10 questions answered

Currencies and card fees are not the only things to consider when you’re heading overseas

The idea of making your dollar go further by locking in the currency in advance is attractive but keep a level head about it

Q What are the main things I need to look for when comparing travel cards?

Make sure you take a close look at fees. Travel credit cards involve purchasing fees, loading fees, reloading fees, inactivity fees and even an account closure fee.

Pay attention to ATM withdrawal limits as some cards restrict how much money you can take out each day. If you need a lot of cash or your prepaid travel card charges a fee per transaction, it could quickly get very expensive.

Consider your itinerary and the card’s supported currencies. Prepaid travel cards usually support a number of foreign currencies, though the exact ones will depend on the individual card. Check the card’s currencies, and make sure they match your destination, otherwise you’ll have to shell out currency conversion fees each time you spend. BESSIE HASSAN

Q What fees do I need to be aware of?

Travel money cards come with a range of fees, from loading and reloading to ATM withdrawal and currency conversion fees.

Depending on the card you choose, there can also be initial purchase fees and an account closure fee. When choosing a card, consider the main ways you’ll be using it and avoid fees that’ll mostly impact you.

For example, if you’re travelling to Japan and know you’ll mainly use it like a credit card, you won’t need to worry about withdrawal fees. But if you’re visiting a country where you’ll need cash for food carts and night markets, look for one with lower ATM fees. BESSIE HASSAN

Q What is an exchange rate margin?

This is the amount you pay on top of the official exchange rate. It is an invisible charge that is built into the exchange rate by travel money card providers. This is one of the ways they make money. How much you pay differs according to the card provider and the currency in question. Before choosing a card, compare the exchange rates as some may offer better value than others, which could equate to sizeable savings on your holiday. Start monitoring exchange rates well ahead of time and if you think the currency in question is going to worsen, you have the option of locking in a more favourable rate earlier.

KIRSTY LAMONT

Q Who offers travel money cards and what are the best ones?

Most people will already have a relationship with a travel money card provider, with the major banks, a number of challenger banks, the two major frequent flyer program providers in Australia and even Australia Post all playing in this space. In addition, foreign currency exchange brands such as Travelex and Cash Passport also offer cards.

The best card is the one that best suits your individual needs. Important things to consider when shopping for a card are ensuring the currency you need will be available on the card, understanding how you will transact in your destination and the fees that will be applicable, and finding a provider offering competitive interest rates for your destination.

It’s also worth keeping in mind that there are multi-currency banking accounts that could provide an alternative to a travel money card. Both HSBC and Citi have recently refreshed their accounts, which can provide many of the same benefits of prepaid travel money cards, such as allowing you to lock in your exchange rate before departing.

JOSH SALE

Q How do I load/reload the card and how long will it take for the money to go in?

Usually the quickest and easiest way to load and reload funds on your travel money card is via your card provider’s mobile app or online site. If you have opted for a travel money card with a bank, you should be able to load and reload via their internet banking platform. There is also an option of using BPAY to manage your funds and some card providers even have physical branches where you’ll be able to load and reload – just remember to bring your card and ID. Load times vary between card providers but generally it can take up to three days until the funds are available for you to use. If you have completely run out of money on your card, you could be left in a compromising situation so it’s important to ensure you have a backup payment method with you. KIRSTY LAMONT

Q Is it a good idea to save money in a travel card, ie drip-feed currency before you go on holidays?

If you are planning a holiday a couple of months out, it’s worth having a look at how the Aussie dollar is stacking up against the currency of your destination. The idea of making your Aussie dollar go further by locking in the currency in advance is an attractive one but unless you’re in the forex game, or even if you are, keep a level head about it. Exchange rates can move quickly and what goes up will ultimately go down.

If you do decide to preload currency, start by tracking exchange rates regularly to get an idea of what the Aussie dollar is worth. Also check the fees involved with drip-feeding money onto your card. Some card providers charge relatively high reload fees, which could make the exercise cost prohibitive. SALLY TINDALL

Q Will the card be accepted everywhere?

Travel money cards will usually be tied to either the Visa or Mastercard programs, meaning they should be accepted by most

ATMs and merchant terminals (POS) that accept credit/debit cards. While there are some examples of one of the major programs not being accepted – the most famous being Costco in the US, which has an exclusive agreement with Visa – in most instances retailers that accept one will accept both.

Keep in mind that certain transactions – such as those with hotels or car rental companies – will require an actual credit card. This will usually be due to their deposit policies, where they want to make sure that if you do happen to incur an extensive bill they can charge your credit card. As travel money cards are prepaid, you might be less likely to have an available balance large enough for them to charge in these instances.

JOSH SALE

Q Can I earn reward points?

Some travel card companies offer a raft of sweeteners to make their card more attractive: everything from cashback to frequent flyer points and complimentary airport lounge access. For example, the Qantas Travel Money card allows you to earn 1½ frequent flyer points for every $1 spent overseas and one point for every $4 spent in Australia. It’s direct competitor, the Velocity Global Wallet card, offers two Velocity points per $1 spent overseas and one Velocity point per $1 spent in Australia. However, it’s important not to choose a card based on perks alone. Before signing up look at your circumstances and ask yourself these questions: Am I likely to use the rewards? Will they encourage me to put more money on the card? And does the card come with extra fees and charges?

SALLY TINDALL

Q What happens if I lose the card?

Losing or having your travel card stolen while in some far-flung corner of the world is something every traveller wants to avoid. Some providers pre-empt this by issuing a back-up card that you can activate if you lose your main one. So if you’re someone who has a history of leaving their handbag behind, pick a provider that issues an emergency card and store it in another part of your luggage. If you haven’t been issued with a back-up card, have your bank’s number handy so it can place a temporary lock on your card and advise you what to do next. Most banks will send you a replacement. NAB’s Traveller card does this free of charge and it generally takes between three to seven business days, depending on where you are. CBA’s Travel Money charges a $15 fee.

SALLY TINDALL

Q What should I do with the card when I return from overseas?

This will depend on the type of card you chose. Some will allow you to keep the funds loaded on the card into perpetuity without fees, so if you find yourself planning your next trip on your flight home, then keeping the money aside for your next trip could be an option. However, other cards will charge inactivity fees on a monthly basis if the card is not used for a period, so keep this in mind.

If you regularly shop online in the currency you have on the card, using the residual balance on your travel money card might be a good option to avoid incurring further exchange rate costs with these transactions.

Generally, transferring the currency back to Australian dollars and then withdrawing the funds will be a costly exercise, as you’ll pay the foreign exchange rate margin twice and potentially withdrawal fees. This highlights that it’s important to only load onto the card the amount you intend to use on your holiday.

JOSH SALE

Visit moneymag.com.au/travelmoney for the answers to more questions including what are the advantages of using a travel money card rather than your own debit/credit card, what are the disadvantages, can you and your partner each have a card or do you need separate accounts, and what happens if you are going to more than one country.

Generally, transferring the money back to Australian dollars and then withdrawing the funds will be a costly exercise