Heading overseas on holiday? Getting a great exchange rate will make a big difference to the way you spend on your holiday.

Finding the best currency exchange rates

How exactly do exchange rates work? There are a few things to know to get the most from your Australian dollar when travelling overseas.

What affects the exchange rate?

An exchange rate is the value of one currency in terms of another currency and they can fluctuate for a number of reasons, including:

  •  Balance of payments

  •  Inflation

  •  Interest rates

  •  Political stability and economic performance

Exchange rates can change quickly, so it’s always a good idea to keep an eye on them several weeks before you leave so you know when the rate is in your favour or not.

How can you check the exchange rate?

Travelex provides exchange rates and historical data so you can see how the exchange rates have been tracking over time.

Where Can I buy foreign currency?

You can order your foreign cash through us. The strength of the currency exchange rate at the time you purchase your foreign cash will determine how much spending money you have to take with you. Timing it right could mean the difference between staying in a hotel versus a hostel, expensive dinners out versus cheap meals on the run, or even a flight upgrade.

Buying currency in Australia versus overseas

To buy now or later? This often presents a dilemma but again, it depends on what’s happening in the country you’re visiting and with the exchange rate at the time. If you’d prefer to be fully prepared before you go and not worry about money, convert your currency here by either purchasing foreign cash or locking in the exchange rate by loading money onto a travel money card.

You can also change money overseas, but it’s best to get a small amount of local currency before you go to tide you over.  Be sure to check the advertised exchange rate and ask about fees if you’re changing currency at the airport or at overseas banks.

Conversion fee and transaction fees can apply for withdrawing cash at overseas ATMs –check with your financial institution about cash advance fees if you use a credit card.

If you’re buying things using your debit or credit card you’ll be charged according to the exchange rate at the time you pay. Many people opt to pay in the local currency rather than in Australian dollars because there could be a fee for converting Australian dollars to the local currency at the time of purchase.

Is it better to pay in advance?

If you’re booking your own holiday, you could take advantage of a favourable exchange rate by paying for accommodation and booking in advance with an International Money Transfer (IMT).

International payments are available from the ‘Payments’ tab within Online Banking. Learn more about International money transfers.

Get in touch with Horizon Bank today for all of your foreign currency and travel insurance needs.

Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.

The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.