Australia is full of people who fancy going to Bali, and we don’t blame you. You pack your bags, dream of sandy beaches, and think about sipping a refreshing beverage near the swimming pool. But as soon as you come back to Australia and receive your bank statement, you see that there are many additional charges associated with your purchases abroad. These extra fees are called currency conversion fees and could completely destroy your holiday mood. Getting familiar with how they work is the key to avoiding extra costs.
Currency Conversion Fees Explained
Whenever you use your usual debit or credit card for paying for goods and services in Bali, your bank has to change Australian dollars to Indonesian Rupiah. Banks hardly ever provide such a service for free. They typically charge a certain international transaction fee – the average rate is approximately three percent of the total transaction sum.
In addition, there is another charge called the exchange rate margin. It refers to the difference between the actual exchange rate that banks give clients and the market rate that is slightly higher. These relatively small sums may accumulate significantly when you visit the place for about two weeks.
Effective Methods of Avoiding Extra Costs
There is no need to spend unnecessary money. Just with some preparatory steps, you would be able to avoid most expenses that banks make you incur when converting money.
Load Up a Travel Card
This is a simple way to save lots of money. First, you pre-pay Australian dollars to the card. Secondly, you exchange the money to the local currency in advance, using the predetermined exchange rate. As a result, you are not subjected to any market fluctuations in currency rates during your holiday. Also, you automatically bypass all international transaction fees because you use already changed money every time you make a payment.
Use Local Currency
Cash payments are widely used in Bali. If you decide to use IDR, you are sure not to be charged any additional fees for your electronic payment methods. To get the best exchange rates, you should try to use reputable money changer operators who can be found in main touristic locations of Bali. Never trust those small booths hidden in souvenir shops because there is no guarantee that you will be given correct rates.
See also: How to Learn Cryptocurrency Step by Step
Get a Travel Credit Card
A travel credit card from ING is a great choice if you do not want to risk using cash money. There are credit cards available in Australia that do not take international transaction fees into account. Although you still pay with Mastercard/Visa rates, avoiding extra fees saves quite a large sum of money for you.
Make Wise Decisions with ATMs
Sometimes you may have a desire to withdraw additional money. To avoid extra commissions, it is better to find an ATM operated by the local bank and not the one that works independently on the street. Always click ‘No’ if the machine offers you to continue the operation without or with currency conversion. You force the bank to pay you in IDR, hence, the conversion occurs with your Australian bank, and you pay slightly lower rates for it.
Protect Your Vacation Budget
Holidays are not only fun; you can also waste a lot of money during your vacation because of unpreparedness. With this simple advice on payment methods and rates, you will definitely be able to spare much more money for entertainment.
