Are Travel Money Cards Really Out Shining The Conventional Debit Or Credit Cards?
December 16, 2009 by Amy Simpson
Filed under Credit Card
There are many people living in the United Kingdom that have delayed trips to the U.S or Europe because of the horrible currency exchange rates; however, you can remedy this situation by using travel money cards, which are not commonly know but propose an appealing choice.
What’s a travel money card?
These cards are fairly new additions to the cards that are available out there, and they provide you the ability to place a certain amount of a specific currency on the card at a predetermined exchange rate, so that you have ready access to currency when you travel.
You can get these cards on the providers’ websites online, and the transfer of funds to the card can be made on the phone, the internet, or through SMS services, in some instances. At this time, only the pound, euro, and U.S. dollar can be uploaded onto currency cards.
What’s the big difference?
One major gain is that you will receive an exchange rate that is much more favourable than if you went to High Street and use the services of the bureaux de change. Another plus is that the exchange rate of the uploaded funds is fixed, so there will be no surprises after you use it. Established credit cards and debit cards typically use the exchange rate that applies at the moment of the transaction, so you never know what you have spent until you see your bill.
So is that all there is?
Yes – there’s more. How about no additional surcharge for the currency conversion? Some credit and debit card providers tack on an additional fee of around 2.75% extra on top of the exchange rate — which costs you even more.
These foreign currency exchange fees also apply in shops and eating establishments; however, a travel money card does not have these associated charges. The rates charged for taking out cash with a credit or debit card can be very high, but since you have prepaid the amount on your currency card, it is not a loan, and there are no fees for the service.
That is great news! Now, what are the possible drawbacks?
Currency cards are different from credit cards, so you do have to load them up before you travel, which means your holiday spending has to be sorted out in advance, rather than paid for on credit. I’m not sure, in this economy, that this is such a bad thing. There is still an ATM withdrawal fee linked with these cards, but this, too, is not entirely off-putting — the fees are still a great deal lower than credit or debit cards.
RBS and NatWest (for example) at present have a withdrawal fee of 2%, which is a whopping 10 if you withdraw 500! For reference, you’d pay a one off fee as low as 1.50 for an ATM withdrawal on a currency card.
The major disadvantage of a travel money card is that you will be charged as much as 2.75% if you use the card for a currency that wasn’t assigned to it when it was issued. For instance, if you paid for something in U.S. dollars on a card issued in euros, then you be required to to pay this foreign currency exchange fee. There are cards, however, that don’t carry an FX cost.
What about credit cards that can be used without FX charges?
These classic credit cards are: the Abbey Zero, Nationwide Gold, and the Post Office. The problem that still exists (i.e. the last two) is that even though they’re a fantastic deal (no foreign exchange fees), they have cash withdrawal charges of 2.5% at the time of this writing (minimum 3), and don’t measure up with travel money cards (unless you’re opting for credit for your holiday).
In contrast, the card from Abbey has no cash withdrawal charges no foreign exchange conversion charges as always, there’s a catch — it’s got the highest interest rate of the three, at 25.9% presently.
Keep on going, I’m convinced! So what are considered the best travel money cards out there?
The FairFX Euro Currency card is known to be the best among the euro cards at this time due to having the lowest ATM fee at 1.50 with a 0% convert fee, and excellent exchange rates. While the Indigo Travelcard Euro has a fairly low ATM fee at 1.95, it also has a higher convert cost of 2.75%. Then there is the ICE Travellers CashCard Euro which has a high 3, but you have no convert fee.
FairFX also leads the pack on cards where the Dollar is the main currency. It has no conversion fee, and an ATM fee of only $2. No conversion fee and $3 ATM withdrawals brings the ICE Travellers CashCard Dollar in at a close second. No conversion fee means you can use the cards anywhere.
What’s the best travel money card for world travel?
An ‘Anywhere Card’ has just been released by FairFX along side their current euro & dollar card offering. This is an ideal card for travel to countries outside the USA and eurozone.
With a FairFX Anywhere Card there are no loading fees and no ATM fees! The only charge that applies is a 1.5% transaction fee which definitely beats every other similar type of card in the market.
Be advised that for the moment FairFX has a special offer going which offers you a free euro, dollar or sterling card (normally 9.95) which just requires a small minimum initial load. So what are you waiting for? Get your own travel money card and start saving even more money today!
Debt Collection L... (1)
Matt (1)
Very travel money cards are very cheap compared to the alternatives.
There are rumours that Ryanair are going charging for the the useage of debit/credit cards to purchase their flights and you will be only be able to purchase these flights for free using travel money cards – Guess what, they are conveniently launching their own!
This market is relatively new, and one which is highly competitive. It is recommended that you shop around to get the best deal as there are constantly new entrants to the market who are looking to promote their brand.
Pre-paid cards are likely to become more and more common over the coming months and years.