I'm an Australian who just got back from a trip to Malaysia for two weeks over the New Year, so this feels a bit like dejavu! I set up a 28 Degrees credit card (my first ever!) because of their low exchange rate and lack of fees on credit card transactions. People say it's the best card for travel and I was ready for it.
However, since Malaysia is largely a cash economy (especially in the non-city areas), I found myself mostly just withdrawing money from my credit card and thus getting hit with a cash advance fee ($4) and instant application of the high interest rate (22%) on the money. Since I was there already and had no other alternatives, I made five withdrawals over the two weeks and ended up paying about $21 in fees. Not great!
But last time I travelled I had a Commonwealth Bank Travel Money Card (not a great idea), and if I'd used that instead on this trip and given up fees for a higher exchange rate, I would have been charged an extra $60! Presumably my Commonwealth debit card would have been the same. This isn't even including mandatory ATM fees.
If I've learned anything from this experience and these envelope calculations I'm doing now, it's these:
- The kiosk will inflate their rates to gauge you as much as possible, but so will the banks and ATM owners. Everybody wants their share. Look for flat fees rather than higher rates, since you always know what you'll be getting, and I suggest going to ATMs rather than kiosks just for the convenience.
- Stuff is CHEAP there! Eating at the stalls in Georgetown in Penang was about $1.30 AUD for an excellent meal. Regardless of your exchange rate, you'll be saving money anyway by avoiding Australian food prices :P
- Carrying around large amounts of money will probably make you uncomfortable. Heck, even leaving stuff locked in a safe in my hotel room made me uncomfortable, so I tried to carry around only a few hundred Ringgit where I needed it. To me, this was worth the slightly higher incidence of withdrawal fees.
- Try to look at your money from the perspective of the trip as a whole: If you've spent $1000 on the flights and $500 on hotels and now you're agonising over a few $2.50 fees, you may have your priorities skewed and may not enjoy the trip as much :)