Foreign exchange refers to the rate or value of the currency of a country in relation to that of another country. This is often encountered when you go overseas. When you’re in a different country, you will be using its local currency to buy goods and services. But to do this, you might find yourself having to pay certain charges. These foreign transaction fees can be very expensive, as every debit or credit card transaction you make comes with a fee.
The good news is, there are ways to save on foreign exchange fees on vacation, so you can have more money on your travel budget. Here are some tips to save money on foreign exchange:
Every credit card transaction comes with a fee, so use cash instead as much as possible to avoid foreign transaction charges on holiday expenses. Just make sure to contact a foreign exchange company or even your bank before your holiday. If you exchange cash at the airport, you may lose more money through bad exchange rates.
If you think that it is not practical and safe to go on a holiday carrying a lot of cash, you can look for a debit card that offers low fees on overseas ATM withdrawals.
Look for a credit card that is designed for frequent travellers.
If you’re always on an overseas trip and you prefer to use credit cards, look for banks that offer credit cards for frequent travellers. These have low to zero foreign transaction fees. Rewards programs that are associated with travel may also be offered.
Use a prepaid travel money card.
This is how it works: you can load the travel money card with Australian dollars, which can then be converted into the foreign currency that you need. This saves you some cash on conversion charges.
While this still comes with reload fees, the advantage is that the amount you’ve loaded in the card will no longer be subject to changes in the exchange rate. It is also easier to replace a travel money card if you lose it, compared to a credit card which takes some time to be processed.
Saving on foreign exchange enables you to have more travel money. Keep these tips in mind so you can lower, if not completely eliminate, foreign transaction fees and have a more enjoyable and hassle-free holiday.
Do you know other ways on how to save on foreign exchange fees on vacation? Let us know in the comments section below.