So, you’ve saved up for a fantastic holiday, but now, you need to work out the logistics of the best way to access your money while you are travelling.
Now, how are you going to take all that money with you?
Travelling Locally versus Travelling Overseas
If you are travelling within your own country or domestic travel, then accessing money shouldn’t be a huge problem. I wouldn’t carry big loads of cash as you should be able to access funds practically anywhere using your ATM card. And for those big ticket or unexpected purchases, have your credit card with you for back up.
However, International travel is an entirely different scenario.
Not every country has their own currency system. One example is the Euro where several countries use a single currency system that they created. They may still technically have their own currency, but it is not widely known or used.
The US dollar on the other hand is the most widely used currency in the world with many countries adopting it as an acceptable alternative to their own currency.
So, you may need to have cash in that country’s currency, possibly a debit card that you can use at an ATM and a credit card (just in case). There are also things called Travel Money Cards that can be loaded with different currencies and good old-fashioned travellers’ cheques.
Whenever I travel I like to have a range of options available to me –
• Cash (in your home currency)
• Cash in their currency
• ATM / Debit card
• Credit Card
• Travel Money Card
• Travellers Cheques
I always have some cash on me. But not necessarily the currency of the country that I’m going to.
Each country has their own restrictions as to the amount of cash you are allowed to bring into the country. This is clearly written on the customs declaration that you complete prior to entering. If you are unsure, please make an enquiry prior to travelling.
Changing Money Overseas
You can buy cash in the currency of your choice before you go overseas. But this can be expensive as you can be charged a percentage based on the amount that you buy, and it is normally at a lower exchange rate.
More often than not I will wait until I am at my destination and look for a Currency Exchange or Money Changer and change my cash into theirs as I need it. But after a lesson learned the hard way I always go to an Authorised Money Changer or Currency Exchange.
In some countries you will find dodgy Money Changers everywhere, dotted all over the place, always offering fantastic rates and no commission. You may also find that your moneys a bit light on when you do get it back into your hot little hands! They do this amazing sleight of hand trick. You can watch them count it out and see with your own eyes that it is all there. But somehow, when you get back to your room and check the money in your wallet, it’s not! Its normally only a few dollars missing, and I don’t know how they do it, but it happens. So, its better to spend a bit of time and find an authorised money changer.
In places like Bali they have them all over the place. They don’t charge commission. They have a board that clearly shows you that day’s rate and they cater for a huge range of currencies from around the world. You fill out the paperwork with your details, hand it over with your cash and they show you immediately what you will get on a calculator. So, for example if I wanted to change $100 AUD they would type in 100 and multiply it by the current rate for that currency. There’re no nasty surprises.
If you don’t want to risk a money changer you an always change your money at a bank. Some people prefer this as a safer, more secure option although it may not be as convenient. The only downfall of changing money at a bank is the requirement of proof of identity. As a foreigner, some banks will ask to see your passport prior to exchanging your money. I don’t like to carry my passport when I’m going out and about in case it gets lost or stolen so this was a big downside for me.
Alternatives To Carrying Cash
Whether you want euros, baht, ringgits or pesos, withdrawing cash from an ATM is often the cheapest and easiest way to get cash while travelling overseas. Because it is based on the wholesale exchange rate you will normally get better value for your money than you would changing cash at a money changer. They do however charge transaction fees which are normally displayed on the screen at the time of the withdrawal. You may also get charged a foreign exchange fee, depending on your bank.
You can access thousands of ATMS worldwide, but it is probably a good idea if you are going to a very remote area to check the availability of ATMs in that region before you go. Most ATM cards are associated with a specific network such as Cirrus, Maestro or PLUS and you can normally find this information on the back of your debit card. If you are unsure, it might be a good idea to contact your bank before you embark on your travels.
Most ATM’s give you the option of English or the language of that country. So, if you do not see the English option then I would recommend finding a different ATM.
Also, use due diligence and check the safety of the ATM and its surroundings. Make sure that it is secure, private and enclosed or that you are not in a big open area where people can access you. I suggest that you also have a play around with the machine and wiggle on the section where you insert your card. This is because ATM’s are widely known to be targeted for skimmers. Skimmers are basically an additional card reader that can be attached to the ATM where you insert your card. And most times you cannot tell the difference. So, have a bit of a pull. If it doesn’t wiggle or budge its usually ok. If it comes off in your hand, then it is not actually part of the ATM and is probably a skimming device.
I had a terrible experience while overseas a few years ago. I went to a bank of ATM’s located in front of a popular tourist spot. They were each in their own clean, secure, private cubicles, with a security guard at one end. So, I assumed it was a safe place to get my money. I inserted my card to get an account balance, to see how much money I had. I asked for a printout, I had a quick look and decided how much money to withdraw. I inserted my card again and low and behold, my balance was different! Even though I hadn’t taken any money out! Understandably I freaked out and I got my card and got out of there. But I did keep the 2 print outs that I had received from the ATM, clearly showing the balances and time (they were about 30 seconds apart). I took these into my bank once I got back to Australia and started the process of claiming the money back. It was clear that hundreds of dollars had just disappeared from my account in mere seconds without any withdrawal on my part. So, do, be careful and do a safety check before you proceed.
