Going overseas? The Cheapest Way to Get Cash and Make Purchases Overseas

As I am about to go on my second trip to the USA this year, I thought some advice on accessing your cash overseas would be helpful to those out there wishing to avoid the hundreds of dollars in fees you can pay. I am not usually one to shamelessly promote a product, but when they are saving me hundreds of dollars in light of no clear reason to do so, I am willing to oblige.

Cliff notes : If you are not interested in the details, just go get yourself a GE Money Clear Advantage MasterCard (I am in no way affiliated with them and I don’t get a cent either way). Please note that since writing this article, the card has been renamed the 28 Degrees mastercard. As discovered by Choice and my trip to the USA in Feb 09, it is the “only credit card with no currency conversion fee and it absorbs the MasterCard charge so the exchange rate you get should be close to the market wholesale rates”. It also has no cash advance fee or annual fee unlike other credit cards. But, as with all providers, daily interest applies to cash advances until you pay your bill (this can be avoided – see below).

When i recently went overseas, I loaded my credit card up with cash before I went so i didnt even have to pay interest on the money taken out. The only fee you pay is that of the ATM you are using. Usually 2-4 dollars in the USA depending on whether or not you are in Vegas. This fee is paid regardless of what method you use if you are using an ATM.

[x] Success
[  ] Fail

For some more details on your other options, read that choice link above. Or see my summary below:

  • Bringing cash – If you buy around $1,000 worth of dollars before you get the airport, you are looking at around 2.5% worth of fees. Should you run out, or forget to do it before you get to the airport like most of us, expect fees between 7 and 11% (on a good day) from the kind folks at Travelex. Then enjoy the fun of keeping $1,000 safe, getting pickpocketed or needing more money at some stage (as you see below – it won’t come cheap).
  • Travellers cheques and DCC – Both come with decent sized fees (2-4% + )and are likely to be accompanied by more fees when you attempt to use them. Plus, they are annoying. Avoid.
  • Prepaid or Cash passport style cards – These are my favourite. Well, my favourite waste of money aimed at seducing the masses (see the google ads hitting you in the face when you search cash overseas – they dont come cheap but you pay for it). By pre-converting dollars onto a card,  “expect exchange rate margins when you load and close the card: these are not specifically disclosed by the providers (always nice), and vary from day to day, fees to load the card: up to 1.1%, or a flat fee of up to $15 (you pay for the right to give them money), ATM withdrawal fees of up to $3.75, An exchange rate conversion fee when you use the card: varies between providers. With Travelex the cost is from 5.95% to 8.45% when the withdrawal is in a currency other than what you loaded to the card.” Also please don’t forget that $23.45 that is left on the card when you get back. Good luck getting that back. If you reload or close the account, further fees apply (up to $10 to close the account).
  • Credit Cards – The friendly folk at your local bank would love you to use their card overseas. With currency conversion fees of 2-3.5% from the major banks (to give you the right to use the exchange rate they choose for you – which i have observed is worse than the rate that the GE Clearadvantage gives me the right to use for nothing). Remember to add to that 3-4.5% an ATM cash withdrawal fee and then interest on the money you are taking out and on your $3,000 holiday, you have kindly donated around $150 to your local bank for giving you the right to access your money overseas.
  • ATM and Debit cards – These used to be great. The secret trick of overseas travel. Until the local bank whacked a massive minimum charge of $20-25 for each ATM withdrawal. Now as much as I love withdrawing 2,500 from an ATM in Vegas (where I would have to pay the greater of $20-25 or 2.5% with most banks), usually I find myself withdrawing more meek amounts. With 5 withdrawals on your trip (plus some lovely 5% fees credit card dinners), you are again up to $150 wasted.
It seems like a very clear choice. I have one. it works. get one if you are going overseas. Or waste some money – whichever you prefer.
I can understand that international travel is something that our generation are lucky to have access to. I can also understand that to ensure there are 37 Travelexes at each major airport in the world, they need to make money, but there is no harm in finding the cheapest deal. For the sake of all those people out there who never think about these things, I hope that this GE card somehow increases competition and reduces prices across the board. Where is Virgin when you need them?

8 thoughts on “Going overseas? The Cheapest Way to Get Cash and Make Purchases Overseas”

  1. A good read. I recently went overseas and checked out my options. My old virgin credit initially did not charge the conversion fee (but that they are history…now NAB owned).

    I personally went for Travelex (I wish i knew of GE then). Bought an AUD card as I went to Israel & Asia. They tried to convince me that I should purchase a USD card so that I could convert my money twice !! I also contacted ANZ (my bank) to compare their travel card (bigger rip-off !). Both refused to provide me details of the spread on FX rates when converting. I had to go with the lesser of two evils.

    I tried to convince my father that he should do the same. He couldn’t understand the logic so ended up wasting at least $500AUD on charges on his AMEX card.

    People have just accepted that they are throwing away “their” money for no reason.
    I am in accounting & finance, perhaps I just think differently…?

    Jason

  2. This is the best bit of info.
    I spent so much time trying to assess the fees associated with accessing money when I went to Europe 01/09 but ended up paying hundreds in fees after being misled by “the bank” into using a credit card.

  3. Hi James,

    I hadn’t heard of the GE card idea until now, and it seems pretty good but there is only one reason that I won’t use this, and it is because I am planning to travel next year but I want todays exchange rate locked in as I believe that the dollar won’t be this high for many years to come. Yes, possibly a gamble but one I am pretty confident on, so the GE card idea won’t work for me as it will use the exchange rate on the day of purchase.

  4. The GE Clear Advantage Card you mentioned is indeed prodived by Wizard. I phoned them and asked them about the currency conversion fee and it is still 100% fee free on this front. It also has no anual fee so it is a no brainer. I’m off to USA in 16 days and they say the card should be sent to me in 10 working days so finders crossed.

    Thanks for the info!!!

  5. Yes, great info for people with a real job who can pass the application!
    I, on the other hand, will have no way to access my money overseas without taking severe backdoor punishment from my big 4 bank.
    I should be able to sue GE. It’s my business where I get the money from to pay them.
    I wouldn’t mind if they just asked, “Are you a bogan?”. If bogans were not given credit cards there wouldn’t be a problem.

  6. GE Clear Advantage Card was provided by wizard, but now is called the 28 Degrees card
    28degreescard.com.au/

    It is an absolute must for travelling

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