Travelling to a foreign country is expensive enough without the added fees and charges associated with accessing your money from a foreign location.
Using your credit card is convenient but it’s convenience you’ll end up paying for. Overseas transaction charges, foreign currency conversion fees, overseas cash advance fees and ATM operator fees all add up and can end up sucking hundreds of dollars from your holiday budget.
Prepaid Travel Money Cards
Travel money cards are a great alternative to credit cards while travelling overseas and allow access to your money and the convenience of being able to load multiple currencies onto the same card. Not to say that these cards are not without their own fees and charges, but used correctly travel money cards are a far better option for making your money go further while on holiday. Whether you’re a student or on a business trip, it pays to compare and do your research when you travel overseas.
ANZ Travel Card
The ANZ Travel Card is a prepaid card that can be loaded with up to 10 foreign currencies to make purchases overseas at over 36 million locations.
- Lock in your exchange rates and know how much money you have to spend
- No transaction fees for electronic purchases in Australia and overseas
- Multiple reload options - online, over the phone or in person
- Manage your money online or over phone 24/7
- Spare card if in case one is lost or stolen
Comparison on Travel Money Cards
Pros and Cons
- Lock in an exchange rate. When you first load the card, it locks in the exchange rate for the money you load on to the card
- Multiple currencies. Some cards offer the ability to preload up to 10 currencies on to the card
- Low cost upfront. The cheapest initial cost is $11
- Increased Security. These cards generally don’t have your name printed on them so if they’re ever lost or stolen overseas there are reduced chances of identity theft/fraud; and
- Reduced Risk. Not linked to your bank account so the maximum amount accessible on the card is the amount you have preloaded.
- No overseas branch access
- Time to reload
- Costly fees. The fees for setting these cards are quite costly, especially the reload fees; and
- Some overseas merchants are reluctant to accept the card as they don’t have your name printed on them.
How Prepaid Travel Money Cards Work
These cards work like any other card except you are responsible for ‘loading’ your spending money onto the card either before you leave to go overseas of from anywhere in the world through internet banking.
Multiple currencies can be loaded onto these cards, making them ideal for trips to multiple destinations. You can load funds in any currency available on your card in different currency ‘buckets’. From the time you load a currency onto your card, the exchange rate is locked in, making it an ideal tool for budgeting and a good way to hedge against negative currency fluctuations. Because these cards are prepaid, you are free to spend up to the value loaded onto the card everywhere either Visa or MasterCard are accepted, including merchants and ATM’s. The balance of your card can be checked via your financial institution and they should also be contacted in the event that your card is lost or stolen.Back to top
Travel Credit Cards
Although credit cards can be an expensive option when accessing your money overseas, there are a couple of credit cards that make good travelling companions. Credit cards with no foreign transaction fees or currency conversion fees are a great way to take advantage of the ease and security that comes with using a credit card while not having to pay for the convenience.
Comparison on Travel Credit Cards
Pros and Cons
- Quick and easy to reload using BPAY or phone/internet banking
- Insurance and travel benefits included
- Card can be used in almost any overseas location for almost everything, including online shopping
- Travel Rewards Cards can earn points for overseas spending; and
- Added security features for lost or stolen cards.
- Fees including ATM withdrawal and reloading of funds are applicable with most Travel Credit Cards
- Interest charges for spending overseas spending accumulate and may be a shock when you return home
- If your card is lost or stolen there is a chance you may be defrauded before you can cancel it; and
- Interest rates are higher than domestic only cards.
How Travel Credit Cards Work
These cards work exactly the same way as your normal credit card. You spend like you normally would and you pay them off as normal too.
When taking money out from a foreign ATM you don’t pay anything when the money is converted from Australian dollars to a local currency but you may be charged the local ATM operator fee. When using your card to make a purchase at a business, there are no international transaction fees. What ever the situation, travel credit cards are a good option for accessing your money. But, therein lies the drawback as you will want to keep on above any accrued interest charges so they don’t spiral out of control.Back to top
Travel Debit Cards
Travel debit cards come with a linked transaction account and are a great way of managing your finance while overseas. These accounts are designed with the traveller in mind and most offer no fee for converting your money from Australian dollars to a foreign currency.
Comparison on Travel Debit Cards
Pros and Cons
- No foreign currency conversion or transaction fees for the Citibank Plus Transaction Account
- Linked to your bank account making it fast to transfer funds on to the card without any reload fees; and
- No inactivity fees or replacement card fees.
- Specific to Citibank Plus Transaction Account;
- Overseas branch access at Citibank branches
- No monthly account fee
- No foreign currency conversion or transaction fees
- No fees for using overseas ATMs in Citibank network
- Increased Risk: complete access to all funds in your bank account; and
- Exchange rates can’t be locked on and will be dependent on the charged as per the exchange rates at the time you actually use the card.
How Prepaid Travel Debit Cards Work
These cards and accounts work the same way as a normal bank transaction account, giving you full, easy access to your funds through an ATM debit card linked to a transaction account. The difference is that these cards are designed to be ‘overseas friendly’, cutting back on the exorbitant fees and charges that are associated with overseas ATM use. In addition to providing cheap access to your money, these cards often come with added benefits like complimentary insurance while overseas.
These cards are ideal for someone who wants to yield the plastic while overseas shopping without having to worry about transaction fees.Back to top
Need Travel Insurance for Your Next Trip?
If you are in the market for the market for a new travel money card, you may also be in the market for travel insurance for your next trip away. Travel Insurance not only provides cover for your funds while you are travelling but also for other losses that might be suffered including: overseas medical expenses, lost or damaged baggage and personal belongings, trip cancellation and rental vehicle excess.
Cover for Your Funds While Travelling
In addition to the cover options listed above, travel cover will also provide cover for different monetary losses that you may experience while travelling. Different cover benefits for your funds may include:
- Travel documents and travellers cheques. Provides cover for the loss of travel documents such as passports and visa documents and also travellers cheques that are lost or stolen from you on your journey
- Credit card fraud and replacement. Provides cover for the replacement cost of credit cards that are lost or stolen from you on your trip and the loss that may be suffered from fraudulent use.
- Theft of cash. Provides cover for the theft of cash from your person, banknotes, cash, currency notes, postal orders and money orders
Comparing Different Types of Travel Cover
As with any form of insurance, it is essential that you take the time to read through the product benefits and exclusions prior to purchasing your travel insurance. Each insurer will have their own set of exclusions and maximum benefits that they will pay for a loss. While it may be tedious, taking the time to read through the product disclosure statement will ensure you get the price you pay is reflected in the quality of the cover.
The best card for you will depend on the frequency of your travel and what you like to spend your money on. If you’re a frequent traveller but not a big shopper the Travel Credit Card is the way to go because you’ll have easy access to your money and earn frequent flyer points on some of your transactions. If you love to shop but don’t want to spend beyond your means then consider a Travel Debit Card because you can easily avoid all those nasty transaction fees. If security is your major concern then the extra protection offered with the Travel Money Card is something to consider.Back to top