Yahoo Finance The cheapest cards to access money when you are travelling overseas
If you're heading overseas, these travel cards will help you access your money cheaply.
Heading away this Easter? Then it’s time to think about the easiest and cheapest ways to get your travel money. And there is one clear winner.
Yahoo Finance asked Canstar to scour all the new product options to access money overseas – across pre-loaded cards, and debit and credit cards – and find the best one for you.
Here's how they stack up.
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Option 1: Travel money cards
These cards, around for more than a decade now, are essentially purpose-built-for-travel debit cards. Like any debit card, they enable you to spend your own money but, unlike debit cards, you pre-load them with already-converted foreign currency - or currencies, if you’re travelling through multiple countries.
One of the big advantages is the ability to keep watch and then lock in a good exchange rate ahead of leaving: you have the flexibility to buy a pre-paid travel money card whenever you want before you jet off. But the terms and conditions can vary greatly, so it’s vital to know what you are buying.
Also by Nicole Pedersen-McKinnon:
According to Canstar’s latest Travel Money Cards Star Ratings and Awards, Revolut and Wise provide the most cost-competitive options in Australia. This is in large part because both providers offer exchanges at the interbank rate, potentially saving you currency-conversion costs that might apply to other travel money card options (the interbank exchange rate is the rate banks use when trading foreign currency between each other).
But the transaction fees charged by Revolut and Wise are also low because they have efficient digital platforms to complement their debit cards. This makes it easy to log in and manage your travel money card while abroad.
However, Canstar’s analysis notes: “Interestingly, the majority of travel money cards rated in our latest Travel Money Card Star Ratings & Awards do not charge any fees for unloading money, closing a card/account or card inactivity.”
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Option 2: Travel credit cards
The next thing to note is that your everyday credit card is not usually a good option when you are travelling overseas. Instead, one of a new breed of dedicated travel credit cards will be better.
Below are the top four travel credit cards as rated by Canstar, based on one trip overseas and assuming $5,000 is spent across 60 transactions.
“To determine the net cost/benefit of a travel credit card, we consider how much will be available to the cardholder for spending on their trip, after fees for owning and using the card are subtracted,” the research said.
Just remember, as with regular credit cards, you will pay interest if you are not in credit and withdraw cash, from day one.
Option 3: Travel debit cards
Then there are the debit card options – for you to load up before you go – that are favorable if you are about to fly out. To determine this leaders’ list for us, Canstar again based its analysis on one trip overseas and $5,000 spent over 60 transactions.
While the below table is sorted alphabetically, you can see that Bankwest, HSBC, Macquarie Bank, ME, Suncorp Bank, UBank and Up charge neither currency-conversion fees nor international transaction fees. (Great Southern Bank and ING do, however, rebate some fees under certain circumstances).
The options are far better than they used to be.
So, what is the best overseas travel money solution?
If the exchange rate is volatile – as they have been in recent times – and you want to lock in what you consider a good rate before you go, today, there is no beating a travel money card. They both aid with budgeting and help ensure you reserve enough money.
Just try not to load them with more than you need because it's not always straightforward to get the money back off a card. And, whatever method you choose to access currency, follow the three golden travelling rules to ensure you are not caught without access to a payment method, and that you pay the least possible while ‘on the ground’.
1. Take some cash in the currency of your destination, along with your low-cost digital-currency option, just in case the technology fails you.
2. If you find you need extra when you get there, look for ATMs that are connected with your bank to avoid a local owner’s fee as well as paying your bank’s fee for using an ATM outside of their network.
3. Always choose to pay – whether in cash or on card - in the local currency. That’s how you will usually secure a better exchange rate than the local retailer or bank will apply to your purchase.
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, Twitter and Instagram.
