Canstar has unveiled its 2017 Travel Money Card Star Ratings research, analysing the cards available today and work out if they’re worth having afterall.
If an overseas adventure is on your bucket list, choosing the right card for your situation may save you extra spending money.
Travel money cards, which give travellers the ability to lock in an exchange rate before they leave, can go a long way to helping keep holiday costs under control. But how do they stack up when compared to relying on your credit or debit card?
Financial comparison website, Canstar has analysed 12 travel money cards and looked at the pros and cons of travel money cards when compared to credit and debit cards.
“A travel money card is a specifically designed debit card, with similar security features that’s not connected to your other bank accounts.
“It can be an easy and secure way to carry multiple currencies in your wallet,” said Steve Mickenbecker, Canstar Group Executive, Financial Services.
While there are benefits, travel money cards differ in certain areas and there are several things consumers need to be aware of when deciding which card is right for them.
“Some offer competitive exchange rates but come with high fees, while others come with lower fees and make up for it by adding in commissions to their exchange rates.
“Travellers should be on the lookout for an outstanding-value offer that has both low fees and a great exchange rate.
“It will pay to do your homework and be aware of these subtle differences, including any additional fees, because they may have an impact on your holiday funds,” said Mickenbecker.
So here’s their outline of the pros and cons of travel money cards when viewed against credit and debit cards.
What are the likely currency conversion fees?
A travel money card likely won’t charge a currency conversion fee if you pre-load ahead of your holiday the selected currencies you want to use while travelling.
However, some travel money cards will charge you a fee to pre-load money in the first place onto the card and you may be charged a fee if you want to use a currency other than what is loaded onto the card.
Will there be ATM withdrawal fees?
If you are going to access cash overseas you should be prepared to pay some fees. At the very least you will be paying an ATM usage fee to the bank that provides the machine.
In addition, some travel money, credit and debit cards charge a fee to process an ATM transaction while other cards process the transaction for free.
“Regardless of whether you’re using a travel money card, credit or debit card, the chances are you’ll be paying an ATM usage fee to the bank that provides the ATM. This will be a flat fee in the respective currency, which will appear on the screen in most cases,” said Mickenbecker.
“This is typically only ever a few dollars but it can add up if you are making multiple withdrawals.”
How will exchange rates fair?
With travel money cards you are fixing the exchange rate when you load the card so you won’t be up for any surprises.
However, the trade-off is that you generally will be receiving a less favourable exchange rate when you load the card with the currency, meaning there’s less spending money.
What is the typical loading time for putting more money on the card?
Travel money cards require a deposit of pre-loaded money in your destination country’s currency, which doesn’t apply to credit and debit cards given they are directly linked to your bank account.
The benefit of pre-loading money is that you can set a budget of how much you plan to spend on your holiday. But if you do happen to go over this amount, then you will need to reload the card.
“Travel money cards can take up to three days to make funds available when you transfer more money onto your card, so they do require pre-planning and budget watching,” said Mickenbecker.
“Some cards on the market will charge you a reload fee if you need to load more money, so this is something you will need to be aware of before buying a certain card. The three 5-Star Rated cards in Canstar’s 2017 Star Ratings research do not come with reload fees, so that would be a good place to start looking!”
Who offers the best value when it comes to travel money cards?
The Canstar 2017 Travel Money Card Star Ratings research compares both price and features across the different cards available in the market to determine those that offer outstanding value to consumers.
According to Canstar, Travelex, Qantas and Velocity as 5-Star Rated providers.
Travelex’s new product the Travelex Money Card has achieved its 5-Star Rating by competing well on the price and feature offerings compared to other products on the market. In terms of price, Travelex charges fewer fees than other cards. The card also holds 10 currencies on its card.
In terms of features, its 5-Star Rating was mainly due to the accessibility of purchasing with and reloading the card at millions of outlets worldwide, and access to free Wifi at many of these, giving users on-the-go connection without being charged roaming fees.
The Qantas Cash Card stands out due to the inclusion of the company’s rewards program where card holders can earn Qantas Points on all eligible purchases both domestically and internationally. The card offers the ability to load up to 11 currencies.
Qantas Cash has low fees for accessing funds via ATM withdrawals overseas and doesn’t charge fees for purchases, transactions, inactivity, or any ongoing monthly fees. The card also has a high degree of functionality within its smartphone app.
The Velocity Global Wallet achieved Canstar’s 5-Star Rating on the back of its rewards points, which allows card holders to earn one Velocity Point for every $1 AUD spent overseas and one for every $2 domestically.
The Velocity offering holds 11 currencies on its card and Canstar assessed that it provides above average value on the exchange rates considered within the Star Ratings research.