This is how many credit and debit cards you need overseas

The answer is three. That’s the perfect minimum, but there’s nothing wrong with more. A mix of debit and credit cards preferably, since each has its own strengths and weaknesses. For example if you’re hiring a car, you’ll probably need a credit card as security since most car-hire agencies will not accept a debit card. Also, use a credit rather than a debit card when you check into a hotel and you’re asked for a card to put a hold on your funds for each day of your stay. That hold might not be released until a week after you check out, sometimes even longer. If you’ve used a debit card you will not have access to those funds but if it’s a credit card, it’s not your cash that’s being held in quarantine.

Currency-conversion fees can reduce your spending power by 2-3 per cent but there are some debit cards that charge low currency-conversion fees such as the Wise Travel Money Card (wise.com). Use a card with low fees to pay hotel and restaurant bills and you’ll save a couple of per cent over the cost of charging to most credit cards. The same applies to cash withdrawals at ATMs, use a debit card and you’ll get more local currency per Aussie dollar. Some credit cards allow you to withdraw foreign currency from ATMs but your card provider starts charging interest as soon as you make the withdrawal, typically at the rate of about 20 per cent per annum.

If you pay for goods or services and the merchant asks if you’d like to pay in Australian dollars rather than local currency, the answer should be “no”. Paying in Aussie dollars means you’re entering into a dynamic currency-conversion transaction, and that could end up costing you about five per cent more than if you pay in local currency.

When you’re out and about, take only the cards you’re going to need that day. One credit and one debit card is ideal, any additional cards should be left in your hotel room.