Nine money tips for school holidays abroad


Aussies have taken to travel this year in record numbers, with the Australian Bureau of Statistics reporting in June total departures of 1,556,710 - an annual increase of 675,850.

With spring school holidays fast approaching, we expect to see even more people headed overseas. Planning ahead when it comes to your finances will ensure you get the most bang for your buck when it comes to foreign currency, which in turn will help you stay on budget.

Consider these tips before you jet off.

money tips school holidays overseas

1. Have a plan

Make sure you notify your bank of your travel plans before you depart, specifying each country you're travelling to or passing through, to ensure your cards don't get flagged or blocked for out of the ordinary transactions.

2. Withdrawing cash  

When using a local ATM to take out money, make sure it's one that's in your bank's network, otherwise you could be charged a substantially higher transaction fee. If you are a customer of an international bank, you might be able to use their ATMS abroad fee free.

You can minimise fees and charges by having a multi-currency bank account, making sure you have the local currency in your account.

3. If you have the option, pay in local currency

If you're given the option of paying in either your home currency or the local currency when using a debit or credit card, the exchange rate is usually more favourable in the local currency.

4. Read your credit card terms closely to avoid extra fees

Credit card points are really tempting but you must consider if they are worth the fees and charges. They offer convenience when you travel, especially for settling large bills, but the card companies rarely offer the best foreign exchange rates. Conversion fees can also be pricey, often a fixed fee plus percentage of the transaction.

However, lots of cards have very generous perks - lounge access, rewards points and bonus point, built in travel insurance and many other features.

Balance these aspects against each other when reviewing your payment options.

5. Choose the right payment for your destination

If you're going to a popular tourist destination like New York, Tokyo, or Paris, you can assume ATMs are accessible, and credit cards are readily accepted at most retailers. If you're going off the beaten track, some remote destinations might be a cash-only economy.

Do your research and make sure you have considered how to split your budget between cards and cash. Also consider the tipping culture of your destination, as that will affect how much you'll need in physical notes.

6. Avoid weekends when exchanging your money

You'll get the best rates when you exchange currency during the week.

On the weekends, share markets around the world are closed. Since banks or foreign currency exchanges don't know what the new rate will be on Monday morning, they charge a slightly higher rate to protect themselves against unforeseen market movements when the market re-opens.

7. Check for any hidden fees

Many foreign currency exchanges will give you a great rate tied to commission or transaction fees. That good rate might only be applicable to notes of a certain denomination or year. If they ask you to convert a certain amount to get that rate, this could be their way of adding fees to your exchange. It all adds up.

8. Choose a larger and reputable foreign currency exchange

Smaller foreign currency exchanges will often have fewer notes in stock, so you'll be charged a premium for exchanging your money. Choosing a reputable brand for your FX needs will also give you the security that you won't get shortchanged.

Sure, you might have to wait longer in the queue to change your money, but a busier shop will usually be a safer option. You can also request foreign currency from most banks in Australia, see if your bank is able to offer you a deal on fees as a customer.

9. Use up all your small foreign currency coins and notes

As best you can, try and use up your foreign currency coins and small notes before returning home, as it's rare to find foreign currency exchanges that accept coins. The airport gift shop is a good last place to get rid of those small coins and notes.

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Jessica Power is the head of wealth and personal banking for Australia at HSBC. She joined HSBC in 2018 from Westpac, where she held several senior retail positions. Prior to that, she worked for Citigroup Australia. Jessica has a Bachelor of Economics, Finance and Marketing from Macquarie University, and a Master of Applied Finance from Securities Institute Australia.