Leslie Massey
Whether you're an Australian travelling abroad or a foreigner visiting Australia, you'll need to consider how to get the best exchange rate for your money. While it's generally recommended to buy foreign currency before leaving your home country, this isn't always the case. The best option often depends on the country you're visiting, the type of currency you need, and the payment methods available to you. Let's explore the pros and cons of exchanging money in Australia versus overseas.
| Characteristics | Values |
|---|---|
| Cheaper to buy currency in Australia or overseas? | In most cases, it is cheaper to buy foreign currency in Australia before travelling overseas. However, it is cheaper to convert Australian dollars into foreign currency if travelling to Singapore, Bali, Thailand or Hong Kong. |
| Where to find the best exchange rates in Australia? | The best currency exchange rates tend to be in the city or CBD in each capital city. Foreign exchange stores and money exchange kiosks in these areas tend to have better rates than in the suburbs. |
| What are the advantages of using cards over cash? | Many travellers prefer using cards over carrying large amounts of cash. Major cards are widely accepted in Australia. Cards also offer travel insurance benefits and are generally safer in case of theft or loss. |
| How to avoid extra fees when using cards? | Using a card overseas may result in additional fees and unfavourable exchange rates. It is important to understand the fees and charges associated with your card, and to notify your bank before travelling to avoid any issues. |
| How to get the best exchange rates when buying foreign currency? | It is recommended to compare exchange rates across different providers. Buying foreign currency with cash can help avoid bank fees. Ordering currency in advance may also result in better rates. |
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What You'll Learn
Currency exchange rates
Exchanging currency at the airport is widely considered the most expensive way to convert currency due to poor exchange rates, so it is advised to only exchange a small amount to cover immediate needs. In addition, buying foreign currency online using a credit card can incur more bank fees, so it is recommended to use alternative payment methods such as Bpay or bank transfer.
For popular currencies like the Euro, it tends to be cheaper to exchange them in Australia as banks and money changers hold large amounts of stock and can offer better exchange rates through regular trading. However, for less common currencies like the Hong Kong Dollar or Fijian Dollar, it may be cheaper to buy these currencies overseas, especially in countries that receive a high number of Australian tourists, such as Fiji and Hong Kong.
When travelling to countries like Singapore, Bali, or Thailand, it is generally recommended to carry Australian dollars as money changers will readily accept them and offer competitive exchange rates. Using a card overseas can also be a convenient option, but it is important to be aware of any fees or charges that your bank may apply for overseas transactions or ATM withdrawals.
To get the best currency exchange rate, it is advisable to compare rates across different providers and negotiate the rate, especially for larger amounts. Additionally, consider using online platforms or sending money online with services like Wise, which offer the real mid-market exchange rate without any hidden fees.
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Using cards overseas
Using a card overseas can be a convenient way to spend your money, but it's important to be aware of any associated costs and risks. Here are some key considerations when using cards internationally:
Card Acceptance and Compatibility
Major credit and debit cards, such as Visa, Mastercard, American Express, Capital One, and Discover Card, are widely accepted internationally. However, it's always a good idea to carry some local currency as a backup in case a merchant doesn't accept card payments or experiences technical difficulties.
Fees and Exchange Rates
Using a card that doesn't charge foreign transaction fees can help you save money. These fees, charged by some card issuers, typically range from 2% to 5% of the purchase amount. Additionally, be cautious of dynamic currency conversion (DCC), which allows you to see the cost of a transaction in your home currency but often applies unfavourable exchange rates, resulting in higher costs. It is generally best to pay in the local currency to avoid these extra charges.
Security and Safety
Using a card overseas may come with certain risks. Informing your card issuer about your travel plans can help prevent your card from being blocked due to suspected fraudulent activity. Additionally, in the event of loss or theft, a credit card can be quickly suspended and replaced, providing added security compared to carrying large amounts of cash.
Recommended Cards for Overseas Use
When selecting a card for overseas travel, consider options that offer favourable exchange rates and minimal fees. Here are some recommended cards:
- Barclaycard Rewards Card: This card has no foreign transaction fees, including for cash withdrawals, although you may encounter fees from ATM operators. It uses Visa's standard exchange rate.
- Halifax Clarity Credit Card: This card has no annual or foreign transaction fees, including for overseas ATM withdrawals.
- RBS Credit Card: With no annual, foreign transaction, or balance transfer fees, this Mastercard offers a low APR on spending and competitive exchange rates.
- NatWest Credit Card: Similar to the RBS Credit Card, the NatWest Credit Card has no annual or foreign transaction fees, but there is a small fee for cash withdrawals.
- Wise Card: Although not a credit card, the Wise Card is an international debit card that can be used in over 150 countries. It offers low-cost spending and cash withdrawals at the mid-market exchange rate.
