26 Nov Consider taking a Travel Money Card on your next Overseas trip
If you’re going overseas this Christmas or in the new year it’s worth considering taking a travel money card along. They are more convenient than traditional travellers’ cheques and you should receive a better rate than if you were to use a standard credit card overseas given the usual foreign exchange fees. Let’s take a closer look.
Just like cash and credit cards, travel cards are an option for carrying your money overseas. Travel cards allow you to load money onto the card here in Australia, and convert the funds into multiple currencies so that you have the local currency ready to spend when you get to your destination. It is an ideal way of travelling to a number of countries with multiple currencies without the hassle.
Beware of the fees!
Every travel money card is different but they may charge a setup fee, replacement card fee, loading fee, reloading fee, inactivity fee, ATM fees and card closure fees.
There are however a lot of ways to reduce the fees that you will be charged when setting up or using your travel card overseas. Like credit cards, all travel cards are different but the fee reducing tips to look out for are:
- $0 or low setup fee – this is to start your travel card account
- $0 or flat rate loading fee if loading large amounts of currency – some cards will charge you a percentage of the load amount which could be hundreds of dollars
- $0 or low reloading fee if you plan to keep putting money on to the travel card whilst travelling
- Watch the inactivity fee if you plan to reuse your travel card on another overseas trip. Usually after 1 year there will be a monthly inactivity fee. Try to find a card that doesn’t charge for inactivity.
If travelling for a couple of weeks or more it is a good idea to use a travel card however, if you are only away on a short trip with a low spending budget then your debit or credit card will be a lower fee option.
If visiting more than one country you should think ahead about the smart way to use your travel card. Don’t load all of your Australian dollars into the first currency you need because you will be hit again with another set of fees when you convert to the next currency. Convert from Australian dollars as you go.
Try to use your travel card at the point of sale to minimise ATM fees. You won’t get charged a fee when you pay for goods and services, but you will when you use an ATM. It is also worth checking if you can get cash out at the time of sale (similar to our EFTPOS system here).
Nowadays may travel money card providers will issue you with 2 cards. It is recommended that you store 1 separately as a backup in case you loose your main card. You can also get cards with smart chips and pin details associated to increase the level of security.
A major security feature of travel cards is that if lost or stolen, your maximum exposure is the amount you have on the card at the time.
Be aware of the time it takes for funds to appear on your travel card. You may be able to BPAY additional funds on to your card while travelling but the money may not be accessible for a couple of days. Check this with your chosen travel card provider.
See if you can choose when your Australian dollars are converted in to the chosen foreign currency. You may have the benefit of loading your Australian dollars on to the card but then waiting until a time when the conversion rate is more desirable. This is particular useful for people who load their travel cards well before they commence their trip or are travelling for an extended period of time.
A benefit of travel cards for the budget traveller is that they allow you to plan ahead. Load your holiday spending budget on to the card, convert the funds you need in to the chosen currency so you can see how much you will have and then allocate your daily spending limit. It is much easier to visualise your budget when you know exactly how many pounds, euros, USD or Yen you have at the time.
Choosing the right card for you may just come down to what currencies are available with the chosen card. Be wise about the fees and you should have the majority of your spending money available to you for enjoying your trip.
If you have any questions or would like to know more about smart money choices please contact me firstname.lastname@example.org