Update: We’ve updated our advice to you for deciding how to take your money overseas. Check it out at Ways to access your money when you travel.
Once you’ve worked out where you’re going on your holiday and for how long, you’ll just need to figure out how you’re going to access your money when you’re overseas.
The right foreign currency option for you depends on:
- where you are travelling to and if there will be internet and ATM access
- whether you like to plan ahead or prefer to be more spontaneous
- how frequently you want to withdraw cash
- the way you like to keep track of your spending
- how important it is for you to lock in exchange rates before you go
- the type and number of currencies you want access to
- the type and level of security you’re after.
You should probably have at least two different ways to access your money when overseas, just to keep your options open and make sure you’re never stranded without funds.
Cash is great for incidentals when you arrive
You can buy just about any foreign currency from a bank or currency exchange before you go. Depending where you’re headed, you might need to order the currency in. It could take a few days to arrive so allow plenty of time.
Pre-buying foreign cash helps you budget because you’ll know exactly how much money you have left as you spend it. And it’s great when you arrive in a new country and can get a coffee or pay the taxi without having to visit a bank or travel bureau first. But travelling with a large amount of cash isn’t particularly safe, so you might want to consider some other options as well.
Travellers’ cheques for added security
Travellers’ cheques have the added security of needing ID to be cashed. Plus, if they get lost or stolen, they can be replaced in a few days. They are becoming less common though, so it’s wise to do some research and make sure you can cash them where you’re going.
You also don’t know what currency exchange rate you’re going to get, which can impact your budget. And there’s usually a fee for purchasing and cashing travellers cheques, so check these out too.
Credit cards are convenient and widely accepted
You can use your credit card overseas, which you might find more convenient than setting up something specifically for travelling. Some premium credit cards have handy benefits like travel insurance so you could think about choosing a card that offers this. See the credit card comparison table for more details.
Visa© and MasterCard© are accepted widely around the world – but keep in mind that you’ll be charged a cash advance fee for using ATMs, and if you withdraw cash you’ll start accruing interest straight away (probably at a higher interest rate than for purchases). You can read about cash advance interest in Five types of credit card interest. One way to avoid cash advance interest is to put money into your card so that it is in credit (positive balance). This way you’re using your own money to travel.
With credit cards, you won’t know what currency exchange rate you’re going to get, which can make budgeting harder. And there may be ATM fees – both from your bank and from the ATM operator – and foreign currency fees each time you withdraw.
If you’re away for more than a month, you’ll need to keep track of your spending and manage payment to your credit card to avoid a late payment fee. If you have access to NAB Internet Banking from overseas, you can set up a reminder and make payments more easily.
Debit cards use money from your own account
You should be able to use your existing ATM card in most places overseas, although you should have a back up, debit cards (unless they are Visa or Mastercard) are not as widely accepted. The advantage of this is that you’re using your own money – however you won’t know what exchange rate you’re going to get which might make it harder to budget.
A NAB Visa Debit Card gives you the same access overseas as a credit card, but it uses your own money from your everyday NAB account. So you won’t pay interest on your purchases or withdrawals, but you’ll still be charged currency conversion fees on purchases and overseas ATM fees. This won’t get you into debt, but if your salary comes in late or you miscalculate and run out, you may need a back up to access some money if you need it.
Travel cards let you lock in an exchange rate
Most financial institutions sell travel cards, where you pre-load a card with foreign currency (or currencies) and use it for purchases or ATM withdrawals overseas. You’ll need to make sure that the card you get can hold the right currencies for the countries that you’ll travel to.
Travel Cards have the advantage of locking in the exchange rate for the funds that you “load” on to the card before you go, so there’ll be no unexpected currency variations for each transaction as long as you have the currency you are using loaded on the card.
If however, you “run out” of a currency that you have loaded on to the card, or make a purchase in a currency not on the card, the amount will be taken from other currencies. When this happens, you are exposed to the exchange rate and you will also be charged a currency conversion fee. So, if you’re using a travel card, make sure that you plan well and track your spending to avoid these fees. You can keep track of spending by checking your balance online. If you need to, you can top up your card using BPAY© but make sure your default currency is set to the currency you are loading.
If you’re worried about security, a travel card might be a good option for you because it’s not linked in any way to your regular bank accounts, and it’s Chip and PIN protected. You get a spare card as back-up, too.
If you like to only take out small amounts of cash at a time, you’ll appreciate that NAB doesn’t charge you for using the NAB Traveller Card at ATMs overseas. (The ATM operator may, however, charge you a fee.)
There are multiple currencies available on travel cards, usually between five and ten – find out more about How travel cards work.
Choose a mix to suit your travel needs
Whether you’re off for a long or short holiday, it’s good to have a couple of ways to access your money. Choose a mix that suits your needs – maybe a NAB Traveller Card for regular spending with a credit card for emergencies; or take some foreign currency as well as a NAB Visa Debit Card. It really depends on the type of trip you’re taking and the type of traveller you are.
Before you go
Before you travel, have a read of these:
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