By choosing the right card and being mindful of fees and exchange rates, you can make the most of your spending power when travelling overseas.
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Buying currency in Australia
When it comes to buying currency in Australia, there are a few things to consider. The official currency of Australia is the Australian dollar, which is widely available globally and can be easily purchased in many countries before your trip. However, if you are already in Australia or plan to stay for a while, you may want to consider the following options for buying currency.
One option is to use a bank to buy foreign currency. CommBank, for example, offers the ability to order over 30 foreign currencies online and pick them up at a local branch within 5 business days. This service is available to both CommBank and non-CommBank customers, with a maximum order value of AUD$10,000 in a 24-hour period and AUD$20,000 over a 21-day period. Additionally, CommBank customers can buy or sell up to 9 currencies over the counter at select branches, including USD, EUR, GBP, NZD, JPY, CAD, SGD, HKD, and CNY.
Another option is to use a specialised money exchange service, such as Travelex or Australia Post. Travelex offers the convenience of buying foreign currency online and provides a free cash pickup service at any Travelex store or airport location. They also offer a travel money card that allows you to manage multiple currencies and make withdrawals at ATMs worldwide. Australia Post provides a similar service, allowing you to order over 40 currencies online or in-store and collect them at one of their many participating Post Offices.
It is worth noting that exchange rates can vary between providers and locations, so it is always a good idea to compare rates before making a purchase. Additionally, some services may charge fees for their services, so be sure to review the terms and conditions carefully.
Furthermore, when buying currency in Australia, it is important to consider the safety and security of your transactions. Carrying large amounts of cash can be risky, so many travellers opt for using cards and ATM withdrawals instead. Major cards, such as credit and debit cards, are widely accepted in Australia, and ATMs are readily available. However, it is essential to inform your bank about your travel plans to avoid any suspicious activity flags that could result in a frozen account. Additionally, be aware of dynamic currency conversion (DCC) when using your cards overseas, as it may offer unfavourable exchange rates.
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Exchanging currency at the airport
However, if you absolutely must exchange money at the airport, use a reputable company like Travelex, which is known for fair exchange rates and low markups.
If you are travelling to a country where your home currency is widely accepted, such as Singapore, Bali, Thailand, or Hong Kong, it is better to exchange your money once you arrive at your destination. Money changers in these countries will happily accept your Australian dollars, and their exchange rates are often much closer to the market rate.
If you are travelling to a country where your home currency is not widely accepted, such as Kenya, Chile, or Taiwan, it may be harder to exchange your money once you arrive. In this case, it may be better to exchange some of your money before you leave, but only exchange a small amount at the airport.
It is generally best to rely on cards and ATM withdrawals when travelling, as this can provide you with a reasonable exchange rate and fee. However, be sure to tell your bank that you are planning on travelling to avoid any issues with fraudulent activity.
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Best places to exchange currency
In most cases, it is cheaper to buy your foreign currency at home in Australia before you head overseas. However, there are some exceptions. For example, it is cheaper to convert Australian dollars into foreign currency if you are travelling to Singapore, Bali, Thailand, or Hong Kong. In these places, money changers will happily accept your Australian dollars, and their exchange rates are often much closer to the market rate.
If you are travelling to a country that is less popular with Australian tourists, like Kenya, Chile, or Taiwan, it may be harder to exchange Australian dollars when abroad. In such cases, it may be better to exchange your currency in Australia before your trip.
The best currency exchange rates tend to be in the city or CBD in each capital city. Foreign exchange stores and money exchange kiosks in these areas tend to have better rates than those in the suburbs.
If you are looking to exchange currency in Australia, you can do so at foreign exchange stores and money exchange kiosks, as well as at banks and Australia Post offices. Some banks, such as CommBank, allow customers to buy or sell certain currencies at select branches, while others offer the option to order foreign currency online and pick it up in-branch.
There are also online services, such as Wise and Travelex, that allow you to order foreign currency and pick it up at a nearby location. These services often provide competitive exchange rates and flexible options.
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Frequently asked questions
It is generally recommended to buy foreign currency in Australia before you head overseas as the exchange rates tend to be better. However, if you are travelling to a country like Singapore, Bali, Thailand or Hong Kong, it is cheaper to convert Australian dollars into foreign currency when you arrive at your destination.
It is recommended to compare exchange rates across a range of providers to get the best deal. In the main city centres, there are more businesses selling currency, and they compete against each other to provide the best rates. It is also important to buy currency ahead of time, as it can take a few days for the cash to be available for pickup.
Many travellers choose to carry little cash and rely on cards and ATM withdrawals when they arrive at their destination. Cards are widely accepted in Australia and can be a convenient way to spend your Australian dollars. However, it is important to be aware of any fees your bank may charge for overseas transactions or ATM withdrawals.
