel over 40 