Do traveller's cheques exist anymore? It's certainly been many years since I've used one - and probably just as long since I've even seen one. And you know what? I kind of miss them!
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The concept was good. You could only cash the cheque if you could prove your identity, so it didn't matter if they were stolen. And if you did lose them, they could be refunded or replaced. It was a reassuring layer of security, particularly on long trips.
I still remember heading off on my first independent trip about 25 years ago with a series of traveller cheques tucked into the money belt I fastidiously kept strapped to my torso. But these days, I would feel like a fool doing that, with so many modern alternatives that come with even more benefits for most travellers.
![It is well worth thinking about your spending options when you jet off. Picture Shutterstock It is well worth thinking about your spending options when you jet off. Picture Shutterstock](/images/transform/v1/crop/frm/9gmjQxX8MpSQh6J68NHMnY/3edf4c73-43b6-4164-a056-8cfe3353ecad.jpg/r0_0_5652_3781_w1200_h678_fmax.jpg)
However, the proliferation of ways to pay overseas has also made it more confusing, with some methods better than others in different scenarios ... not to mention the ridiculously wide range of transaction fees. So, this seems like a good time to take stock and look at what your best options are to access your money when you travel in 2024.
![The proliferation of ways to pay overseas has also made it more confusing. Picture: Shutterstock The proliferation of ways to pay overseas has also made it more confusing. Picture: Shutterstock](/images/transform/v1/crop/frm/9gmjQxX8MpSQh6J68NHMnY/305618b9-9c07-4679-b82f-f7fcf2df03cd.jpg/r0_307_6000_3694_w1200_h678_fmax.jpg)
For the simplest approach, cash is still king. Carrying a stack of local currency means you won't face transaction fees every time you buy something, and you won't have to worry about the payment system not working. Plus, you can keep track of how much you have left (if you're trying to stick to a budget) and not even the most sophisticated scammers can hack a coin or a note to drain your bank account.
One of the problems with cash, though, is an unfavourable conversion rate that means you'll generally pay more than many other methods, even if you shop around (which you should). To show you some comparisons, throughout this article I'll use the example of converting or spending 1000 US dollars.
Using Australian dollars to buy this amount in cash costs $1546 at Travelex in the Sydney CBD, but a whopping $1672 at Sydney Airport (please never do this!). But if you waited until you got to Los Angeles, you could get it for $1458 at one of the main exchange companies.
![For the simplest approach, cash is still king. Picture: Shutterstock For the simplest approach, cash is still king. Picture: Shutterstock](/images/transform/v1/crop/frm/9gmjQxX8MpSQh6J68NHMnY/e48718c8-3fc3-4b2d-9069-30a9d7d7a8e6.jpg/r0_28_2500_1628_w1200_h678_fmax.jpg)
The biggest problem with cash, though, is the security risk of carrying around huge wads of money. It's why prepaid travel money cards have become more popular, where you buy the foreign currency but it's stored on a card, rather than given to you in notes.
They have similar advantages to cash - for example, there's no link to your bank account if someone else got access, and you can't spend more than you've loaded (which keeps you on budget). But the main additional benefit is that you can lock the card if it's lost or stolen.
Travel money cards tend to be more expensive than cash, though. Using the same conversion details as before, the USD on a Commonwealth Bank travel card will cost $1564, while the Australia Post equivalent will cost $1585. You'll also need to pay a $3.50 fee every time you use an ATM, but there's no additional cost for purchases in a currency you've preloaded. You'll get a bad exchange rate if you try to convert any leftover back to Australian dollars, but this is certainly a decent option for the average traveller.
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So, what about just using your standard credit card or bank debit card? We've long been told that doing this incurs high fees... and, to some extent that's true. Normally the fee is about 3 per cent of the transaction, which sounds like a lot. But what people sometimes don't realise is that the currency conversion will be at the basic rate set by Visa or Mastercard (or whichever network you use), which is much more generous than the one used by a travel card. The cost to spend 1000 US dollars on your normal credit card will be $1549, cheaper than the prepaid options and similar to buying cash before you depart. (There is usually an extra fee for withdrawing money from an ATM, though.)
If you're doing just one short overseas trip a year, one of these approaches will probably suit you. But for regular travellers, I would recommend getting a special credit card designed for international currencies. Banks like HSBC and Macquarie have debit cards with no fees for foreign transactions or ATM withdrawals. Using one of them, the cost for those US dollars would be $1504, certainly the best value and security of all the options so far.
If you would prefer a credit card over debit (a higher limit is useful for emergencies), Latitude Finance has the popular 28° Global card with no fees for international purchases, getting you the same value as the previously mentioned bank cards.
The final option worth mentioning is an online bank like Wise or Revolut, which allows you to maintain multiple accounts with different currencies, all accessed by a single debit card. I would only recommend this approach to someone who is already dealing with foreign currencies regularly (perhaps being paid by an international company, for instance) because the main advantage is that you can, for example, receive euros then spend euros without paying a cent in fees.
Ultimately all this advice is general and you'll need to check the details for your own situation. But don't just assume the way you've previously accessed your money is the best. Just like with traveller's cheques, the financial world continues to innovate and there's always a new deal with its own pros and cons.
- You can see more on Michael's Time Travel Turtle website.