Choosing The Best Currency Exchange When Travelling Overseas

One of the most overlooked tasks when planning a holiday is the purchasing of foreign currency.There are a number of options with varying currency exchange rates.Lets go through the options.

Credit Cards

Credit cards are a mixed bag. There are few specialist credit cards which offer the current exchange rate with no cash withdrawal fees. These cards will still charge interest even if paid in full. This is really as good as it gets. Most other credit cards charge 3% on top of the exchange rate and charge for cash withdrawals. Interest is also charged even if the balance is paid in full.

Debit Cards

Debit cards can be the worst way to spend money overseas. Almost all debit cards add between 2 and 3% on top of the currentcy exchange rate. The banks don’t stop there. 1% charges are added for spending as well as a typical 1.5% cash withdrawal fee. Some banks offer travel friendly debit cards with certain account so I recommend speaking to your bank or check their website for special offers.

Travel Cash

Travel cash is usually easy to get hold of. Most travel agencies will offer 0% or a marginal commission fee with a competitive exchange rate. It is always a good idea to enquire a week or two before travel for obscure currencies but in general foreign currency can be purchased on the same day from Travel Agencies. If ordering from your bank please allow more time for delivery although some banks restrict this service for certain customers.

Never exchange money at airports or on ferries. To say that the exchange rate is unfavourable is an understatement.Also remember that debit and credit cards will charge an additional fee when purchasing currency at a Bureau de change.

Although travelling overseas with some foreign currency is advantageous it is not ideal.The travel money is not insured by the Travel Agent. If the travel money is lost abroad there is no there is no replacement. Your travel insurance may cover some spending money but will not cover the whole amount.

Prepaid debit cards

Prepaid debit cards are my preferred way of spending money abroad. The exchange rates are very competitive. They can be purchased at either Travel Agencies or Post offices. The cards with the best deals are found online however. All prepaid cards can be loaded without a fee either at the branch, online or over the phone even from overseas. Pre paid debit cards are commission free from outlets and loaded with money immediately. There is usually a charge of around 1$ for cash withdrawals but nor charges for using it as a debit card.I usually withdraw money no more than three times for a two week holiday and make debit card purchases for the rest of the time. Two cards can be ordered for the same account. In the event of the card being lost a replacement will be with you within 24 hours.

The cards companies are backed by banks so if they went bust your money is safe. If the bank goes bust you would not be covered so as a precaution It is always a good idea to load the money near the time of travel instead of using it as a place to store cash.