Lexi Webster
When travelling between Australia and the USA, it is generally recommended to carry some local currency for each country. In most cases, it is cheaper to buy foreign currency in Australia before travelling overseas, especially for popular currencies like Euros, which money changers hold in large amounts. However, when travelling from Australia to Singapore, Bali, Thailand, or Hong Kong, it is cheaper to convert Australian dollars into foreign currency upon arrival. Additionally, for less common currencies like the Hong Kong and Fijian dollars, it may be more cost-effective to purchase them overseas. When exchanging money, it is advisable to compare exchange rates and avoid airport exchanges, which often offer poor rates. Carrying a credit or debit card is also convenient, but be mindful of dynamic currency conversion and inform your bank about your travel plans to avoid potential issues.
| Characteristics | Values |
|---|---|
| Exchange money in Australia | In most cases, it is cheaper to buy foreign currency in Australia before travelling overseas. |
| The Australian dollar is widely available and traded globally, so the exchange rates should not vary too much. | |
| It is recommended to carry some AUD when travelling to Australia for emergencies and casual purchases, especially since many places in Australia prefer card payments. | |
| It is better to exchange popular currencies like Euros in Australia as banks and money changers hold large amounts of stock and can offer better exchange rates. | |
| Exchange money in the USA | It is almost always better to buy currency in the country that issues it. |
| Using a US credit card in Australia may incur foreign transaction fees and poor exchange rates, so it is important to check the foreign exchange policies with your bank before travelling. | |
| Dynamic Currency Conversion (DCC) may be applied when using a US credit or debit card in Australia, resulting in an unfavourable exchange rate. | |
| Exchanging no more than $100 USD in the US is recommended, as it may be difficult to find favourable exchange rates for other currencies. |
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What You'll Learn
Exchanging currency in Australia vs. the USA
When it comes to exchanging currency, there are a few factors to consider when deciding whether to do it in Australia or the USA. One important consideration is the availability and popularity of the currency you need. As one of the most globally traded currencies, Australian dollars are widely available, and exchange rates shouldn't vary too much whether you buy them in Australia or abroad.
On the other hand, if you're looking to exchange US dollars to Australian dollars, it might be worth considering doing this in Australia. Money changers in countries frequently visited by Australians, such as Singapore, Bali, and Thailand, are more likely to accept Australian dollars and offer competitive exchange rates.
Additionally, it's essential to consider the convenience and safety of carrying cash versus using cards. Many travellers prefer to rely primarily on cards and ATM withdrawals when they arrive at their destination, as it can be safer and more convenient than carrying large amounts of cash. However, it's always a good idea to have some local currency on hand for small purchases or emergencies, especially if you're travelling to a place with limited ATM access or unreliable internet connections.
When exchanging currency, it's crucial to shop around for the best exchange rates. Exchange rates at airports and hotels tend to be less favourable, so it's recommended to only exchange a small amount to cover immediate needs and then look for better deals elsewhere. City centres and CBD areas usually offer more competitive rates than suburban areas. It's also worth comparing rates online and negotiating with money changers, especially for larger transactions.
Lastly, be mindful of the fees and charges associated with using cards overseas. Some banks may charge foreign transaction fees or unfavourable exchange rates for overseas purchases or ATM withdrawals. It's essential to understand your bank's policies and consider alternatives, such as cards with no foreign transaction fees or using a money transfer service that offers the mid-market exchange rate. Additionally, always inform your bank about your travel plans to avoid potential issues with fraudulent activity flags.
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Using ATMs in Australia
When using ATMs in Australia, it's important to be aware of the fees involved. Australian banks charge non-customers—including those using foreign cards—an ATM fee, usually AUD$2 (approximately US$1.50) per transaction. Private ATMs, which are not branded with a specific bank's name and logo, charge even higher fees, so they should be avoided if possible. Most banks also charge an ATM withdrawal fee and a foreign currency exchange fee. To minimise these fees, it's recommended to use ATMs from banks that have a partnership with your home bank, as this may allow you to use their ATMs for free or at a reduced cost. For example, Westpac, Australia's second-largest bank, is part of the Global ATM Alliance, which includes banks like Barclays, Bank of America, and Deutsche Bank.
