Rating pre-paid currency cards
Do your sums when choosing one of these handy holiday tools, says
Josh Martin.
Prepaid foreign currency cards have largely put an end to bill shock for those of us who used to grimace at the cash advance interest rates charged by credit card companies or cringe harder with each foreign exchange transaction fee your bank debit card runs up.
For an eftpos-loving country such as New Zealand it is strange for us to have to limit the amount of swiping and be strategic with our ATM withdrawals in order to avoid hundreds of dollars in added fees, penalties and poor exchange rates.
No wonder we signed up in droves for these payment toys. It’s simple to gradually load up money, lock in better rates and spend in a foreign land with no fees for paying by card and sometimes for withdrawing cash.
These cards are not without charges and fees, and make money off the exchange rate offered when you top up. So which one is best for you?
Loaded for Travel
This card from Kiwibank is backed by Visa.
Pros:
The card lets you pre-load up to 11 different currencies, the most of any travel card in the New Zealand market. A recent Canstar comparison of offered forex rates found Loaded for Travel gave the best for travellers heading to Australia or the Eurozone. Potentially the best long-term option due to currencies on offer and low fees OneSmart to offer the worst rate for Australian dollars (AUD).
Qantas Cash
This card is available to all on the Qantas Frequent Flyers programme.
Canstar also spoke highly of this offer from across the ditch and in their study, Qantas Cash had virtually no fees in terms of obtaining, loading, reloading and purchasing. ATM withdrawal fees were consistently less than using Air New Zealand’s OneSmart card. If you’re a Qantas Frequent Flyer you’ll earn loyalty points as you spend.
Canstar found Qantas Cash to offer the second-best rate in the market for AUD, but for other currencies it was at or near the bottom of the table.
It’s fair to say all of these products do ‘clip the ticket’, it’s just a matter of when. The airline cards come out better on balance if you’re not withdrawing too much cash. If you’re thinking long-term Loaded for Travel looks to pay off its high set-up costs quickly and offers more currencies, while letting you get cash withdrawals affordably.
*Canstar’s average rate for foreign currencies was measured over 10 days in April and May.
Pros: Cons: Verdict: