2017-04-19

The cheapest places to get foreign currency for your holiday

The cheapest places to get foreign currency for your holiday

MARCH 13 2016
The cheapest places to get foreign currency for your holiday
Nicole Pedersen-McKinnon

As much as it hurts our exporters when the Aussie dollar spikes, somehow it makes the rest of us feel a bit richer (similar to when house prices surge, even though you can't get at the money unless you sell).

But it's true for those planning an overseas jaunt this coming holiday.You can now hit the slopes with a bit more cash in your pocket. Photo: Amriphoto

Theoretically, just one week added 3 per cent to the US currency you can get, as our dollar hit a year-to-date high approaching US75c. It's pulled back a little now.

But what is the reality of pocketing extra money for your adventure? I commissioned data house mozo.com.au to exclusively analyse where you can best cash in, quite literally, on the recent dollar strength.
Travelling to the US

We've looked at how much of four popular currencies you get, after all fees, when you exchange $1000 online.

When it comes to greenbacks, Travel Money Oz is cheapest, giving you $US725. Travelex/HSBC and American Express are quite a few dollars behind with $US719.70 and $US719.60, respectively. Australia Post is next best with $US718.
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The mid-market US/AUS rate the moment we took the snapshot was $US0.742. So Travel Money Oz's best net cash rate of $US0.725 gives you an indication of the profit margin in currency exchange.

Travelling to Europe

Travelex/HSBC comes out on top here, with €647.20. But Amex is only a whisker less (€647.10). Here, Travel Money Oz is a couple of bucks below (€645.30).

The market rate was €0.673 at the time.
Travelling to the UK

Travelex/HSBC again trumps; it will exchange $1000 for almost exactly half the pounds: £499.90. Remember when we used to get far less? But again there's almost nothing separating it from Amex (£499.80), and Travel Money Oz and Australia Post are not far behind (£497.80).

Interestingly, Australia Post always used to be the most competitive place to get currency but specialists have significantly overtaken them on some currencies, although perhaps not this one.

The official rate was £0.52139
Travelling to Japan

Finally, Travelex/HSBC also comes out on top for Yen, with ¥80855. That compares with a money market rate of ¥83.870.

Amex ranks second (¥80830), while NAB is a surprise next place (¥80095).

And check out Travel Money Oz, which is in third last place for yen (¥78307).
Other tips and tricks

Overall, though, when it comes to foreign currency cash, we've learnt the banks are not very good. Stop press! The notable exception is HSBC, which offers Travelex rates in branches.

In all cases, virtual beats actual – order cash in-store and you will pay more than the rates quoted above. And be sure to pay by BPay to avoid an online credit/debit card fee of an average 0.89 per cent.

What about pre-paid travel cards?

They'll generally be more expensive than cash pre-purchased online from a travel money specialist, as above. The culprits are fairly high fees, exchange rate mark-ups, initial load fees, reload fees and even sneaky charges to recover leftover money after your holiday.

The risk with cash, of course, is theft or loss.

For that reason a competitive travel card is a decent PIN-protected safety option for spend beyond the currency you want to carry. It also makes sense to take a credit card designed for overseas use, like the BankWest Zero Platinum Mastercard with no foreign currency conversion fees (and no annual fee), as opposed to the typical 3 per cent regular cards charge.

A mix of money sources means if the ATM machine is down or an outlet won't accept cards, you'll still be able to pay and partake.

Forget travellers' cheques though. Travel cards, which are cheaper and can be used almost anywhere that accepts Visa or MasterCard, loaded with multiple currencies and reloaded if you're running out of dosh, have rendered these obsolete.

But cash is king. So plan ahead for the holidays and at least order some from a currency specialist online today, when there is both time to take advantage and a comparatively good exchange rate.

Nicole Pedersen-McKinnon is a commentator and educator who delivers Smart Money Start, fun financial literacy, in high schools around Australia. www.themoneymentorway.com

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