My complete solution for managing your money while travelling

International travel is booming as people take advantage of slightly reduced fares and the northern hemisphere summer. This, of course, raises the perennial question of the best travel finance to use. Travellers’ cheques are old hat; it’s really a choice between credit cards and debit cards – and you need an armoury of these to cater for whatever may come your way.

First, carry a credit card for the sole purpose of checking in at accommodation. Everybody will want an imprint of the card to pay for “contingencies”, but though they are quick to put money on, they can be slow to take it off.

Getting cash for your overseas travels is still necessary in many countries, but for everything else you can use plastic.Credit: iStock

It’s embarrassing and inconvenient when your credit card is blocked because some hotel has used up your credit limit. Take it from me, fixing this is a matter of days not hours – hence my recommendation of a dedicated credit card. I use American Express for this. I never use it for overseas transactions because of the massive fees; it sits in my wallet purely for check-in purposes.

Next is your choice of debit or credit cards. I’m a big fan of debit cards because you know exactly what you are spending, and you never come home to a large, unexpected credit card bill.

I still recommend carrying a second credit card as a backup in case your debit card is compromised, or you need emergency money. I use Latitude, which has no fees, but hits you with a usurious penalty interest rate of 27.49 per cent if you don’t pay the entire balance on time.

If you intend to withdraw cash from ATMs around the world you should definitely use a debit card. The fees for cash advances on credit cards are huge – for example, Latitude charges 29.99 per cent a year. I haven’t used cash when travelling overseas for years, but friends tell me cash is essential if you are going on trips where you need to tip the guide.

The banks are pushing cards for travellers that lock in a currency rate on their card before you leave home “to guarantee you won’t be hit by adverse exchange rates as you are travelling”. The problem is that the banks hit before you go by charging high commission rates.

Thanks to a reader who travels regularly for business I have discovered what, I think, is the perfect solution: the Wise debit card.

Wise offers an extremely efficient international (or multi-currency) account, offering people the ability to open over 40 different currencies within their account and spend like a local wherever they are, in the local currency every time.

The Wise account offers the option of up to three virtual debit cards instantly within the app, which you can connect to your Apple or Google wallets, so you can easily spend straight away, using your device.

There’s also an option of ordering a physical debit card known as the Wise Card (for a one-off $10 fee) for those more prone to using cash when abroad. Wise also offers fee-free ATM withdrawals up to $A350 equivalent a month.

It uses the mid-market exchange rate, which is essentially the “real” exchange rate – the one the market naturally sets and that you’d see on Google. That means you’re not paying for any exchange rate markups or hidden fees, which is how banks and most other providers make money on FX transactions.

I signed up for my Wise Card from home using the app. It was simple. And I have used it for travel ever since. It’s working seamlessly, and I’m really enjoying the savings on exchange rates. All you do is transfer Australian dollars to your Wise account. Then use the app to convert as much as you wish to the foreign currency you want, at a time ­of your choice.

So that’s my how I do travel finance: one credit card for holds; one credit card for emergencies; and both a virtual and physical Wise debit card holding all the currencies I need.

Noel Whittaker is the author of Wills, Death & Taxes Made Simple and numerous other books on personal finance. Email: [e-mail]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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