11.2 million Australian residents made trips overseas in 2018-19 which is more than double compared to overseas trips 10 years earlier.
With a record number of Australians heading overseas every year, knowing how to get our hands on the best currency exchange rate is really important. Here are seven tips to consider to try and get the most out of exchanging currencies before departing overseas.
Shop around
For many of us, when we make a large purchase, we understand the potential financial merits of shopping around. When buying foreign currency, it should be no different. Before heading overseas, consider comparing exchange rates across banks, travel agencies, currency exchange stores as well as online providers.
Last month the ACCC highlighted that during 2017-18 consumers that used one of the big four banks to exchange AUD to either US Dollars or British Pounds, could have collectively saved $150 million Australian Dollars if they had gone with a cheaper provider. Rod Sims, chair of the ACCC said: “Shopping around could save Australian consumers hundreds of millions of dollars each year.”
When comparing, we can look beyond the base rate and take into account the total cost of our transaction. Carrying out research on all potential costs and fees involved before purchasing foreign currency can be beneficial. A provider that offers the best exchange rate, could charge us additional commission costs or conversion fees.
Plan ahead
The majority of suppliers fail to disclose their total price upfront, and at times as consumers, it can be difficult for us to compare costs. Planning a few weeks or even a couple of months ahead can allow us more time to research all of the options that are available to us.
Tracking the exchange rate regularly can help determine whether foreign currencies are improving or declining against the Australian Dollar. In addition to this, making sure that we don’t leave buying our currency to the last minute can also help us get our head around what it is going to cost and hopefully get a better rate.
Research options
While tracking exchange rates closely can be difficult and time consuming for the ordinary traveller. Comparing rates online across multiple providers can be relatively easy with the right tools.
Websites such as Finder.com.au and The Currency Shop are good places to start when it comes to trying to compare currency exchange rates with one another. It can be worthwhile checking each provider’s site before making a final decision.
In the event of us needing foreign currency exchanged in the final days leading up to our overseas trip, if delivery is an option, it can be worthwhile checking with the provider that the estimated delivery time falls in with our travel schedule.
Prepaid travel cards
Purchasing foreign currency with a prepaid travel card can provide multiple benefits. A prepaid travel card can enable travellers to fix the exchange rate on the day of purchase. Travel cards can also allow tourists to easily track how much they’re spending and can be topped up online when overseas.
Abhishek Sharma from online currency exchange platform ForeignXchange said “Travel cards are a great way to carry money overseas, travellers don’t have to worry about taking out loads of cash on a day-to-day basis and if you start to run out of spending money whilst you are overseas, you can top-up and reload a prepaid travel card anywhere, at any time.”
Exchanging currency at the airport
Airports right across Australia all have one thing in common. Thousands of travellers passing through every day, with limited options on where to eat, drink, shop or buy currency. This extremely captive audience means that there is limited competition amongst retailers. Leaving a large amount of airport currency exchange providers to get away with relatively weak rates.
A recent inquiry carried out by the ACCC found that exchanging currency at airport locations is, on the whole, more expensive. Buying 200 US Dollars at an airport location in February of this year could have saved the average consumer 40 Australian Dollars (when compared against a non-airport exchange provider).
Buying foreign currency months or even weeks in advance of a trip can enable travellers to get more money for their exchange. Buying travel money online or in the city can often yield a better exchange rate and give us a better chance of getting more spending money before we head overseas.
Customer reviews
Checking out customer reviews and testimonials can be another way to benchmark banks and other providers when it comes to currency exchange services. Tripadvisor, Google reviews and providers own testimonials can be good places to start.
A 2018 report carried out but Sensis showed that 68% of Australians are likely to read online reviews prior to carrying out a purchase decision. Likeminded travellers can assist the decision process by sharing positive or even negative experiences when it comes to exchanging their hard-earned Australian Dollars into foreign cash.
As consumers, we can take a look at the most recent customer feedback which can help gauge what type of service we can expect.
Friends and Family
Finally, talking to our friends about their experiences with exchanging AUD into foreign currencies can be beneficial. They may have had poor experiences with some providers or know where to get the best rates locally. Chances are, speaking with either our colleagues, friends or family members will help to provide us with some indicators or valuable insights based on real-life experiences.
As travellers, we should take into account what suits our needs the best. If it’s convenience we are after, then ordering currency online or purchasing a travel card could be better suited. Or if we like keeping track of how much we are spending or familiarising ourselves with foreign currencies, we can purchase our foreign cash from a physical currency exchange store and get cash in hand before we head overseas.