Cash or card? How to pay your way overseas without getting stung

Spending money in another country can quickly drain your bank account if you don’t do it the right way.

Data from buy now, pay later company Zip shows four out of five Australians plan to travel in 2023, but with the cost of everything rising – from groceries to rent – many people will need to stick to a budget.

Spending money overseas can be an expensive because of card charges, currency exchange fees and a weak dollar.

But while your first instinct may be to get a travel money card, experts told The New Daily it’s good to keep an eye out for other options.

Travel money card

Travel money cards are travel-specific debit cards that you can load up with foreign currencies before travelling.

Canstar financial expert Steve Mickenbecker said the most obvious advantage is that you can lock in a favourable exchange rate for the pre-determined amount of your selected currencies before travelling.

But if you decide to put more money on the card while overseas, or you make an impulse decision to go to a country without having preloaded the local currency onto the card, you’ll be faced with a double exchange rate.

“The exchange rate is horrendous, because it exchanges into US dollars or something [like that], then into Australian dollars … So you get ripped off both times, unfortunately,” Mr Mickenbecker said.

Debit and credit cards

Mickenbecker said credit and debit cards are pretty much interchangeable overseas, as long as they’re accepted.

Unlike Australia, cash is king in many countries such as Japan and Germany, and many countries still haven’t introduced the option to pay with your phone.

Using debit or credit cards can provide more flexibility, as you’re not locking in the amount of money you’re going to spend, or which currency you’re going to use.

But using your everyday cards can become expensive very quickly, thanks to exchange rates and surcharges at the checkout or ATM.

“If you’re using [your everyday] credit card everywhere, you could end up paying hundreds of dollars in currency conversion fees,” Mickenbecker said.

If you look outside of the major banks, you could find cards that will be a lot cheaper to use during your travels, said Uta Mihm, Choice senior money and travel journalist.

“What you need to look for are specific debit [and credit] cards which do not charge an exchange rate fee,” Mihm said.

Credit cards offered by Bendigo Bank and Bankwest offer no foreign exchange fees and no annual fees, although what you gain in savings you could lose in travel insurance coverage, stated Choice.

Both offer debit cards with no foreign exchange fees and no overseas ATM withdrawal fees (although the operator of the foreign ATM may still charge you a fee).


Cash is one of the easiest methods to pay your way overseas without being caught out by surprise hikes in exchange rates – if you convert currencies before your travels.

But carrying around large amounts of cash is a security risk, and if you end up running out and needing to exchange more, you could face “huge” exchange rates, Mickenbecker said.

If travelling in a group, he suggested spreading the cash out among everyone so it’s not all in one pocket or wallet.

The best solution

Mickenbecker said the best route to go when paying overseas is a combination of cash and card.

“Travel with cash in the local currency, and travel with your card; kind of a hybrid model that gives you a fair bit of flexibility,” he said.

No matter what payment method you decide to go with, making sure your money is covered by travel insurance is important.

Even though many cards might automatically come with travel insurance, the level of coverage could vary, or exclusions could apply.

“Don’t just rely on the travel insurance for the card,” Mickenbecker said.

“Frankly, whichever medium that it is, you can lose cash, you can lose a card, you can have your PINs stolen, all sorts of things can happen.

“Tourists are easy marks … Have fun, but don’t let your guard down.”

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