Comparing travel money options

Travelling is such a great thing and while we focus on all the fun we’ll have and the places we see, none of it would be possible without money. But have you considered exactly what you’ll do with your money when you travel? Carrying large amounts of cash is not advised because even in developed countries, there are still thieves. Carrying plastic is the most popular ways to keep your money secure and accessible overseas. While credit, debit or travel cards are a great option, they do have their disadvantages as well if you don’t read the fine print.


International transaction fees

Those who use plastic cards overseas often complain of international transaction fees. They are around 3 per cent of the amount you want to convert e.g. from AUD to Thai Baht. The difference between credit and debit cards and travel cards is that if you use a credit or debit card overseas, you pay to exchange the currency every time. Travel cards exchange the currency in a preloaded lump sum.

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Exchange rate

It is easy to focus on the low fees of the card you choose to travel with, but you may not realise that the foreign exchange rate is worse on travel cards – up to 5 per cent – meaning if you transfer $1000 AUD, it could equate to $918 on a travel card, instead of $948 on a debit or credit card.


ATM fees

Just because a card says $0 ATM withdrawals, doesn’t mean it won’t come at a cost. Sometimes you have to comprise other things to have this option, meaning it can be better if you pay a small fee and have a better exchange rate. ATM transactions on a travel card are usually between $0 and 4, while credit/debit cards can attract a $4 or $5 fee.

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Hidden fees and charges

If you choose a prepaid travel money card, fees will rack up before you know it. There is usually a joining fee, plus a percentage of the money you load on will go to the card company’s pockets and not yours. Most of us will not know how much money we will need for our holiday and if you load too little on a travel card, you’ll have to pay a fee of around 1 per cent of the additional sum you load. And if you load too much, there’s also a fee when you get home if you want to withdraw it. As if that isn’t enough, it can take up to 3 Australian business days for money to be loaded on to your card. Oh, and there’s also a fee to close the card too.


Personal story

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Our editor Emma shares a word of warning: “I recently travelled to South America and took a prepaid travel money card as well as my debit card. I loaded $100 AUD onto the card, as I was sceptical of the fees and charges. I withdrew the money during our stopover in LA and was happy about the lack of ATM fee, but when $100 AUD came to about $70 US, I was a bit upset. I didn’t use the card again and instead withdrew $400 at a time from my debit card as I needed Colombian pesos and Peruvian soles and they were not listed on the travel card (as currencies you can hold). My debit card was really no good either as I withdrew constantly and the fees racked up – $130 in total when I got back to Australia. Next time I will try to only make a few transactions and use a better debit card”.

So, be aware that if the currency you need is not listed on the currencies you can hold on your card, then it’s best to ditch the travel card altogether as it will charge a conversion rate if you try to withdraw at an ATM (from Australian dollars).


The best option

A low fee debit card is the best choice for travellers who want to keep their money and don’t want to be stung constantly with fees. Travel cards are still an option but it’s advised to do your research and load on as much as you need before you begin. If you’re smart and do your homework to find your best travel companion, you could save yourself hundreds.


When you travel, what do you use to carry your cash? Why? How has it worked out for you? Tell us below.

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.