A recent question posed on my News Corp Gen Y column was whether or not travel money cards are a good idea. It’s a timely question at this time of year, with the Australian Bureau of Statistics reporting a surge in short-term overseas departures around this time each year. Last December, for example, we took 990,000 short-term overseas trips – a good 300,000 more than in November. September and Easter are the other 2 big-travel months.
Anyway, on to travel money cards. Essentially a travel money card is a stand-alone debit card, not linked to your other bank accounts, onto which you can pre-load several foreign currencies. When you go overseas you can then use it like any other debit card. It has the advantage over cash that it’s secure (it’s PIN protected) and convenient (one piece of plastic as opposed to a bundle of several currencies). It has the advantage over credit cards that it can help you avoid foreign exchange fees and has a locked-in exchange rate.
On the flip side, along with the potential benefits the possible drawbacks of travel money cards include the risk of locking in a crappy exchange rate and subjecting yourself to steep fees. Choose a poor-value card and you might just come home from holidays feeling as though you’ve been fleeced by both the overseas tourist operators and your own financial institution.
So are travel money cards a good idea? Well, just like any other form of card, it depends on which one you choose and how you use it. Specifically, investigate the potential transaction and conversion fees you could be charged, the exchange rate you’re quoted and any limitations on number and types of currencies you can hold. Also weigh up any rewards programs on offer. For what it’s worth, Cash Passport Mastercard, Qantas Cash Mastercard and Velocity Global Wallet Visa all scored 5 stars for outstanding value in CANSTAR’s most recent Travel Money Card ratings.
If you do go the travel money card route for your Christmas getaway, perhaps take a back-up credit card in case of theft or loss, and make sure you do take some cash as well. Not all destinations are plastic-friendly!
Travel funds cards: yes or no?
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