Is it time to plan your next holiday?

When planning an overseas trip, how much thought do you put into spending money and what form that money will take? These days, there are a variety of options available.

  • 5 November 2018

    When planning an overseas trip, how much thought do you put into spending money and what form that money will take? These days, there are a variety of options available.

    Consider your destination, your needs and shopping habits to decide what will work best for you. Do your homework before you leave and enjoy a worry-free trip.

    A man and woman knee deep in water, walking out to boat with their luggage in tow

    Cash

    Travellers often choose to convert some or all of their money into the currency of their destination country.

    Pros
    • Purchase cash in advance to access favourable exchange rates.
    • Cash is accepted as payment almost anywhere.
    • Budgeting is easy.
    Cons
    • Difficult to estimate how much you’ll need.
    • Impossible to make online bookings.
    • Lost or stolen cash is rarely replaced.

    Cards

    Cards are arguably the most common option, though you might consider whether a debit card or credit card is best for you. Let’s look at both.

    Credit card

    Using a credit card means using borrowed money.

    Pros
    • Easy to track expenses.
    • Protection from unauthorised spending if the card is lost or stolen.
    • Accepted almost anywhere.
    • Purchases made in any currency; the card company does the conversion for you.
    • Some card companies offer travel insurance deals.
    Cons
    • Some remote locations won’t accept credit cards.
    • ATM withdrawal fees usually apply.
    • Cash advances may attract additional fees or higher interest rates.
    • Discipline is needed to avoid overspending.
    • Interest may apply if you do not pay the full card balance off straight away.

    Debit card

    With a debit card, you’re using your own money. This is wise if you’re worried about getting yourself into credit strife.

    Pros
    • Easy to track expenses.
    • Access cash via ATMs
    • Take advantage of favourable exchange rates.
    • Accepted almost anywhere.
    • Cards can be blocked or cancelled if lost or stolen.
    Cons
    • Many are linked to savings accounts so budgeting may be difficult.
    • ATM withdrawal fees may apply.
    • Account fees may apply.
    • Some remote locations won’t accept cards.

    Travel debit card

    Travel debit cards, are cards issued specifically for travellers. They operate similarly to a normal debit card in that you’re using your own money with a few variations.

    Pros
    • Easy to track expenses.
    • Access cash via ATMs.
    • Many allow up to 10 currencies.
    • Take advantage of favourable exchange rates.
    • Accepted almost anywhere.
    • Some offer SMS alerts for low funds.
    • Cards can be blocked or cancelled if lost or stolen.
    Cons
    • Cards must be ‘loaded’ with currency in advance.
    • ATM withdrawal fees usually apply.
    • Some remote locations won’t accept cards.
    • Cards have expiry dates, so cash remaining after expiry may be lost.
    • Loading lag time means you need to plan ahead.

    Travellers' cheques

    Though not as common these days, travellers’ cheques are still a viable option.

    Pros
    • Purchase ahead of time to lock in favourable exchange rates.
    • Easily replaced if lost or stolen.
    Cons
    • Difficult to estimate how much you’ll need.
    • Not accepted in some stores.
    • Cannot be used online.
    • Difficulty tracking expenses.
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