When travelling to a foreign country, it’s always tricky to wrap your head around the new money system. We’ve got all the information you need during your stay in South Africa. Whether you decide to use cash or cards – here’s all you need to know.
The South African Currency
The South African money system works in rands and cents. The coins are 5c, 10c, 20c, 50c, R1, R2 and R5 and the notes are R10, R20, R50, R100 and R200. One rand is made up of a 100 cents. As with all currencies, the exchange rate fluctuates, but to give you a general idea of the strength of the South African rand against the major world currencies:
|Hong Kong Dollar||R1,82|
*Exchange rates calculated on 15 May 2019
To work out your currency against the rand, click here.
Although some people think of South Africa as a third world country, a better way to describe it, is a developing country. There are still lots of growth potential in the economy, but the financial system is well-developed with an extensive bank network across the country. But it is best to convert a bit of your travel allowance into cash because some smaller businesses do still operate in cash only.
You can consider using your foreign credit or debit card, or a special travel money card. There are also a wide variety of ATMs that you will find along your travels. Some are linked to a specific South African bank, others designed specifically for foreign bank accounts.
Money Options in South Africa
We would advise you to consider a combination of cash and electronic money for your visit to South Africa. Below a breakdown of your financial options when travelling to South Africa.
Credit and Debit Bank Cards
Using your familiar bank card can make you feel more at home in a foreign country, but it can become a costly option. Visa and MasterCard cards are accepted throughout South Africa. So you will have access to your local account. The cards are accepted wherever you see their signs including local businesses, restaurants, and ATMs. You don’t need to pre-arrange your travel money, but you must be prepared for possible hiccups along the way when using foreign currency with a foreign card. And remember to inform your bank that you will be using your card in a foreign country.
The convenient aspect of using your own bank card, is that you don’t have to pre-arrange a card and weigh up different travel money alternatives. You have access to all the funds in your account, so you don’t have to worry about running out of money. And a credit card is handy when booking your plane ticket, accommodation, and other online services.
Your bank’s service charges for overseas transactions might be very high, and unclear. Also, if you use the card to draw money at local ATMs, the withdrawal fee is pricey. If your card gets lost or swallowed by a local ATM, it will be a big and costly hassle to replace it. To reissue a card can take up to four weeks, if it needs to be shipped to South Africa. If your card has advanced security measures, it may not be compatible with the local machines.
Card fraud must also be kept in consideration, and if your card is accessed, all your money can be stolen. Most banks do offer a money-back guarantee in case of fraud committed, but the policy may be limited during travel. Every time you use your card, the foreign currency will be converted to rand, which is linked to a service fee. Plus, if the exchange rate suddenly drops, your travel budget can be greatly affected.
Travel Money Cards
Most international travel cards do not support the South African currency. But there is a local card available to foreigners from Bidvest bank. It is linked to Visa, which allows you to draw money from any local ATM supporting it. You can also swipe it at local businesses supporting Visa cards.
It is a debit card that you can use to pay for any products or services. You can also draw cash at ATMs or supported point of sale merchants such as PEP stores (clothing) or Checkers and Pick ‘n Pay (supermarkets). This card offers you easy cash access, and it is linked to a fixed exchange rate. You can also use it to fill up your car with fuel at supported petrol stations.
The card offers 24-hour support. You can also activate SMS notifications to keep track of your spending. With the Bidvest Rand Currency Card you can make hotel reservations, but you can’t make car rental bookings with it, unless the agency supports cash/debit card payments. You can collect the card at a local Bidvest bank branch, located across the country in major shopping centres and at the airport. Click here for more information.
The prepaid card is not linked to your main bank account, making it a good secure option. There a set transaction fees so that you can budget your holiday spending. With the SMS notifications you can also keep track of your spending to budget better.
If you use a different travel card option than the Bidvest Rand Currency Card, you will still be transacting locally in a foreign currency, which is linked to a fluctuating exchange rate. You will also be paying transaction fees to convert the money. There may be hidden transactional fees to take into consideration.
If you choose to use the Bidvest Rand Currency Card, you will need to arrange collection of it and have an alternative source of money in the meantime. (But there are branches located in both the Cape Town and Johannesburg airports)
While fees may look low, there are often a number of hidden costs, and card holders should note that they will generally be charged a percentage on ATM withdrawals rather than a fixed rate. The cards are only valid for a certain period of time and must be cashed out before return. The cards can only be reloaded at the official bank branches.
These used to be a very popular travelling money option. They are pre-printed vouchers for a specific currency instead of cash. But they are not widely recognized in South Africa. Instead credit or debit cards are preferred.
Traveller’s cheques are not a viable option for travel in South Africa.
As mentioned, carrying a small amount of cash with you in South Africa is advisable. Especially if you want to explore off the beaten track. If you don’t want the hassle of figuring out an international banking system, it could be the best option for you.
You are guaranteed that you can make effortless payments wherever you go, without worrying about finding an ATM to draw money. There are also no extra banking fees to worry about. And it’s not linked to your main account back home.
It is not advisable to carry around a big amount of cash with you. You can easily become a target of local thieves, who know how to spot an outsider in the country. If your cash gets stolen, there’s no bank guarantee backup to recover it.
Converting a large sum of money means you will have a big bulk of notes to carry around. And when you start using the money, coins have a way of multiplying and filling up your wallet. You might also not get the best exchange rate for your conversion to cash. It can also be tricky to keep track of your spending, if you are using only cash. Plus, you will have difficulty making a hotel or car reservation with only cash. Oftentimes the institutions would require a credit card as a deposit surety.
Recap: What Is the Best Way to Use Money in South Africa
A combination of local South African money in cash form and an electronic money format is the best way to manage your money while travelling in South Africa. Whether you decide to stick to your own bank card, or use a travel card, it’s advisable to not convert all your spending money into cash.