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A woman using smart phone on the street; image used for HSBC Essential foreign exchange travel tips.

How to save money on bank fees and FX while overseas

Don't lose money on foreign exchange and bank fees when you're out of the country. Just remember these essential FX travel tips.

When you're on a big trip you want to relax and enjoy the local culture, not worry about losing money to foreign exchange or ATM fees. So here's a list that will show you how to minimize bank account fees while overseas.

1) A credit card isn't always the best option

Credit cards offer some convenience when you travel, especially for settling large bills like air tickets or accommodation. If you like to use a credit card when you travel because you don't like carrying large quantities of cash, perhaps consider using your debit card instead to withdraw cash when you need it, or for payments just like you would a credit card.

Many people still use credit cards to earn reward points. But, that's not always worth it, because credit card companies don't always offer the best foreign exchange rates and may charge you overseas transaction charges.

Using an HSBC Everyday Global Visa Debit Card might be a better option. It might not earn you air miles, but by not having to pay overseas exchange fees, you could save enough money to buy a plane ticket – and still have some left for souvenirs.

2) Stay in your network

If you use an ATM to take out cash while overseas, make sure it's one that's in your bank's network. If you use an ATM from a different bank or a different network, you could be charged a substantially higher transaction fee. In some cases you will also be charged both an ATM and overseas transaction charge, both by the ATM provider and your own bank for the transaction.

You can avoid paying overseas ATM and transaction fees if you have the HSBC Everyday Global Account, which handles nine major foreign currencies.1 You can change currencies at real time2 rates before you leave or on the go, or exchange at the time of purchase or withdrawal. Whether you use your card for retail purchases, online shopping or cash withdrawals, there are no fees charged by HSBC Australia3 – even for withdrawals from third-party ATM networks.4

3) Pay in local currency when you've got the option

Whether using a debit card or a credit card, if you get the option of paying in your home currency or the local currency, always choose local. The merchant's bank or credit card device usually has a much wider FX spread, compared to your own credit card company making the exchange on your statement.

Though there are times when you won't be able to use a card. For small purchases, or for big purchases from small businesses, you might have to use cash. Here are some tips to make sure you always get the best rates.

4) Exchange currency during bank hours

You'll usually get the best rates if you exchange currency during bank hours. Weekday evenings are okay, but the worst time to exchange is on the weekends, starting from Friday night to Monday morning, because currency markets around the world are closed. Why are weekends usually the worst time? Since banks don't know what the new rate will be on Monday morning, they charge a slightly higher rate to protect themselves against unforeseen market movements when the market re-opens.

5) Always look for hidden fees

Many currency exchange shops advertise a fantastic rate on the board out front. But before you hand over your cash, make sure you get all the details. Do they have a commission or a charge for each transaction? Is that good rate only applicable to notes of a certain denomination or from a certain year? Or is there a certain amount you'll have to convert to get that rate?

6) Go with the bigger brands over smaller shops

If you're going to a bank or a currency exchange centre, choose a big one. Smaller shops often have fewer notes in stock, so they might charge a premium for exchanging. Choosing a reputable brand for your FX needs will also give you the security that you won't get shortchanged or cheated with counterfeit notes. A big, busy venue with more turnover is a better option, but that might mean you're in for a long queue.

7) Buy your currency online

You probably pre-booked your flight and your hotel, so why not enjoy the same convenience and pre-order your foreign currency? All you need is an Everyday Global Account and you'll get access to AUD and 9 other currencies (currency restrictions apply to CNY).

Just log on to your account and convert your Aussie dollars to any of the available foreign currencies.1 Then you can withdraw the converted currency from one of the many ATMs of HSBC's overseas network,4 or paying for things as you go with your debit card.5 And if you're exchanging to HKD or USD, you can even pick up the cash at the branch before your trip – simple and fuss-free. Check here to see which branches offer this service, and remember to call 24 hours ahead of time to make sure the cash is ready for you to collect.

8) Use Order Watch to get the best rate

Not happy with today's exchange rate? No problem. Log on to Order Watch and set the exchange rate you're comfortable with. If and when the rate reaches that level, you'll get an alert. Or you can just set aside the amount you want to exchange, and we'll make the exchange when the rate matches your selection. Find out more about Order Watch here.

If you do plan on using Order Watch, do be aware that it is available via Market Desk if you have $250,000 or more to trade.

9) Carry less cash where possible

These days, debit cards are almost as widely accepted as credit cards. They are also every bit as convenient, and can be used for a lot more than just withdrawing cash at the ATM. For example, you can pay using PayPal, using your chip and pin, or go contactless and use PayWave with your card or mobile.

These options mean that in many countries you can carry less cash around, which is always a safer choice. Plus you won't be going home with "souvenirs" of small bills or coins.

If you require cash, then it might good to convert the currency ahead of time using the HSBC Everyday Global Account, and withdrawing from network ATMs to avoid overseas ATM fees.4

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Disclaimers 

  1. USD, GBP, EUR, HKD, CAD, JPY, NZD, SGD, CNY (currency restrictions apply to CNY).
  2. Real Time Exchange Rates will apply for certain currencies when using online banking and mobile banking to transfer between HSBC accounts while the foreign exchange (FX) market is open (excluding weekends, currency and US holidays). When the FX market is closed on weekends (from US market close on Friday until Asia market open on Monday), the exchange rate which will apply between your HSBC Australia accounts is the exchange rate at US FX market close plus an additional weekend spread. The HSBC Daily Exchange Rate, set once a day (excluding weekends and NSW public holidays) will apply to transfers outside of HSBC Australia entered after currency cut-off times, on currency holidays and on NSW and US public holidays, and will apply for all future-dated transactions on the future date of the transaction. FX transactions are subject to foreign exchange risk associated with exchange rate movements. HSBC FX accounts should not be used for speculative purposes.
  3. Other fees and charges may apply.
  4. HSBC Group ATMs (in Argentina, Mexico and Uruguay) and other ATM owners/operators may charge an ATM Operator Fee for withdrawals or balance enquiries at their ATMs.
  5. Where a currency is not one of the listed currencies available on the Everyday Global Account or in the restricted currency CNY, the funds will be deducted from the AUD account and ATM withdrawals will be automatically converted into the local currency at the Visa exchange rate.