We look at the Pros & Cons of using a Travel Card on your travels
When planning an overseas trip figuring out how to access your money while away is complicated and often left to the last minute. You then end up paying high fees for changing foreign cash or with unexpected fees on your credit card for making purchases or withdrawals overseas, this is where prepaid travel cards can save the day.
Read more about the fees and exchange rates on using credit cards overseas and about the importance of avoiding the avoiding-dcc>direct currency conversion rip-off!
With a bit or planning one way to reduce these fees is to find and travel with a prepaid Travel money card.
Multi-currency Prepaid Travel Cards
Also known as cash passports, these prepaid travel cards allow you load money onto them before your trip or while you are away via phone or over the internet. You can use them to make purchases and foreign cash withdrawals from ATMs. They are safer than taking actual cash as they also have credit card-like security with pin number access.
Advantages of Travel cards
You can choose the best time to purchase foreign currencies before your trip if you’re worried the currency rate might drop. The idea is to load up with the currencies you will be using on your trip, the load card exchange rates are generally better than changing actual cash and the ATM withdrawal fees are free or only a few dollars.
Like any prepaid card, those designed for travel primarily offer users peace of mind as they represent a safer way to carry multi currencies abroad. They are loaded cash which can be used for purchases and cash withdrawals at ATMs much like any credit/debit card, but the card itself is not linked to the owner’s bank account.
In addition, in the event of the card’s theft or loss the owner can quickly and easily get a replacement card with any unused funds transferred over for free or for a nominal fee with some providers.
As well as security, the other obvious benefit is simple and effective holiday budgeting. Modern consumers are becoming much more aware of the hidden costs involved of spending abroad, understanding that regular use of their credit/debit cards can lead to them racking up significant charges to be dealt with back home, or even worse, running out of money while on holiday.
Prepaid travel cards are preloaded with currency fixed at that day’s exchange rate. This allows the user to know exactly how much foreign currency they will have access to via the card, regardless of fluctuating exchange rates. The given rate on the day you make the exchange is the rate you get.
Put simply: prepaid travel cards allow consumers to accurately predetermine how much they want to spend while travelling so they can budget accordingly and avoid overspending.
What are the drawbacks?
The disadvantage of prepaid travel cards is the various fees and also what to do with left-over money on the card at the end of your trip. An option here is to load only what you think you will need for your trip and too top it up while you are away over the internet, or leave the money on the card for the next trip or any internet purchases made in the foreign currency.
Another thing to watch out for is if you use up all of a loaded currency then the card provider may automatically transfer funds from another currency loaded on the card at less than favourable rates. Also when using the card with currencies not on the card then you will find the exchange rates are not great.
Try our travel money comparison calculator to Compare Travel Cards before for your next trip abroad.
\[ccysearchbox\]
BER articles that mention Cards:
Disruptors Challenging Australian Banks in Forex Price and Service: ACCC Report
Key Takeaways from the ACCC inquiry into currency conversion services. BestExchangeRates referenced among comparison sites playing an important role in customer awareness of the excessive currency margins charged by banks.
Further reading on Cards - Guides, Reviews & News from our research team.
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.