Paying for things overseas

Twenty-five years ago, when I first travelled overseas, there were really only two ways to take money overseas: traveller cheques and cash. 

Travellers cheques were a pain in the arse. You had to get them. Keep them safe. Find a place to exchange them. All the time checking the exchange rate and commission or fees. 

Cash was worse. If you're travelling for a length of time, and I initially went for 8 months, you need a lot of money. But it's just not safe to hold onto that amount of cash. When I travelled to Europe all those years ago, every country had different currencies. So you were always looking for places to exchange cash and travellers cheques and comparing rates. 

So now in the era of credit cards and electronic purchases, how am I paying for things? There's actually two parts – paying for things from Australia and paying for things actually in the country. 

I use AirBnB, like millions of others. What I love about AirBnB is you are given the price in your currency and the funds are taken out of your designated CC account at the time of booking. So no worries about fluctuating rates. No hidden bank fees. And all is paid before you travel. 

But what about those things I have to pay for in Europe? I am a CC Queen and use them for most purchases but nearly always pay them off in full each month before they accrue any interest.

I have two cards. One is really a debit card. It works as a Visa card but I have to have money in my savings account from where the card draws. The other is an American Express card. I use them both for ease and the Amex for rewards. I use payWave and eftpos, rarely carrying cash. 

Now I don't think that is going to be the way to go. Firstly AmEx charges heaps of steep fees for use overseas – at ATMs and point of sale. I know because I was hit in London, New Zealand and Japan. 

Our Visa cards (Mr S has the same card with the same mutual bank) were not as bad but at shops only worked on credit, not eftpos which caught us out a couple of times. There's that moment at the register when your card is declined that you worry. Then you remember you can only use one way. Which way is it? You fluster and get more uncertain. As fees go, the Visa wasn't too bad at vendors but we were slugged at ATMs. Of course you need to get access to cash too. 

So what's the best approach?

I like to have foreign cash before I leave Australia. Means I don't have to worry about it on arrival. I get some from Travelex before I leave. The exchange has always been good. And I pay by direct deposit so pay fewer fees. 

For getting cash while in the country, I usually just use ATMs. I'm not sure if they (the insitutition that operates the cards) give the best exchange rate. You are definitely charged fees by the ATM operator and often your own bank too. But I like the convenience of ATMs. 

I have been told, and limited research suggests, that the Citibank card is great for travelling. It has no or limited charges. And quite good exchange rates, making it good for paying directly to vendors, either in person or before we travel. 

So I have applied for one of these accounts and cards. 

It will be the main card that I will use to get cash from ATMs and pay vendors. 

I will let you know after the trip what the fees are. 

I'm not very good with exchange rates. I don't stress about them and I can't be bothered doing exact calculations. You really get little choice or variations anyway and you need to buy things. But as we will also use the Visa and AmEx, I will be able to let you know the difference exchange rates applied after our trip. 

What do you use when travelling overseas? What have you found works best?

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8 thoughts on “Paying for things overseas

  1. While it is not necessarily safe, I admit to loading up on cash before I leave Canada. I use my own bank. My debit cards don’t work in the UK and my cc charges 2.5% of the purchase price in currency exchange fees. In the UK I exchanged pounds for Euros and vice versa at the post office which I felt had fair rates. I do like it when I book places to stay, train fares and the like, and the website gives the Canadian price. Otherwise I just try to keep costs down generally rather than obsessing over exchange rates. I have to accept that a lunch that would cost $12 in Canada will cost 12 pounds in Sussex ($20) – nothing to do with exchange rates but with the cost of living there. Of course I have never travelled internationally for more than 2 weeks!! So for long trips, I would probably try to save on the big costs and eat the cc currency fees. What a nice problem to have 🙂

    • Yes, it is a lovely problem. When I went to China and Japan, both for around 12 days, I took cash. But then my accommodation I mainly put in cards so I could be reimbursed by work. I agree with you about keeping costs down rather than obsessing with exchange rates, though I do want to minimise the bank fees by repeated use for small purchases. We are in such a habit here of payWave for under $100, I hardly ever have ask on me anymore.

      I found meals so expensive in London too. I just had to think of the pound as our dollar. As in your example, I’d just think it was $12 not £12, and as our dollar is weaker than yours it is closer to $22 for us. But I’d still tell myself $12, cause I’m not going to not eat and I may as well enjoy my occasional trip, rather to than stress over a few dollars.

  2. We have always used the Nationwide (our bank) as we are long standing customers we get free travel insurance with them and a good exchange rate and no fees. I think there are cards here now that don’t charge generally called travel credit cards run by some banks but it is a while since we went abroad I just overhear things in conversation at work at this time of year.
    London is very expensive even for us.

  3. Oh Lucinda! I never travelled solo with traveller’s cheques, but my parents had them as a child on some trips.

    My most recent trip I withdrew cash at the airport in Iceland (around $400 for six nights) and used it for food mainly. All tours were paid already, and I thought I’d paid all accom, but hadn’t, and so put that on a card. In mainland Europe, I used my card a ton more…

    In the past, I’ve used the GE Money 28 Degrees Credit card, which used to allow you to ‘forward’ load the credit card, and previously, withdraw cash at no extra fee. That’s changed. It’s not my ‘usual’ credit card, so I always have to relearn the PIN etc.

    I also, in the past, have travelled Europe with my French BNParibas account (all Euro accounts are like we have now in Australia, debit cards with credit functions). Again, I have to plan an international transfer at a $25 fee, and then I have to remember the PIN. Of late, that’s been too hard.

    Overall, the only place my ATM withdrawal method has been tricky is in Japan, where only the ATMS in 7 Eleven worked. Thankfully they are everywhere, so that really helped.

    I don’t generally use a credit card overseas, much like at home. I do use credit card for larger purchases, like more than $100.

  4. We took a bunch of cash (via Travelex) and a few debit cards with us on our last trip. I got the Citibank card/account specifically for the trip. You have to be a little careful that you get the correct one, as they have two similar ones and one is best for travel.

    It was a bit of a pain getting the card as there isn’t a branch near us, so I verified my ID online. After a few weeks I hadn’t heard anything, so got in touch and was told that I needed to verify my ID at Australia Post. Not a huge deal, but I’m glad I kept on top of it – they could have at least sent me an email or letter to say that the online verification wasn’t enough.

    In the end we were very happy with it, the ease of use, the exchange rates, etc. We also took some back up cards in case one was declined. From memory ING and ME Bank have cards which are decent for travel, but the Citibank one seemed to give the best deal at the time.

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