Written

For

The

Australian

-

How

to

use

the

strong

Australian

dollar

to

lock

in

great

overseas

travel

rates

Ever paid $8 for an egg sandwich in Tokyo and felt like you won? That was me recently, not because the sandwich was cheap (although it kind of was), but because I'd finally cracked the code on how to spend money overseas without getting quietly fleeced by my bank.

Here's the backdrop: the Aussie dollar is having a moment. It's at five-year highs against the Japanese yen, South Korean won, Indian rupee, Indonesian rupiah and Argentine peso. Against the yen alone, we're up more than 30 per cent from a few years ago. The euro is still a sore spot – we're 15 per cent weaker there – but overall, if you're planning an overseas trip, the timing is working in your favour.

The problem is that most of us hand back a chunk of that advantage to our bank. My credit card's exchange rate sits around 5 per cent below the spot rate, and then there are foreign transaction fees on top. Cash used to be the workaround, but the world is going cashless faster than I realised – on my recent trips to Tokyo and Paris, physical yen and euro barely got a look in.

So I opened a travel money account – in my case, Wise, though Revolut, CBA Travel Money Card, Travelex, Westpac Worldwide Wallet and Australia Post Travel Platinum are all in the mix. Near-spot exchange rates, no foreign transaction fees, a debit card that works with Apple Pay, and the ability to hold multiple currencies and earn interest.

Here's the clever bit: I can lock in favourable rates now. With a Vietnam trip coming up and the dong at 10-year lows against the AUD, I've already converted some funds. For the US, I'm dollar-cost averaging into USD, waiting for a move back toward US80c. Europe, I'm holding off.

Think of it as dollar-cost averaging your holiday.