Five money tips for travelling overseas

Five money tips for travelling overseas

While it is possible to see the world on a shoestring budget, there are several ways that an otherwise perfect overseas holiday can be derailed by money problems, from losing access to your funds, to being charged more than you expected to access your accounts. 

Here are a few simple tips that are worth keeping in mind when planning your next international adventure:

Tell the bank where you’re going

Unless you’re a freewheeling nomad who constantly drifts from one continent to the next, overseas travel requires a bit of planning in advance. One small but important step when organising your overseas travel is to let your bank know the dates you’ll be overseas, and which countries you’ll be visiting.

Usually all it takes is a short and simple phone call – a bit of a hassle to be sure, but one that can make a big difference between being able to make full use of you debit and credit cards, and finding yourself locked out of your own accounts, having to make tricky international phone calls to put things back in order. 

And if your find yourself making spontaneous changes to your travel itinerary – say, popping across a border for the weekend – it may be worth contacting your bank to let them know, just in case. 

Watch out for fees

Using your cards to access your money overseas often involves paying a variety of fees for the privilege. For example, when getting money out from an overseas ATM, you may be charged:

  • A fee from the local ATM provider
  • An ATM withdrawal fee from your own bank
  • A currency conversion fee from your bank
  • An international transaction fee from your bank

This is all in addition to possible finding yourself worse off due to international exchange rates, depending on what country you’re visiting. 

If you expect to be using a lot of cash while overseas, consider using a card with minimal overseas fees and charges, and make your ATM visits strategically, to avoid being charged too many of these fees.

For example, rather than making multiple trips to the ATM and withdrawing small amounts of money as you need it, you could withdraw a large amount of money in one ATM transaction, then split this total up between your travelling companions and/or divide it up between your wallet, pockets, bags and hotel room so there’s always some cash available in case of emergency.

Use local currency

Sometimes when shopping overseas, the shopkeeper will offer to let you pay for your purchases in Australian dollars, rather than the local currency. While this may be a nice concession on their part, and allow you to get a clear idea of exactly how much you’re spending without having to do a bunch of mental calculations, it could end up ultimately costing you more.

This is because the exchange rate used by the retailer may be more expensive than the rate used by your bank and/or credit card provider. Additionally, even though your bank may not be charging you for currency conversion when you pay in Australian dollars while overseas, you may still be charged fees for making international transactions anyway.

Consider the risks of cash versus cards

Every transaction you make, both at home and overseas, carries some degree of risk, where you could lose your money, your financial details, or even your identity. Different payment methods come with different risks, and it’s worth being aware of all of them.

Paying with cash may seem relatively risk-free in a digital age, as only currency is exchanged cash transactions, with little information changing hands.

However, this can come back to bite some travellers, as not only can cash be physically lost or stolen, but cash transactions can be much harder to trace if you find yourself being ripped off – once you lose your cash, you may never get your money back.

Credit cards have different risks, such as card skimming and other scams, which could potentially see thousands of dollars in fraudulent transactions being run up in your name.

That said, most credit card companies use a range of security and encryption measures to protect your transactions, and can provide replacement cards or access to funds if your cards are lost or stolen. Plus, the digital record of your credit card transactions can be helpful when resolving any disputes.

And if the worst happens and you are a victim of fraud, many card providers offer fraud guarantees, where if you diligently report fraudulent transactions in a timely manner, they can be investigated and reimbursed with relatively little fuss. 

One possible third option is the pre-paid travel money card, which can be used similarly to a credit card, but limits you to only spending money you’ve pre-loaded in advance, instead of providing access to credit. While these cards may not offer quite as much flexibility as some other card options, if your travel money card is lost or stolen, only your pre-paid funds should be at risk, rather than your entire credit limit. 

Check if you’re already insured

Did you know that with right credit card, you may not need to organise travel insurance for your trip? Some credit cards (particularly Gold and Platinum-tier cards) offer complimentary access to travel insurance, provided you book your flight and accommodation using the credit card.

Before making any assumptions, it’s important to contact your credit card provider and check exactly what’s required to receive this complimentary travel insurance, and also to confirm what is and isn’t covered, in case there are any areas where you’d like to get some additional insurance. Also, it’s worth checking what excess you’d need to pay for making a claim, and confirm whether any other fees or charges are involved.

Also, keep in mind that some of these cards offer access to other features that could come in handy while travelling overseas, such as 24-hour access to a concierge service that can help you in booking tickets and planning future adventures. 

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Learn more about credit cards

How to get money from a credit card

You can get money from a credit card, but generally it will cost you.

Withdrawing money from a credit card is called a cash advance, as it operates more as a loan than a simple cash withdrawal. Because it is a loan, you may be charged interest on your cash advance as soon as you make the withdrawal. Interest rates are also usually much higher for cash advances than standard credit card purchases.

In addition to the interest rate, you may also be charged a cash advance fee. This could be a flat rate, or a percentage of your total cash advance. If you are considering a cash advance, make sure to add up how much it will cost you before committing.

What is a credit card?

A credit card is a payment method which lets you pay for goods and services without using your own money. It’s essentially a short-term loan which lets you borrow the bank’s money to pay for things which you can pay back – potentially with interest – at a later date. Credit cards can also be used to withdraw money from an ATM, which is known as a cash advance. Because you’re borrowing money from a bank, credit cards charge you interest on the money you use (unless you repay the entire debt during the interest-free period). When you apply for a credit card, the bank gives you a credit limit which sets the maximum amount you can borrow using your card. Credit cards are one of the most popular methods of payments and can be a convenient way of paying for goods and services in store, online and all around the globe.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

How do credit cards work?

Think of credit cards as a short-term loan where you use the bank’s money to buy something up front and then pay for it later. Unlike a debit card which uses your own money to pay, a credit card essentially borrows the bank’s money to fund the purchase. When you apply for a credit card, the bank assesses your income and assigns you a credit limit based on what you can afford to pay back. At the end of each billing cycle, which is usually monthly, the bank will send you a statement showing the minimum amount you have to pay back, including any interest payable on the balance.

How to get cash with just a credit card number

Banks and merchants usually will not allow you to access cash without a physical card, because doing so would open up opportunities for fraudulent activities. Even most non-cash credit card transactions (such as shopping online) require you to know the expiry date and CVV on your credit card in addition to the card number.

However, some banks offer cardless cash for transaction accounts. Using a secure app installed on your mobile phone, you can log onto an ATM and withdraw the money you need. This could be a practical and secure solution if you don’t have a card and need cash.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.