Travel money looks like one decision made at a currency counter. It is really three, made at different times, and only the first is made in advance with anything like full information.
Before leaving, the question is what a card does abroad rather than how much cash to carry. Cards differ in what they charge for a foreign transaction and for an overseas cash withdrawal, and a prepaid travel card is a third structure again with its own loading, withdrawal, inactivity and closing charges. The ACCC’s consumer guidance is blunt that these can add up: fees connected with travel money cards, it notes, can sometimes make them more expensive than other services, and it points out that an ordinary debit or credit card can work out cheaper.
At the terminal, someone else makes the decision unless the traveller stops it. Card machines and overseas ATMs frequently offer to bill in Australian dollars instead of the local currency. Accepting hands the conversion to the merchant’s or operator’s provider, at a rate it chooses, and the ACCC states the consequence plainly: choosing to pay in Australian dollars may be the more expensive option. The offer looks like a convenience and is a pricing decision.
On returning, a balance left on a prepaid card is still in a foreign currency, and converting it back crosses a spread a second time on money that was never spent. Loading, withdrawing, sitting idle and unloading are four separate charging events, and a method can be cheap at one of them and expensive at another.
The exchange rate is the part of this that is common to every method. What differs between one method and another is the set of charges applied at those three moments, and two of the three arrive with no time to consider them.
