Five easy ways to exchange foreign currency

Exchanging money remains one of the necessary evils of international travel – even if you use your credit card for most purchases, you’ll often still need cash for smaller transactions such as taxi fares and payments for visas on arrival or airport taxes on departure in certain countries.

But there’s more than one way to get your hands on foreign currency, and by choosing one method over another, a frequent traveller could potentially save hundreds of dollars a year in fees. Here’s how it’s done.

1. Order online with Travelex, collect at the airport

Although we’ve found that Travelex’s airport kiosks in Australia generally offer poor value on currency exchange, they’re actually among the best if you pre-order your dosh via the Travelex website and pay via BPAY from your bank account.

That waives the normal commission charges and also locks in a more favourable exchange rate than you’d get as a walk-up customer, allowing you to collect your foreign cash at the airport but at a much better overall cost.

Qantas Frequent Flyer members can also earn points when placing that online order with Travelex, but must do so via the Qantas portal which adds a 1% commission charge in return for your points.

Orders with a total value of A$51-$299 fetch one point for every five dollars converted, orders of $300-$999 net one point for every three dollars exchanged and anything between $1,000 and $9,999 comes with one point per dollar – mirroring what you’d earn when using many credit cards.

2. Use your debit or travel money card at an ATM

Provided you can find an ATM that accepts your debit or travel money card, using one to withdraw cash overseas can be much more convenient than ordering money online and wasting precious lounge time queuing at the airport to collect it.

But watch out for the fees – you could be stung for a ~3% foreign currency fee, a fixed withdrawal cost of around A$5 from your local bank and a further charge imposed by the ATM itself, which quickly gets expensive.

To cut down on fees, try to use ATMs within your own bank’s alliance. Westpac, for example, partners with Barclays, Bank of America, BNP Paribas, Deutsche Bank and more to waive the fixed transaction fees at both ends, although still levies that 3% international transaction fee.

Don't walk past that Barclays ATM in London: avoid Westpac's $5 ATM fee here.

Other providers and accounts such as the Citibank Plus Transaction Account come with a Visa Debit card, no monthly account-keeping fees, international ATM withdrawal fees or international transaction fees.

Read more: How to save on overseas ATM fees

3. Take Aussie cash with you and convert it overseas

Another easy way to get your foreign currency is to pack real Aussie dollars in your travel wallet and convert them into a country’s local money on your arrival.

Depending on the country you visit, you may face significantly lower fees than you would in Australia – and can often get a better exchange rate, too.

This method works best for travellers that take off on last-minute bookings, as online currency orders usually need to be placed days in advance and become impossible with this kind of itinerary.

Just be sure you’ll have an opportunity to convert your cash before needing to spend your first dollar, Euro or peso in the country, as you won’t necessarily find a currency exchange booth in every airport’s arrivals hall.

4. Buy American Express travellers cheques

While downgraded in popularity with the advent of travel money cards and ATM alliances, American Express travellers cheques are another way to access your money overseas.

You’ll find them accepted at many hotels, banks and foreign exchange bureaus – either in return for local paper money or as payment for goods and services, and they also come without an expiry date.

Lost or stolen travellers cheques can also be cancelled and replaced with a single phone call, giving them a distinct advantage over carrying a wad of cash.

These are available from a number of Australian banks including ANZ, CBA, NAB and Westpac, at Australia Post and also directly from American Express – shop around for the best overall price as fees and exchange rates can vary.

5. Get a cash advance on your credit card

This isn’t one to keep in your regular repertoire, but if you find yourself stuck without any cash and unable to pay by credit card, you could use that card to obtain cash at an ATM as an absolute last resort.

Bear in mind you’ll likely be stung a fixed or percentage-based ‘cash advance fee’ from your card issuer, and that any interest-free days you’d normally enjoy on your credit card don’t apply to cash advances: you’ll be slogged interest from day one, often at a higher rate than would apply to regular purchases.

Frequent flyer points are also seldom earned on cash advances, so in one withdrawal you’ll turn your fantastic interest-free credit card into a virtual ‘interest machine’ for the bank, and risk being charged interest on all of your purchases – not just the cash advance.

If a credit card cash advance is absolutely unavoidable, repay your total credit card balance in full as soon as you’re able, and confirm with your bank when any interest-free days will again be available to you.

Also read: The best credit cards for international travellers

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Chris C.

Chris is a a former contributor to Executive Traveller.