It's easier than ever to get money overseas, but that convenience comes with a cost. From avoiding ATM expenses to not getting slugged with currency conversion fees, these are our best tried-and-tested tactics to keep those bills lower.
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Being able to use your credit card or bank account overseas is a massive improvement on the old-fashioned approach of organising traveller's cheques or travelling with multiple wads of different currencies. However, if you don't pay attention, you can easily end up paying a hefty price for that convenience. Total up the per-transaction charges and the often sub-optimal conversion rates and you might be surprised at the total. Avoid that horror by following this advice.
6. Don't make repeated ATM trips
If you have no local currency and really need some, hitting an ATM is an obvious choice. Just remember you'll be paying two sets of fees: currency conversion charges and a foreign country ATM charge. If you do want to use an ATM as an exchange mechanism, calculate how much money you'll need for the rest of the trip, and withdraw that amount. Repeated visits will do you no favours. (You're also less likely to be aware of potentially suspicious modifications on overseas ATMs, so choose your withdrawal locations with care. As a rule of thumb, machines that are part of bank branches are less risky than standalone machines.)
5. Be cautious with hotel pre-authorisations
Virtually all hotels will swipe a credit card to cover "incidentals" when you check in. In practice, they usually take a pre-authorised payment (often $50 or $100), and it can take up to a week for this money to be "refunded". Factor that into your planning, especially if you're trying to avoid interest payments or don't have a lot of spare credit. You can avoid this expense by paying a cash security deposit instead, but this creates other hassles: you'll often be asked for a larger sum, you'll need the money to hand, and the checkout process can be delayed since some hotels will insist on manually checking the room before handing back your security deposit.
4. Check credit card exchange rates and charges
Paying using a credit card can save you money: the exchange rates can be more competitive, and individual credit card transactions won't rack up fees at the same rate as endless trips to the ATM. However, details differ heavily between cards. Some charge a per-transaction fee for anything other than your 'native' currency; others don't do that, but use a much lower conversion rate than you'd expect. Find out in advance, and work out which option will suit your needs best. Debit cards ensure you aren't spending money you don't have, but often have a different set of fees to their equivalents.
3. Make sure you have a back-up card
While credit card acceptance is close to universal in major destinations, that isn't always the case. There are lots of ways you can get caught out. An individual restaurant might only accept one type of card. Some ATMs overseas won't work with all cards. In countries which use pin numbers, signing may not be accepted. A suspected fraudulent transaction might result in your bank suspending your card. In all these circumstances, having a second backup card gives you additional options to handle ongoing expenses or emergency payments.
2. Convert in advance for better rates
If you're an organised traveller with a trip booked in advance, you can watch currency movements and time your conversion to moments of maximum advantage. This isn't an exact science -- currency fluctuations can happen unexpectedly at any time, and what seems to be a good rate right now still might not represent the absolute best value over a 12-month period. However, if the value of Australian currency relative to your destination appears to be entering a period of decline, converting can help you make the most of what you have.
1. Pay in advance and set a daily budget
All of the tactics will be more effective if you have an overall travel budget to start with. You'll almost certainly pay for flights in advance, but other options can vary (some hotel bookings are paid for at time of booking, but many are only secured via a credit card and are actually paid on departure.) The more you've paid for prior to departure, the less hassle you'll experience on the road. In the same way, if you work out a daily expenditure allowance covering meals, shopping and excursions, you'll be able to change money more effectively and can charge items to your credit card without panicking.
Got extra strategies to add to this list? Share them in the comments.
Lifehacker Australia editor Angus Kidman needs a bigger drawer for all his spare travel currency. His Road Worrier column, looking at technology and organising tips for travellers, appears each week on Lifehacker.