When and Where to Change Your Money for Your Overseas Trip

If you are going on an overseas trip, you will need to have funds in the currencies of the countries you are going to visit. Three questions to ask yourself are, first, should you take any cash? Secondly, should you change the cash at home, before you leave or do it overseas, and finally should you use a bank or a specialist exchange to change your money?

Most countries have ATMs and will accept your Australian cards so you may think you do not need to take cash when you go overseas – this would be a big mistake.

The problems can start for you even in the plane across to your holiday destination, especially if you are travelling on a discount carrier. I have often seen Australian’s travelling to Malaysia, get a shock when they realise that the food on the discount carrier has to be paid for in cash, and they thought they would go to the ATM when they get to Kuala Lumpur. Eight hours on an empty stomach and without water is not a great way to start a holiday.

Next, ATMs although available in most countries are not as ubiquitous as they are in Australia. For instance, if you are visiting rural Cambodia, or the mountainous regions of India when the travel guide says “ATM available” it could mean one ATM in a 100-kilometre radius. And yep – you guessed it, that’s the one that hasn’t been working for a month! You can be sure that if you are in a place with no or few ATMs these are also the places where you do not want to be stuck with no cash. Even hotels may have “cash only” signs. I had reason to visit Khartoum many years ago and was shocked that the five-star hotel I had booked into was cash only – no credit cards, no debit cards. I had to change hotels, to fit my rather limited US$ cash resources!

Also, be aware that using an Australian card to withdraw money overseas can be an expensive business. The most I have had to pay for Australian bank charges is $30 for a single transaction when I had to withdraw just $200 dollars in a cash emergency. That’s high, but $5 to $10 per withdrawal is not uncommon. Having established that you should take cash with you, do you take all Australian dollars or should you change some amount before you go. This is a hard one. The common wisdom was that you get a better deal overseas because some Australian exchanges used to charge a commission on top of making on the margin between buy and sell prices. However, the practice of charging commission is reducing.

It is a good idea to have some cash in the foreign currency because you could need it straight away for taxis, tips and transfers from international to domestic terminals and the exchange rates at the airport are likely to be higher than the high street exchange in Australia.

When you are getting cash in overseas currencies, be sure that the physical notes are in good condition. In most Asian, South Asian and African countries you will find it hard to spend crumpled or slightly torn notes.

Money sticking out of a purse

Indonesia, Cambodia, Malaysia, India, Sri Lanka, Maldives and Thailand are all countries where I have experienced this problem first hand. So don’t accept damaged or crumpled notes when you exchange your Australian dollars.

It sometimes comes as a shock, but in some countries, money changers will not accept Australian dollars. The US$ and the Euro may be acceptable, but be sure to check before leaving home.

Perhaps you could sometimes get a better exchange rate in the country that you are visiting than at home but take a few obvious precautions. Go online and check the daily rates from the exchanges in your destination with what is available in Australian before you go. You may not get the exact same rate because it may have changed by the time you arrive, but it will give you a good idea of what is available and whether the stories people tell about cheap rates are a myth.

Secondly, if you are going to exchange, make sure it is a legitimate operation – don’t go into a dark corner with somebody who approached you in the street. There have been many ugly stories of threats, muggings and worse – be careful. Another not uncommon issue is that even when notes are machine counted, sometimes the wrong number of notes are handed over to unsuspecting tourist. Stick to the exchanges in shops and malls that have their license clearly displayed are in the public view.

Whatever amount you decide to change in Australia, you have another choice to make. Should you change your money through a bank or through a specialised exchange? If you are only changing a small amount – a couple of hundred dollars, then it probably doesn’t matter. If it is a larger sum then it can make a significant difference to the rate and service.

Banks have the advantage in terms of ease of access – you will find several banks in every mall and high street, happy to exchange money for you. The specialised exchanges do not have the same branch networks so, in your particular circumstance, it may not be possible to get to a specialised exchange. However, a number of specialists will deliver to you – I don’t know of any bank that will do that.

You may find that for some of the less common currencies, banks don’t carry them and only the specialist exchange can help you. Maldivian Ruffiah, for instance, are difficult to come by, in the bank network and would probably have to be ordered if available, but a couple of specialist exchanges carry Maldivian Ruffiah as a matter of course.

You may also find that for some currencies, the specialist can offer a far better rate than the bank. It is not the bank’s core business and they devote fewer resources to researching the retail exchange rate and certainly managers of individual bank branches seldom have the authority to accept offers on an exchange rate, whilst the specialist exchange is more flexible and can react on a daily, even hourly basis to changes in the market. Anecdotes abound of cases where bank staff travelling overseas will get their foreign currency from the specialist exchange.

It may sound like a lot of effort to get the best rate, but if you have the time and you are exchanging a significant amount, in some cases what you save can equate to the cost of one or even two hotel nights whilst you are overseas. It’s worth the effort to make the right choice in changing your money for your overseas trip.

Australian Over 50s Living & Lifestyle Guide

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