How to pick the best travel money cards

Mogens JohansenThe West Australian
Close up female hand and levitating bank credit card.
Camera IconClose up female hand and levitating bank credit card. Credit: Francesco Carta fotografo/Getty Images

It can be stressful and confusing to stay on top of constantly changing exchange rates and bank fees when you travel overseas. Particularly if you need to juggle different foreign currencies.

There’s a myriad of products that can make it easier to manage your travel money when overseas — but finding which one suits your needs best can be confusing and time consuming.

While there’s no denying the convenience of a credit card when travelling overseas, associated costs like foreign transaction fees, conversion fees, cash withdrawals fees and ATM fees can quickly add up and give you a nasty surprise when you check your statement.

Thankfully there are other equally convenient ways to manage your spending money.

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A debit card attached to your bank account, a prepaid travel card like a Travelex Money Card, or a foreign currency account can save you lots of fees and foreign exchange rate surprises but you still need to do a bit of homework to find which of them will suit your needs.

hands counting foreign currency. Many world currencies shown
Camera IconHands counting foreign currency. Many world currencies shown. Credit: Peter Cade/Getty Images

We came across some new research from financial comparison site Mozo that shows you can save hundreds of dollars by planning ahead and choosing the right travel money card before hopping on a plane.

Mozo’s research found that travellers planning a trip to the United States, the United Kingdom or Europe, could save hundreds of dollars by opting to use a foreign currency account.

This type of account is useful for travellers who need access to more than one type of currency, because they provide easy access to several different currency options and have low conversion rates and fees.

The research showed foreign currency accounts offered the best exchange rates for travellers converting Australian dollars into American dollars (USD), British pounds (GBP), and European euros (EUR). Their exchange rates were roughly 5 per cent less than those on prepaid travel cards when looking at USD, GBP and EUR.

On a balance of $10,000 that equates to a saving of $311 — and that can pay for an overnight stay in a good hotel.

If you don’t want to open a dedicated foreign currency account or use a prepaid travel card, Mozo research shows there are still ways that travellers can save hundreds of dollars if they plan ahead.

Opening a transaction account with no monthly account keeping fee that has a debit card can provide competitive exchange rates via Visa and Mastercard, but travellers should make sure the accounts also charge no currency conversion fees and no overseas ATM fees.

Rachel Wastell, Mozo’s personal finance expert, says while most debit cards can provide competitive exchange rates, travellers can get burned on high currency conversion fees and overseas ATM fees charges, so it’s important to compare in advance.

When comparing exchange rates on fee-free everyday debit cards, Mozo’s research showed they were almost on par with foreign currency accounts.

On a $10,000 balance, travellers with everyday debit cards that charge fees, could be paying $262 in conversion fees, and that doesn’t include the potential cost of overseas ATM fees, which cost $3.16 on average for every withdrawal you make.

You can find much more user-friendly and useful information about managing your travel money at mozo.com.au.

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