It's also crucial to understand how currency conversion works at ATMs. If given the option, always choose to be charged in the local currency (Australian Dollars) rather than allowing the ATM to perform the conversion to your home currency. ATMs that offer to convert the transaction to your home currency often apply an unfavourable exchange rate through Dynamic Currency Conversion (DCC). By choosing to be charged in the local currency, you can avoid this pitfall and get a fairer rate. Additionally, consider informing your bank that you're planning to travel, as this can help prevent your account from being flagged for fraudulent activity due to foreign transactions.
Some Australian ATMs, particularly those owned by ANZ, support contactless technology. If you have a contactless bank card, you can tap it instead of inserting it into the machine, but you'll still need to enter your PIN. These contactless ATMs can be recognised by the contactless symbol. When using ATMs in Australia, it's generally safer to rely on major cards, as they are widely accepted. Carrying some cash as a backup is also advisable in case you encounter locations that don't accept card payments.
While using ATMs in Australia can provide convenient access to cash, it's worth noting that buying foreign currency before arriving in the country may sometimes offer better rates. Exchanging currency at airports, for instance, is generally considered expensive due to unfavourable exchange rates. In contrast, foreign exchange stores and money exchange kiosks in cities or CBD areas tend to provide more competitive rates. However, this can vary depending on the specific currency involved. For popular currencies like Euro Dollars (EUR), Australia may offer better rates because banks and money changers deal with these currencies frequently. On the other hand, for less common currencies like those of less-touristed countries, it may be more advantageous to exchange currency upon arrival in those countries.
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Dynamic Currency Conversion (DCC)
When travelling, it is generally recommended that you buy your foreign currency in your home country before you head overseas. However, this is not always the case, and it depends on where you are travelling from and to. For example, if you are travelling from Australia to Singapore, Bali, Thailand, or Hong Kong, it is cheaper to convert Australian dollars into foreign currency overseas.
If you are using a card overseas, be aware of something called Dynamic Currency Conversion (DCC). DCC is a financial service used in international transactions when a customer from one country makes a credit or debit card purchase in another. DCC allows the transaction to be processed at the point of sale in the currency of the cardholder's home country. For example, consider an American tourist in Italy who wants to buy an item that costs €100. The POS system recognizes the credit card as American and offers to charge $120 (which includes the DCC exchange rate and fees). The tourist can choose to pay $120, knowing the exact cost in their currency, or pay €100, leaving the conversion to their bank.
Merchants and ATMs should give you the choice to accept or decline currency conversion, and they must not choose on your behalf. Visa and Mastercard require the customer's consent for DCC, and Visa Chargeback reason code 76 explicitly covers situations where the "Cardholder was not advised that Dynamic Currency Conversion (DCC) would occur" or "Cardholder was refused the choice of paying in the merchant’s local currency". If you do not see the required details or feel pressured to choose one currency over the other, Visa recommends that you decline the currency conversion offer and report the incident to your card issuer.
The exchange rates in DCC often include a markup over the daily bank exchange rate, which can result in higher costs for the cardholder. This markup is a combination of the currency conversion fee and a profit margin for the business or the DCC provider. DCC transactions typically involve additional fees, which are bundled into the exchange rate offered to the customer. However, proponents of DCC argue that customers can better understand prices in their home currency, making it easier for business travellers to keep track of their expenses. They also argue that customers have full transparency, including conversion fees, and can make informed choices about whether or not to use DCC.
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Best places to exchange currency in Australia
When it comes to exchanging currency in Australia, there are several options available to get the best rates. Here are some recommendations:
Banks
Major banks in Australia, such as CommBank, offer foreign exchange services to their customers. You can buy and sell various currencies, including USD, EUR, GBP, NZD, JPY, CAD, SGD, HKD, and CNY. Check with your bank to see if they offer similar services. CommBank allows customers to order online and pick up their foreign currency from a local branch, offering convenience and competitive exchange rates.
Online Services
Online services like Wise and Travelex offer competitive exchange rates and flexible options for ordering foreign currency. Wise allows you to send money to Australia using the mid-market exchange rate, ensuring no hidden fees. Travelex offers a wide range of currencies and the convenience of ordering online or via their app, with the option to collect your cash in-store.
