This was published 7 years ago
Top 10 smartest ways to travel with money: Cash, credit cards, travellers cheques and more
Despite all the digital options, cash remains the most convenient way to carry money overseas.Credit: iStock
1 CASH
It may sound obvious, but in an era of proliferating digital options the most convenient way to carry money overseas remains in cash. Virtually everywhere accepts it. Some places accept only it, particularly in Asian and African countries. It is a good idea to always have a little cash at the ready, even if only for emergencies and tipping. But keep it secured in a safe place: Travel insurance often has a low limit of what it will cover after thefts. For the best exchange rate, avoid the bureaus de change inside the airport.
2 DEBIT CARDS
Forex Bank at Copenhagen Central Station.Credit: iStock
The card you use every day at home can quickly become a tainted proposition overseas, as most banks will hit you with so many fees – withdrawal fee, cash conversion fee, exchange at the horrible bank rate that siphons cents off every dollar – that you're never entirely sure how much you're actually taking out. So try to use in-network ATMS, as some banks have overseas sister banks that will save you at least one fee. Then withdraw large sums as infrequently as possible, and use the card in stores in lieu of cash.
3 PREPAID TRAVEL MONEY CARDS
An alternative to regular debit cards, prepaid travel money cards charge an initial loading fee, then lock your Australian dollars in as a foreign currency at that day's exchange rate. Given how volatile the financial markets are these days, that can translate to savings down the line. At least, that is how the cards are marketed. In reality, the exchange rate offered by these travel money cards is often much worse than what you'd be charged using your regular debit card. Then "small" withdrawal and loading charges are added to that giant hidden fee. Don't assume that the prepaid travel money option is better value, regardless of what banks tell you.
A Western Union sign in Sevastopol, Crimea, Ukraine. Credit: iStock
4 CREDIT CARDS
There are nearly endless variables to consider when you're choosing which credit card to add to the travel wallet. Some important ones might include: Does it offer you frequent flyer miles? Does it offer complementary travel or car rental insurance, and if so, what are the limitations listed in the fine print? One people often overlook is: Will my card even be accepted where I'm going? American Express is often risky, and don't be fooled by the seemingly universal MasterCard and Visa logos. Not everywhere in African countries will accept both, for example, and many places in Berlin will accept neither, preferring cash.
5 28 DEGREES PLATINUM MASTERCARD
One credit card worth singling out for special attention has been the go-to for many professional travellers since it launched several years ago. The 28 Degrees Platinum MasterCard looks like any other piece of plastic, except for one important difference: no currency conversion fees. Over time, that small saving can add up to big dollars, which makes this card a smart investment – even with that recently added, deeply annoying 3 per cent cash advance fee and online payment charge. It is still pretty good for frequent travellers.
6 TRAVELLERS CHEQUES
In an age of ubiquitous ATMs, do travellers cheques even still exist? The answer is yes, though barely. Truthfully, it's unlikely you'll use this option unless you're going somewhere particularly dangerous: the cheques can be easily replaced and used only by yourself, unlike credit cards, where a signature is easy to forge. Maybe you'll carry some in case of an emergency, but don't make this your primary method of carrying money.
7 PAYPAL
PayPal is not a viable replacement for most other forms of carrying money, unless you apply for a PayPal debit card. However, it remains a useful, secure way to transfer funds overseas if you are, for example, paying somebody directly for a holiday sublet.
8 MONEYGRAM OR WESTERN UNION
You're in a foreign country, you've just been mugged, and you have no cash or credit cards left. Other than freak out, what do you do? This is where services like MoneyGram and Western Union remain useful. A sender pays out and is given a reference number; after about 10minutes, a receiver can then go and give the reference number and personal identification to retrieve the funds. Crisis averted – for a cost, though. Take a deep breath before you look at the fees.
9 OFX
Any traveller who has gone overseas for long enough to warrant opening a foreign bank account – a young person on a British working holiday, for example – must confront the annoying predicament of how to shuffle large amounts of cash overseas without sacrificing huge portions of it to avaricious banks. The best solution is OFX (previously known as OzForex). After verifying accounts in Australia and overseas using a straightforward process, customers can then send money with startling efficiency at a rate that isn't highway robbery. The more you send, the better the rate.
10 APPS
Over the past few years, several smartphone apps have appeared which expedite cash transfers between friends: Google Wallet, Square Cash, Venmo. As it stands, most of these apps are still restricted to use by US residents, though that will surely change in the near future. While it's unlikely they'll ever replace other forms of travelling with money, they are a good way to immediately settle small debts: paying back the friend who picked up the whole dinner bill in Hong Kong, for example.
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