Travel Money 101 - the Mozo guide to jetset spending

Almost as exciting as booking your idyllic holiday, high-flyer biz trip or irritatingly long stay in some exotic location is the exciting world of currency conversion. Hold on to your hats, as Mozo cruises through the four basic ways to spend money overseas.

Foreign exchange

Also known as:

  • forex
  • FX
  • currency conversion
  • exchanging your almighty Aussie dollars for handfuls of lesser currencies

In a nutshell: Banks, foreign exchange sorts (or 'bureaux de change'), and various other finance types such as Travelex and American Express will take your Aussie dollars and convert them into another currency. Most major currencies are available including US Dollars, Euros, Pounds, Yen, Hong Kong Dollar, Yuan, New Zealand Dollars.

The pros:

  • Forex is as quick and simple as currency conversion gets
  • Many institutions offer highly competitive foreign exchange rates and low fees

The cons:

  • Carrying large amounts of cash is not always the savviest travel-money tactic
  • Many institutions offer highly uncompetitive foreign currency rates and/or big, hidden fees

The final word: It's always handy to have local currency before you touch down in a foreign country, and forex can be great for that first few hundred dollars.

Compare foreign exchange rates now.

Travel money cards

Also known as:

  • cash passports
  • pre-paid travel cards
  • pre-paid travel money cards
  • international plastic

In a nutshell: You load up the cash passport with the currency (or currencies) of your choice such as USD, Pounds, Euro, NZD, and then take it out to restaurants, shops, and exotic, foreign ATMs to make purchases and withdraw cash.

The pros:

  • Travel money cards are as convenient as foreign currency gets
  • You enjoy all the security of pin-number protection

The cons:

  • There's an irritating charge to recover remaining funds after your holiday
  • A sneaky foreign exchange margin can make it expensive convenience

The final word: You'll want to balance the cost of loading the prepaid card up - including the margin - as well as withdrawals and closing the card against the convenience of having a local card anywhere in the world.

Compare prepaid travel cards now.

Travel credit cards

Also known as:

  • globe-trotting plastic

In a nutshell: Some credit cards sting you with massive overseas transaction fees and miserable forex rates. You want the best travel credit cards that are accepted everywhere yet don't have the international price tag - and all those lovely rewards points and bonuses.

The pros:

  • Travel credit cards can offer great currency conversion and global flexibility
  • Many rewards credit cards offer frequent flyer bonuses such as free insurance and purchase warranties

The cons:

  • A hefty annual fee attached to some of the best travel credit cards
  • You might return home to a pile of jetset debt

The final word: Regular travellers are most likely to benefit from a travel credit card deal, while occasional holidaymakers should weigh up the cost of a frequent flyer credit card against the benefits they'll get to enjoy.

Compare travel credit cards now.

Travel debit cards

Also known as:

  • travel cash cards
  • travel transaction accounts
  • your everyday account facing the big wide world

In a nutshell: These days, travel debit cards are accepted everywhere their credit-card cousins are, plus you don't need to worry about spending foreign money you don't have.

The pros:

  • The best travel debit cards offer fee-free overseas ATM withdrawals and low currency conversion margins on purchases
  • Avoid the horrors of holiday debt

The cons:

  • You don't earn those lovely frequent flyer rewards points
  • Sometimes you just want to mortgage the future for another poolside mango daiquiri

The final word: All the convenience of your everyday debit card meets low fees and great forex margins - but be sure to check that your transaction account is nice and full, and that those fees and margins are indeed travel-happy.

Compare travel debit cards now.

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