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How to make sure your money goes further overseas

9News.com.au logo9News.com.au 11/10/2018 Ashleigh Sculley

When you’re planning an overseas trip, you’ll try to find the cheapest flight, you’ll grab a bargain with accommodation – but what about accessing your spending money?

“Every time Australians go overseas, they’re basically gouged by the banks,” Nine finance editor Ross Greenwood said.

A Current Affair compared the best travel cards, debit cards and credit cards as well as where you should exchange your money.

As an experiment, reporter Lauren Golman travelled to three common money exchange locations, changing $200 from Australian to US currency.

At Travelex, she received $137.02, at the Post Office, $133.90 and at the Commonwealth Bank, $134.66.

That’s three different exchange rates, from three different outlets, all within an hour.

a man walking on a beach: Australians can take advantage of a number of tips to extend their spending money overseas. © Provided by Nine Digital Pty Ltd Australians can take advantage of a number of tips to extend their spending money overseas.

“The truth is that the banks for decades have simply made phenomenal amounts of money out of individuals travelling overseas,” Greenwood said.

He said there were two basic ways we’re being stung by the banks when transferring money.

“One of those is basically a straight out fee, so in many cases that would be $15 every transaction," he said.

"The second thing is that they hit them with the spread, in other words, let’s say for example the Australian dollar is at 71 US cents, they may only give you 66 US cents.”

In layman’s terms, the difference is a profit to the bank and money out of our pockets.

“In some ways you’re crazy if you go with the traditional banks just to change your money” Greenwood said.

“There’s businesses like OFX or Transfer Wise that will give you a better rate.”

Cards are another matter.

a man wearing a suit and tie smiling at the camera: Nine finance editor Ross Greenwood said Australians were © Provided by Nine Digital Pty Ltd Nine finance editor Ross Greenwood said Australians were

“When you’re travelling overseas, make sure that you get the right card, so don’t pay too much in fees, make sure it’s the right currency for you if you’re taking a preloaded currency card” Canstar's Steven Mickenbecker said.

He rated ANZ's travel card, HSBC's everyday global account card, the Qantas Cash card and the Travelex money card as five stars each.

“A travel money card is actually preloaded with the currency that you intend to use, now that's great for a couple of reasons but the main reason is you can pre-plan, you know exactly what you're paying for whatever you're buying, it’s great for budgeting, great for control,” he said.

When it comes to choosing a debit card to travel with, our experts say we should consider ING’s Orange everyday card. It has zero-dollar transaction fees and an ATM fee rebate.

NAB's classic banking has a zero-dollar transaction fee on international purchases and complimentary travel insurance.

HSBC's everyday global account card has no foreign ATM, transaction fees or monthly account fees.

a sign on the side of a building: Banks will offer different amounts no matter the exchange rate. © Provided by Nine Digital Pty Ltd Banks will offer different amounts no matter the exchange rate.

However, Mr Mickenbicker warned that a regular credit card or debit card might not be purpose built for travel which could mean, “the fees are quite high, foreign ATM fees, fees for currency conversion, they might be a lot higher than a card that is actually purpose built".

If you're after a credit card to take away with you, Bankwest's zero platinum Mastercard has no annual fee, no transaction fees and no overseas ATM withdrawal fees. You'll also get free travel insurance.

The 28 Degrees Platinum Mastercard is also a good option with no annual fee, no foreign transaction fees and no ATM fees.

You may also want to look at ANZ's Rewards Travel Adventures Card. It has a $225 annual fee, no foreign transaction fees, $5 overseas ATM withdrawal fee and an overseas cash advance fee of zero dollars.

“I think what a lot of people get caught on is the hidden fees if you want to call it that, it's in the T's and C's (terms and conditions) which get people caught on and obviously can make your holiday a lot more expensive,” World First foreign exchange expert Patrick Liddy said.

a large passenger jet flying through a blue sky: An inquiry into foreign exchange fees has been launched. © Provided by Nine Digital Pty Ltd An inquiry into foreign exchange fees has been launched.

It's not just those travelling the globe who are forking out money to spend their own. Families sending money overseas are also feeling ripped off.

A government-commissioned inquiry into foreign exchange fees has launched.

The ACCC is concerned with what is being charged to consumers and whether or not there's enough transparency in what's being charged and whether consumers are getting a fair deal,” Mr Liddy said.

He also said travellers needed to consider smaller providers and ask more questions.

“If you look at some of the smaller banks, like Ubank and ING, they've recently scrapped some of their international transfer fees and withdrawal fees," he said.

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