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Should you use a travel card when overseas?

As clients prepare to escape the winter blues with an overseas trip, we hear a lot of questions about travel currency cards. There is a lot of debate as to whether or not travel cards are useful or if they’re a rip-off, and unfortunately, it’s not a simple question to answer.  It boils down to your circumstances and personal preferences.  To help give you a better idea if a travel card is appropriate for you, we decided to compare buying a travel card with using your domestic bank or credit card overseas.


Below are some things you might want to consider:

ConsiderationsTravel CardBank/Credit Card
Exchange RatesTravel currency cards give you the ability to load a currency (or multiple currencies) before your trip to lock in the exchange rate at that time.  This can be an advantage when the Australian dollar is strong or if you prefer certainty about how much money you have to budget on.You cannot lock in an exchange rate on your bank or credit cards.  As a result, your spendings become directly affected by the Australian dollar as it may fluctuate up and down over the course of your trip.   This can be an advantage if the Australian dollar appreciates during the time you are away, but can also be less than ideal if the Australian dollar depreciates.
Back Up CardsMost travel card providers will supply you with two cards, one primary card and a further backup card.  Provided you keep these cards separate, it may save you the headache of being in a foreign country without being able to access your money.With a bank or credit card, you may not have the benefit of a backup card though we always recommend taking a supplementary card. Provided you are mindful of your money while away this is likely not something you need to worry about.
ConvenienceMost currency cards are backed by one of the major providers, Visa and Mastercard, meaning they can be used almost anywhere in the world.If your cards are backed by one of the major providers, like Visa or Mastercard, your card can be used just about anywhere in the world without problem. Acceptance of Eftpos cards is not as widespread.
SafetyInternational currency cards are not linked to your everyday savings account therefore if your card gets stolen, your losses are limited to what you had loaded.If you lose your credit card your losses are restricted to your credit limit, however, quite often credit card providers will have anti-fraud money back guarantees.  If you decide to take your domestic bank card, our suggestion is only to keep as much as you plan to spend plus a small buffer.
CostsWhile travel cards promote themselves as being a cost-effective alternative to using your everyday bank card, costs can soon stack up.  A card establishment fee, ATM fees, currency exchange fees, reload fees, inactivity fees, set up costs, closure fees and others may all apply.  We explain some of these fees below.Bank and credit cards will typically see ATM fees, transaction fees and currency exchange fees.

Based on the information above, travel currency cards compare favourably to using your domestic everyday bank card by offering an extensive range of additional features.  However, it’s important to take a deeper look into the costs being charged by the provider before making a decision.


Some costs charged by Travel Currency Cards, which don’t exist with your everyday bank card, include:


  • Monthly inactivity fee – If you choose to let your currency card sit idle once you return from overseas, some providers may charge a monthly inactivity fee. This fee can be as high as $5 per month.


  • Closure fee – To avoid the monthly inactivity fee mentioned above we see many people simply close their travel card upon returning. However, some providers will charge an account closure fee.  Not only does this add to the overall cost of having the card, but it can also be a nuisance if you have only a small amount remaining in your account.


  • Reload fee – Most providers won’t charge you a fee to initially set up your card and load money, however some charge a percentage or fixed dollar fee to reload your card. This may affect you if you didn’t initially load enough for your trip or you reuse the card for another holiday.


  • Card establishment fee – Some international currency card providers will charge a fee to open an account and load money. It may be a flat fee or a percentage.



Other common fees charged by Travel Cards and domestic bank cards alike include:


  • International Transaction Fee (AKA currency conversion fee, foreign transaction fee, cross country conversion) – This fee is charged where you make a purchase or cash withdrawal in a currency that is not supported or insufficiently loaded onto your travel card. This fee varies significantly between providers though generally ranges between 2-3% of every purchase.  It should, therefore, go without saying, choose a card that does not charge international transaction fees, and if it does, be sure that you load an adequate amount of each currency you plan to use.


The alternative, your everyday credit or debit card, will be denominated in Australian dollars meaning you are charged an international transaction fee on every transaction during your holiday.  You may have seen this on your bank statement if you recently purchased something from overseas.   This is where a currency card has the comparative advantage to an everyday/credit card.


  • Foreign ATM Fee – While Australian banks have recently done away with the $2 ATM fee, your bank (including international currency card providers) may still charge a similar fee for withdrawals from a foreign bank. If you plan to make regular cash withdrawals from ATM’s while abroad, this may be costly for you.


Pro tip: Before heading overseas check with your bank regarding whether they charge foreign ATM fees or International Transaction Fees.  ING, for example, does not charge foreign ATM fees or transaction fees, and some Australian banks have international alliances which can help you avoid this cost.  For example, Westpac customers will not pay an ATM fee when withdrawing from a Deutsche Bank ATM in Germany, or Bank of America ATM in the states.  Look into your specific bank.


Our Thoughts and What Members of the Team Use:


On face value, Travel Currency Cards offer peace of mind and certainty.  However not all cards are created equal, and we suggest clients thoroughly inspect the Product Disclosure Statement of any prospective card to see what additional charges may be payable.


Generally, those providers who charge fewer fees have worse currency conversion rates and vice versa. Either way, you will be charged handsomely. It is, for this reason, we do not see international currency cards as appealing as they may seem.


Instead, many of the advisers in our office use their everyday bank cards when heading overseas.


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  1. Helen Miller on April 25, 2018 at 7:34 am

    Great info
    Thanks Courtney

  2. Malcolm Wright on April 25, 2018 at 8:50 am

    People should also be aware that the spread from buy to sell for funds loaded onto a Travel Card is around 10%, so any money not used and redeemed after travel incurs a 10% loss. If you over estimate the money needed and overload the card, the cost can be significant and outweigh any of the other costs associated with the card purchase and use.

    • Courtney Robinson on April 27, 2018 at 9:04 am

      Thanks for the response Malcolm, that’s a valid point you make there. No matter what type of card you use overseas, domestic or travel card, your provider will always offer an exchange rate that is below what is published on the news every night – some are better than others. And as you’ve pointed out, if you have a travel card with unused foreign currency, they will offer you an even lower exchange rate to buy it back. This is where you can get caught out with travel cards.

  3. Hannelore McPherson on May 10, 2018 at 6:14 pm

    Hello everyone, we have been to many and varied countries, and usually use our eftpos or credit/ credit debit cards . We used a travel cards for the first time last year in Norway.As you have stated fees can be high and some atms charge a fee while others might charge a percentage. In countries like Burma/ Myanmar, Cuba etc it often pays to take a reasonable amount of cash, usually Euro or US, making sure the notes are in very good condition. Some have had experiences of notes being rejected in banks for exchange. Also countries like Japan hated credit so it was difficult to find Atm’s But I think that is different now. Also remember in small country towns many businesses will only take cash . No matter what your choice and if the fees add up, just remember, how lucky we are to travel. And by the way, I always told my customers NEVER have all your cards together, but did not follow this advice myself and had a wallet stolen, the 2nd day of a 5 week holiday.
    Cheers and Happy Travelling

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