Credit cards are great. They can get you out of trouble if you’re in a bind or can be used for those unexpected or big-ticket items you never expected to purchase.
Most retailers will display a list of credit cards that they are happy to accept but be prepared that your card may not be one of them. Check before you travel that your credit card is on the list of accepted cards at your destination. Once again, the most commonly accepted cards worldwide is Visa and MasterCard (Cirrus, Maestro or PLUS) with American Express (AMEX) and Diners Club less widely accepted outside of the US.
The great benefit of making purchases using your credit card is that you will be charged fees according to the country of issue, not the country you are in. So, no nasty inflated foreign fees associated with your purchases. Some places give you the option of paying for things in their currency or yours at the point of sale. Always choose theirs so that you don’t have any foreign conversion fees added to the cost of purchase.
But, unless it is a case of dire emergency, do not withdraw cash from your credit card. If you use your credit card for cash you will start being charged interest immediately, you do not have the benefit of interest free days as with purchases. Also, the interest rate for cash withdrawals is much higher than for purchases.
I personally don’t like to let my credit card details be copied or have the card go out of my sight. This is partly my fear of skimmers but also from experience.
Once while travelling in Thailand I used my credit card to purchase some jewellery. It wasn’t some shifty little place. It was a high-end jewellery store that had branches in Hong Kong, Sydney, Singapore and Thailand. It was after I got home that I received notification from my bank that they were putting a hold on my credit card due to suspected fraudulent activity. So, I headed into the bank and asked them what was going on. Before proceeding, they asked if I had my credit card on me and could they sight it. After producing my credit card, they explained what was happening. My credit card had just been used in the United Kingdom at Tesco’s to the value of over $3000 Australian dollars. And it had literally maxed out my credit card to the maximum available limit! Now the interesting thing was, the only time that I had used my credit card was at that high-end Jewellery store in Thailand. Somehow, during the brief time that it had been out of my sight they had extracted or skimmed the details and a new card bearing all my details had shown up in the UK. So just be careful. Don’t let your card out of your sight.
Generally, when I travel now I don’t use my credit card unless it is an absolute emergency. I take it with me but don’t let anyone know that I have it. For example, when checking into your accommodation they normally ask if they can keep a copy of your credit card on file for ‘incidentals’ like room service, mini bar etc. then when you check out they debit your card for the associated costs. I just tell them I don’t have a credit card and provide them with cash which I will receive a receipt for. Then if there are any incidentals requiring payment they can take it out of the cash and give me the change. Some establishments are happy to accept cash in your currency, but some prefer their local currency. Either way, that is how I prefer to do it now.
Travel Money Cards
These are becoming much more popular now, are widely accepted, and can be used in most ATM’s around the world. The principal is the same as a debit card. Your travel money card is loaded with money in your chosen currency and you can access it directly via an ATM.
The biggest drawback is that you have to preload the card prior to travel, purchasing the currency at the current exchange rate. That’s great if the rate is good at the time but not so great if the rate drops after you’ve purchased it. But it does mean that you will know exactly how much you have and there are no further hidden costs like foreign exchange fees at the time of withdrawal.
They can however be reloaded on line directly from your smart phone via a travel money app. It can take up to three days for it to load so some pre planning of expenditure it required.
Travel Money cards can normally be obtained from most banks, the post office and travel agents. You can even look them up online and sign up for one without leaving the comfort of your own home. This is often a great way to obtain them as you can get fantastic rates and offers associated with them when you first load them.
While you are travelling you can access your bank via the internet or Online Banking.
This is great if you are using your debit card and you don’t want to have a huge amount sitting in that particular account. You can transfer money into it as you need it.
Personally, I wouldn’t do it on any facilities provided by the hotel. Quite often they will have an internet lounge or place where you can go on their computers. Don’t do it. Don’t put any of your private or banking information onto a shared device. Use your own smartphone or tablet or laptop. This way your personal details can’t be accessed by anyone other than yourself.
And it’s a great idea to put these items in your safe when they are left unattended, just in case.
Travellers Cheques are another option that you can use, although they are pretty rare nowadays.
Back in the days when I first started travelling overseas, I would take a small amount of cash and the rest in travellers’ cheques. This afforded me an extra layer of protection because if travellers cheques get stolen they can’t be cashed by just anybody. This is because they are registered to a specific person, the owner, and require proof of identity to be able to cash them.
But in reality, they are just not convenient anymore. Yes, they offer you a sense of security but once again you would need to take your passport with you to be able to cash them, and less and less places accept them or cash them.
Do What Works For You
So, with the wide range of access to funds available to travellers these days I think the only thing left is to decide what is the best option for you. Personally, I wouldn’t put all my eggs in one basket and would choose at least 2 options.
Have money, will travel…