Most banks and some other providers including Air NZ and Travelex offer pre-paid reloadable travel cards as one of their travel money options. Travellers quite simply load their pre-paid cash passports or travel cards with foreign currency when they leave and spend from the pre-paid balance. In most cases the conversion rate for foreign currency is locked in on the day the cash is loaded in.
Although these cards look like credit cards, they don’t offer credit. Once the pre-paid balance is gone they can’t be used until they’re reloaded – usually online.
The benefits of a travel money card
Prepaid travel cards offer travel money benefits that cash, EFTPOS or credit cards may not.
- Travel cards are safer than carrying cash.
- The cards are just as secure as EFTPOS and credit cards.
- Spending on a travel card doesn’t have the high foreign currency conversion rate fees that credit cards attract.
- Travel cards can be used anywhere a Visa or MasterCard can be.
- It’s possible to get two prepaid travel cards, meaning one can be left in the hotel or elsewhere for safe keeping in case the other is stolen.
- On some pre-paid travel cards and cash passports multiple currencies can be loaded in different virtual wallets.
- Thieves can only access the amount of money on the card, not the user’s bank account.
Fees fees and more fees
When choosing and using a pre-paid travel money card, watch out for:
- The initial fee plus reload fees
- ATM withdrawal and balance enquiry fees
- Disputed transaction fees
- Manual card closure and refund fees
- Non-use fees after 12 months
- Monthly account fees*
- Text alert fees
- Replacement card fees
- Urgent card fees
- Unsupported currency fees
What else to watch out for with your travel money card
Pre-paid travel cards have a few traps for the unwary hidden away in the small print. Some of the snares to watch out for include:
- Make sure your money is converted when it is loaded onto the card so you know your exchange rate
- Ask if foreign currency fees are charged if you need to move currencies between wallets on the prepaid travel card.
- Cash passports and pre-paid travel cards can’t be used for EFTPOS-style cash withdrawals at merchants.
- No interest is paid on wallet balances.
- Some pre-paid cards expire, meaning you have to pay to open a new one every few years.
- There are usually set minimums and maximums for the amount of money that can be loaded.
The devil is in the detail with travel cards and it’s well worth reading the terms and conditions before choosing the best card.
*At the time of writing only the OneSmart card charged a monthly fee.