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It’s always been important to be smart about how you withdraw and spend your money when traveling. Though faced with a long road ahead to economic recovery, this is true now more than ever.

How to be Smart When Spending Money Overseas

Getting the Best Exchange Rate

Money Euro RF

It’s common to exchange your domestic currency for a local alternative, or for internationally accepted currencies such as the USD or GBP if they’re accepted in the destination (for instance many countries outside of the USA will accept USD).

And currency exchange is still important; even though much of the world now operates in a cashless society, there are many countries without the digital infrastructure that still rely on cash. So currency exchange will be essential.

But what’s the smartest way?

There really are a huge range of ways you can exchange currency these days, and being that exchange rates and transfer fees can vary so greatly from one company to another, research is the smartest way to get the best exchange rate AUD to Euro and other currencies too.

Pro tip: Keep in mind that exchange rates change constantly. Even when you’re traveling, it’s a good idea to pay attention to the exchange rate so you’re getting the best value for your money.

The most common ways to exchange currency include:

  • Through a bank (at home before you leave, or in your destination);
  • At an airport (though they add on a very high commission);
  • Through an ATM (may be subject to fees);
  • Specialist money exchanger (though you need to make sure they are legitimate);
  • Travellers checks (outdated but still accepted in some countries – not all);
  • Hotel (some hotels may offer currency exchange at the concierge);

Using tools like online trading platforms to analyse currency price trends and making more informed decisions is the best way to get an idea of what the exchange rate should be.

It doesn’t take too much time to make a quick list of how much you would be charged for exchanging X amount of money and compare them side by side so you have a better understanding, and can make the smartest decision.

Our preferred choice for money exchange is to go through a bank at home before we leave. That way, you’re not hit with paying high commissions at an airport, or stuck with the hassle of foreign ATM’s as soon as you land in a foreign country.

Pay in Local Currency

Money wallet RF

One of the smartest ways to handle your money overseas is to pay for things in the local currency.

This is almost always cheaper than when paying in your own currency, which is often an option nowadays when paying by credit card – many payment systems will give you the option to choose whether you pay (for instance), $100 AUD or $80 USD.

The exchange rate on credit cards is applied through Direct Currency Conversion (DCC) at the point of sale. This allows you to avoid doing currency conversion math, though it also often comes with a very poor exchange rate, as well as other fees.

If a country operates using two systems of currency (i.e. Cambodia accepts the Cambodian riel and the USD), do some research into the best currency to use. There may often be substantial differences in prices depending on the two.

Cuba as an example, has two currencies, and this is considered by many tourists to be one of the most confusing things about the country. As a tourist you’ll likely only be using the CUC (Cuban Convertible Peso), which is on par with the US dollar and was established as a second currency solely for tourists.

Cuba is also a good example of the importance of researching currency exchange rates, as from 2004 to 2020, due to political relations with the US, there was a mandatory 10% tax and a 3% fee on exchanging USD, though not if you exchanged from Pounds, Euros, or Canadian dollars.

What About Pre-Paid Cards?

Credit card booking travel RF

While converting your cash into the local currency at the optimal exchange rate arguably offers the best value for money, pre-paid currency cards are also a good alternative to consider.

These cards allow you to access fixed (though not necessarily optimal) exchange rates while also removing any exchange fees. Typically, you won’t pay any additional interest on your individual transactions through this payment method.

The difference here between a money card and a credit or debit card being that most credit and debit withdrawals feature both an ATM fee and a £1.50 for every transaction, causing you to spend more over the course of your holiday.

Do keep in mind that some cards might actually charge you to purchase the card, load and reload funds, and close the account, so it’s important to check these terms and conditions as well as researching the rates.

And also something to weigh up, “while pre-loaded travel money cards often come with fewer fees, they don’t have the bells and whistles that may come with a credit card such as being able to access reward and frequent flyer programs”.

Be Smart WITH Your Money

Money RF

Being smart with how you spend your money starts with how smart you are handling your money.

Under no circumstances should you change money in the street or pull out large wads of cash in public. This is a great way to get pick pocketed or ripped off – and when it comes to changing money, this is especially true if you’re unfamiliar with the local currency.

Organize the cash in your wallet monopoly style before you leave for the day, with like dominations together so you’re not flashing a wad of cash when looking for the correct change.

While many destinations will have beggars in popular tourist hot-spots, in general,it’s a very bad idea when traveling to give money to people on the street.

Leaving aside the fact that you have to pull out your wallet in public, this is encouraging begging, and once you give to one, you’ll be followed and harassed by others the entire way home (If you want to do good while traveling consider donating to a local charity).

Ultimately, being smart about spending money overseas is all about prior planning and research. Exchange rates are dynamic and constantly change, and the feasibility of digital payment options varies so substantially from country to country.

So with the above concepts in mind, before your next trip do the research to find out what being smart means for YOUR trip in YOUR destination. 

Megan is an Australian Journalist and award-winning travel writer who has been blogging since 2007. Her husband Mike is the American naturalist and wildlife photographer behind Waking Up Wild; an online magazine dedicated to opening your eyes to the wonders of the wild & natural world.

Having visited 50+ countries across all seven continents, Megan’s travels focus on cultural immersion, authentic discovery and incredible journeys. She has a strong passion for ecotourism, and aims to promote responsible travel experiences.


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