Because of the awful foreign exchange rates, a lot us in the UK have been changing or cancelling any plans for travelling to the States or the Eurozone, however there is now something available that will help reduce the potential damage to your budget: travel money cards.
How do travel money cards work?
These cards were lately introduced to the card market and will offer the option of uploading whatever currency you choose to a plastic card, at whatever the present rate of exchange is, and is your holiday money for whatever destination you’ve chosen to holiday at.
You can purchase these cards on the providers’ websites online, and the transfer of funds to the card can be made on the phone, the internet, or through SMS services, in some instances. At this time, only the pound, euro, and U.S. dollar can be uploaded onto currency cards.
What’s the big difference?
First, you’ll find a much superior exchange rate with these cards than conventional bureaux de change, located on the High Street. You also receive a fixed rate when you have downloaded money to the card, so you can keep track of how much you’re spending each time it’s used abroad; while credit and debit cards operate on a real-time exchange rate for each transaction, so it’s hard to track your spending.
So is that all there is?
Yes – there’s more. How about no additional fees for the currency conversion? Some credit and debit card providers tack on an additional fee of around 2.75% extra on top of the exchange rate — which costs you even more.
These foreign currency exchange costs also apply in shops and eating establishments; however, a travel money card does not have these associated costs. The rates charged for getting cash with a credit or debit card can be very high, but since you have prepaid the amount on your currency card, it is not a loan, and there are no fees for the service.
That is great news! Now, what are the possible drawbacks?
Well, since the cards need to have money transferred to them before you take off, you might find yourself having to save up for your trip, instead of just relying on your credit cards. However, considering these economic climate that’s not such a bad thing, is it? Another trivial drawback is the charges required for ATM withdrawals, but the good news is those fees will be a lot lower on these cards than on credit or debit cards.
One case of this is that, when this article was written, NatWest and RBS both had a withdrawal fee of two percent, which amounts to about 6 each time you withdraw the sum of 300. Currency exchange cards, however, have a flat fee that amounts to as little as 1.50 no matter how much your ATM withdrawal is.
The real draw back to these cards (which shouldn’t be a trouble if you use them correctly) is that you must specify the exact currency when you load the funds. If, after that, you use a dollar currency card in a euro transaction, you’ll pay foreign exchange costs up to 2.75. Of course, only some cards have this fee, while others don’t (keep reading). I’m sure some of you are asking about using the excellent foreign usage credit cards that are available instead, right?
These conventional credit cards are: the Abbey Zero, Nationwide Gold, and the Post Office. The problem that continues (i.e. the last two) is that even though they’re a great deal (no foreign exchange fees), they have cash withdrawal charges of 2.5% at the time of this writing (minimum 3), and don’t measure up with travel money cards (unless you’re considering credit for your holiday).
In contrast, the card from Abbey has no cash withdrawal charges no foreign exchange conversion fees,costs as always, there’s a catch — it’s got the highest interest rate of the three, at 25.9% presently.
That’s me, convinced — tell me more. Who has the best deal on travel money cards?
FairFX Euro Currency is simply the leading card on the market currently, with exceptionally fair exchange rates, a 0% fee for the exchange rate conversion, and a very low ATM charge (1.50). You’ll also find a low ATM fee (1.95) with the Indigo Travelcard Euro, but it has a high conversion charge of 2.75%.
For no conversion fee, there’s the ICE Travelers CashCard Euro… but it has a higher ATM fee (4).
When taking into consideration dollar cards, again, FairFX is the top deal, as the currency card charges just $2 for ATM transactions, and it doesn’t have a convert cost. Another good deal for dollar cards is the ICE Travellers CashCard, because it does not have a convert cost, and the fee for ATM transactions is just $3. Don’t forget that when there is no convert charge, the cards can be used for any available currency.
What’s the best travel money card for world travel?
An ‘Anywhere Card’ has just been lauched by FairFX as a new global travellers card – an ideal card to take wherever in the world.
One of the great things about the Anywhere Card is that there are no ATM charges, and no loading fees either! A 1.5% transaction fee is the only charge you’ll have – and that’s at the time of the transaction, so you don’t need to worry about exchange rates.
There’s a special offer right now with travel money card FairFX where you can get a free euro card, free dollar card or free sterling global travellers card and save the normal 9.95 setup fee (Subject to a very small initial load). Start saving on exchange rates with a travel money card from FairFX exchange travel money services today!!