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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. HSBC Real Time Exchange Rates will apply for AUD, USD, EUR, GBP, CNY, HKD, CAD, NZD, JPY, CHF, SGD, AED, DKK, MXN, NOK, SAR, SEK, THB and ZAR when using HSBC Online or Mobile Banking for transfer between HSBC Australia accounts and international transfers within currency cut-off times.

    HSBC Real Time Exchange Rates will apply when the foreign exchange (FX) market is open. When the FX market is closed on weekends (that is from the US market closing time on Friday to the Asia market opening time on Monday), the HSBC real time exchange rate is priced off the exchange rate applying at the time the US market closed plus an additional weekend margin.

    The HSBC Real Time Exchange Rate will not apply on currency holidays, on NSW and US public holidays, to transfers in currencies not listed above and to transfers outside of HSBC Australia entered after currency cut-off times. Instead, the HSBC Daily Exchange Rate, which is set and refreshed every 30 minutes daily from 7:00 AM to 7:00 PM (excluding weekends and NSW public holidays) will apply.

    For future dated transactions via HSBC Online or Mobile Banking, the HSBC Daily Exchange Rate on the future date of the transaction will apply.

    HSBC Real Time Exchange Rates will apply for Global Transfers between your HSBC Accounts. For transfers in unsupported currencies using Global Transfers, the receiving country's daily exchange rate will apply and currency cut-off times of the receiving country may also apply. For future dated transactions using Global Transfers, the HSBC Real Time Exchange Rate on the future date of the transaction will apply when the FX market is open.

    Transfer and correspondent banking fees may apply for transfers outside of HSBC Australia.

    FX transactions are subject to foreign exchange risk associated with exchange rate movements. HSBC accounts should not be used for speculative FX purposes.
  3. Other banking services fees and charges apply.
  4. Non-HSBC branded ATMs may also 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.