Taking money overseas

Friday, January 11, 2008
Kim Wildman
You've organised your passport and visas, picked up the tickets and packed your bags. So are you ready to head off overseas? Not quite…Whether you are taking off for a quick break or embarking on a round-the-world adventure, you will need to sort out your finances before you board that plane.

Foreign currency
There's nothing worse than your first day in a new country without any local currency. So it's a good idea to exchange a small amount of money when you arrive for taxis, drinks and emergencies. Local currency can often be drawn from cash machines using your debit card or credit card. Just be aware that you will probably incur a handling fee. In general, the best hard currencies to travel with are US dollars and Euros as they are accepted in almost all countries. Be aware that exchange rates continually fluctuate and commissions vary from outlet to outlet, so shop around. Most airports, train stations and big hotels have exchange bureaux but tend to offer the least competitive rates. The best exchange rates are generally at banks.

Travellers cheques
In light of all the new high-tech alternatives, travellers cheques may seem old school but they are still a safe and convenient way to carry money abroad. What's more, they are accepted almost worldwide and can be replaced immediately if they are lost or stolen. You can order travellers cheques from banks and some building societies and travel agents before you go; just shop around for the best commission rates. Cheques are available in various currencies, though US dollars, British pounds or Euros are the easiest to cash. You should always keep a note of the serial numbers and the contact number for the issuer separate from the cheques so that they can be quickly and easily reported and replaced. Also, be aware that some out-of-the-way destinations may not accept travellers cheques, so do your homework.

Credit cards
It is always a good idea to take a credit card — they're useful in emergencies and allow you to pay for expensive items such as flights, accommodation and car hire without carrying huge wads of cash. However, it is worth keeping in mind that you will incur charges for withdrawing cash on your credit card at ATMs. Also, interest rates for cash withdrawals are higher than standard purchases and interest is charged as soon as you withdraw the money from the machine. Purchases on your card will also be subject to currency exchange rates and possibly additional charges, so check with your issuer before you leave.

Black markets
Many countries have flourishing black markets in currency exchange. Changing money on the street, however, is extremely risky. Not only is it illegal but they are run by professional thieves who are adept at swindling unsuspecting tourists. In any case, the rates they offer are rarely better than the banks.

Keep your cash safe
Travellers are easy targets for pickpockets and thieves. Use a money belt to keep large sums of cash and travellers cheques in. Wear this under your clothes, though don't draw attention to it by continually reaching into it. Instead, carry enough money in a small money pouch to cover all incidental daily expenses. The best advice when it comes to taking money overseas is not to put all your eggs in one basket — take a mixture of options such as a credit card, some cash and perhaps some travellers cheques. Make sure you have enough money to cover emergencies and whatever you do, don't keep all your money in the one place!