Foreign currency: how to get the best price before jetting off

As Australians again venture overseas they are being warned to avoid paying a high price for one key mistake.

International travel is firing up and making Australians think about something they haven’t had to for almost two years – buying foreign currencies.

There’s a pile of potential pitfalls that can cost travellers unnecessarily, but currency specialists say there are several ways to avoid being hit hard.

One of the most expensive mistakes made by travellers is buying their currency at the airport, says Wise Australia country manager Tristan Dakin.

“They know you’re in a last-ditch effort to convert money, so inflate their exchange rates and fees,” he says.

Dakin says it’s much cheaper to withdraw money from an ATM at your destination using a multi-currency card, which can also eliminate other fees that sting travellers.

Some people spread currency purchases before a trip to smooth out fluctuations, some use travel cards, while others do fine using their credit and debit cards and cash.

Dakin suggests using online rate alert tools, which allow people to sign up for daily updates or be notified when a currency reaches a certain level.

“Always remember to pay in the local currency of the destination you’re in,” he says.

“For instance, if you’re an Australian resident travelling to Singapore, always choose the ‘pay/withdraw in SGD’ option rather than the AUD option.”

Travellers should beware of claims such as “0 per cent commission” or “zero fees”, says Dakin, because this means the dealer is making their money on the exchange rate, which may be poor.

Wise Australia Country Manager, Tristan Dakin

S Money director Justin Rampono

S Money director Justin Rampono suggests avoiding airport currency exchanges, asking mates about their experiences, and simply requesting a better rate.

“A lot of people aren’t comfortable with it, but if you’re exchanging $2000 and ask for a better rate, a lot of the time you will get it,” he says.

Check prices before buying because rates can vary widely.

“If you live in a major city, head into the CBD,” Rampono says. “The best exchange rates and most competitive money exchanges are in the middle of the city.”

Rampono has mixed feelings about travel cards because “there’s some great ones and some shockers”.

“Whether it’s credit, debit or prepaid, a travel card can be full of currency conversion fees, ATM charges and some have inactivity fees,” he says.

Rampono says sometimes it’s cheaper to exchange money overseas – especially in places with a lot of Aussie tourists such as Koh Samui, Bali, Fiji, Vanuatu and Singapore.