Australia Post
Australia Post provides a convenient way to order foreign currency online or in-store, offering over 40 currencies with $0 commission fees. You can check their exchange rates, order online, and collect your cash from one of the many participating Post Offices across the country.
Money Changers in CBD Areas
If you're looking for competitive exchange rates, consider visiting foreign exchange stores and money exchange kiosks in the central business district (CBD) of major cities. These stores often provide better rates than those in suburban areas.
Airport Exchange Services
While it is generally recommended to avoid exchanging large amounts of money at the airport due to less favourable exchange rates, it may be a convenient option to exchange a small amount upon arrival to cover immediate expenses.
Remember to compare exchange rates and be mindful of any associated fees to get the best value when exchanging currency in Australia.
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Best cards to use in Australia
When it comes to the best cards to use in Australia, there are a few options to consider, depending on your needs and circumstances. Here are some recommendations and key considerations:
Revolut Card
Revolut is widely considered one of the best options for a travel card in Australia. It offers a flexible and versatile account that can be used for various purposes. With Revolut, you get a debit card, a multi-currency account balance in 32 currencies, and a user-friendly mobile app. Revolut is known for its vast currency options and additional services, such as international money transfers and a money management interface. However, it's important to note that Revolut has a cap on free allowances, and fair use limits and weekend surcharges may apply.
Wise Card
Wise, also known as TransferWise, offers one of the best multi-currency cards available. You can load up to 54 currencies onto the card at the real exchange rate, ensuring transparency and avoiding hidden fees. Wise charges a low commission fee per transaction, ranging from 0.35% to 2.85%, depending on the currency. It is important to note that Wise is an electronic money account held by local banks, so there may be differences compared to traditional bank accounts.
Standard Bank Cards
Using your ordinary debit or credit card in Australia is also an option, although it may be more expensive due to exchange rate fees and currency conversion fees. If you choose this route, look for a card product that explicitly waives foreign transaction fees. Some Australian banks offer prepaid debit cards that allow you to load AUD and convert it into various foreign currencies.
UK Credit Cards
If you are travelling to Australia from the UK, you may be able to use your UK credit card. Visa and Mastercard are widely accepted in Australia, although American Express may not be accepted everywhere. Check with your card provider to see if they charge any foreign currency transaction fees. Some recommended UK credit cards for use in Australia include:
- Halifax Clarity Credit Card: No annual, foreign transaction, or ATM withdrawal fees, but interest on cash withdrawals starts accruing immediately.
- Barclaycard Rewards Card: No fees for spending or withdrawing cash overseas, and offers cashback on everyday spending.
- RBS Reward Black Credit Card: No foreign transaction fees for spending, but a fee for cash withdrawals in Australia. Offers rewards for everyday spending and has an annual fee, which can be waived under certain conditions.
Australian Credit Cards
If you are looking for an Australian credit card, there are a few things to consider:
- Your spending habits and how you will pay off your credit card balance.
- The features and costs of different cards, which can vary depending on the issuer, card type, and network.
- The type of credit card that suits your needs, such as low-fee cards, rewards programs, or cards with complimentary insurance.
- Whether you want a card with a balance transfer offer and if you can pay it off within the offer period.
- The availability of frequent flyer or rewards programs, and if they align with your existing memberships.
In summary, when choosing the best cards to use in Australia, consider your specific needs and circumstances. Revolut and Wise are excellent options for travel cards, while standard bank cards and UK credit cards can also be used with certain considerations. If you're looking for an Australian credit card, research and compare different options based on your spending habits, fees, rewards, and other features that are important to you.
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Frequently asked questions
It is generally recommended to buy currency in the country that issues it, so it is better to buy Australian dollars in Australia and US dollars in the USA. However, there are exceptions. For example, if you are travelling from the US to Australia, it is worth carrying some Australian cash for small purchases or emergencies, but it is advised to rely mostly on cards and ATM withdrawals.
It is recommended to compare exchange rates across a range of providers to get the best value for money. Foreign exchange stores and money exchange kiosks in the city or CBD usually offer better rates than those in the suburbs. If you are exchanging a large amount, try to negotiate a better rate.
It is advised to exchange no more than $100 in the US, even if you plan to use cash in Australia. Check with your bank what exchange rate they offer and what fees they will charge for foreign currency transactions. It may be worth considering getting a new card with no fees for foreign exchange transactions.
