Both financially and for security, it pays to have options available for making purchases when exploring overseas.
What is the best way to pay for your overseas train tickets or hire car without incurring fees and charges?
Most Australian credit cards charge a transaction fee of about 3 per cent for purchases in a foreign currency, and there can be a withdrawal fee as well.
There are cards that can be loaded with foreign currencies before you travel and topped up as you go.
The exchange rate on these cards is often about 5 per cent below the official exchange rate on the date of purchase. For example, if you are getting US dollars, the official rate may be 71.1 US cents but the travel card rate could be 68.2 US cents.
There is usually also a transaction fee of a few dollars for each withdrawal made overseas.
Exchange rates are constantly changing and these cards do lock in a rate. If, by the time you travel, the Australian dollar has fallen or the US dollar has risen, you could end up in front.
There are a few cards that do not charge transaction fees and the exchange rate at the time of purchase is the Visa or Mastercard rate, which is very close to the official exchange rate. I use one of them, a 28 Degrees Mastercard, for purchases.
Because 28 Degrees charges for withdrawing cash, I use a Citibank debit Mastercard at overseas ATMs. The rate of exchange is at the Mastercard rate. There can be a withdrawal fee charged by the bank whose ATM you are using.
I shop around until I find a bank that does not charge.
On a recent trip to Spain and Portugal, I used Deutsche Bank ATMs.
Since my wife had her bag snatched in Barcelona and I had an ATM in the same city fail to return my card, I try to withdraw cash only during business hours at an ATM in a bank or foyer.
If something goes wrong, you have immediate redress.
We also have a back-up. We each carry our own 28 Degrees and Citibank cards in case one of us loses a card.
After the bag snatch, we invested in security bags, where the zips can be secured and the straps are reinforced with steel wire.
I love my man bag, which has room for my passport, wallet, important documents plus an umbrella and rain jacket.