Adventure awaits! You’ve booked to go somewhere exotic and you are excitedly packing your bags. Are you debating getting pre-paid cards or travellers cheques? Well, you might be better off getting good travel debit and credit cards, as with these you will pay less in fees and you will have MORE money for your travels. Let me explain…
Ultimate Travel Money Guide
We’ve compiled a whole load of comprehensive blogs focusing on travel money. What are the best travel debit and credit cards? How do I avoid money changer scams? What are these international bank fees I keep getting on my card whilst travelling? We are here to offer tips and guidance on managing your money whilst travelling. In this blog we focus on pre-paid travel cards and travellers cheques.
Pre-Paid Travel Cards
What The Heck Are Pre-Paid Travel Cards?
These are cash cards that have already been topped up in a certain currency. You can then use them to take money out and make purchases whilst you are away.
They work a bit like a pay as you go sim. You top-up when you run out of money (usually a few hundred pounds at a time). They have the benefit of limiting how much money you could lose if you lost your card as somebody could only access the amount you have remaining on the card.
You can get pre-paid travel cards in a specific currency for the country you are visiting. This is a bit of a pain if you are going to multiple countries.
You can also get cards in 1 major currency like US dollars that can be used in lots of countries and the currency conversion will take place at the point of sale.
Currency Exchange On Pre-Paid Travel Cards
For single currency cards, you carry out the currency exchange at the point of top-up, meaning you are locking in a rate of exchange in advance. This is good if your currency weakens, bad if it strengthens, but you have the certainty of a fixed rate.
However, you can use Revolut and TransferWise to lock in a rate of exchange in advance to provide some certainty. So it’s not only pre-paid cards that offer this feature.
Pre-Paid Travel Card Fees
Like debit and credit cards, these cards can still incur local ATM fees and any commission the merchant may add for the privilege of using a card instead of cash.
Remember, always always always research free ATMs in the countries you are visiting. You wouldn’t use one of those crappy ATMs that charge you £2 at home, so don’t do it whilst abroad!
However there are usually other fees associated with pre-paid cards. These will vary by provider and by card. You may be charged a fee to top-up your card and you may also be charged a commission on the exchange rate.
A Smarter Option: Travel Debit Cards
Given these pre-paid travel card fees, you are better off with a debit card that does not charge international fees.
I effectively use my travel debit cards like pre-paid cash cards anyway. Topping them up only when I need to, limiting the amount I could lose if I lost my card. Thus, you can have the benefits of having a cash card, without wasting your money on bank fees!
What The Heck Is A Travellers Cheque?
Travellers cheques are similar to pre-paid travel cards.
You can buy them either in a single currency for the country you are visiting (with the currency exchange happening at the point you buy them) or a major one like US dollars that can be converted at the point you use them.
Travellers cheques offer a bit of protection in that you need to often show ID to use them. They can also be replaced if lost or stolen.
But if you are going away for a long time though, you really don’t want to be carrying a massive stack of travellers cheques around.
They Are Hard To Spend
Travellers cheques are becoming less easy to spend in shops, restaurants and hotels. Although you should still be able to change them up for local currency in banks.
Travellers Cheque Fees
Like with pre-paid travel cards you may be charged at the point of purchasing them and at the point of currency exchange if you are carrying cheques in a major currency.
You will also find that where they are accepted a merchant or bank will probably charge a commission to use them. Hmmm, not so great!
A Smarter Option: Travel Debit and Credit Cards
So apart from maybe carrying some for use in an emergency, I would again stick to good travel-specific credit and debit cards. With these you will avoid unnecessary fees and have more money to spend on travel! I know what I’d rather spend my money on 🙂
Explore More In Our Ultimate Travel Money Guide:
7 Travel Money Mistakes You Are Probably Making
Credit Card Or Debit Card: Which Should I Take Travelling?
Travel ATM Fees: Stop Wasting Money At Foreign ATMs
7 Fees Banks Charge You When Travelling (And How To Avoid Them!)
Best Travel Debit Card UK: Don’t Waste Money Whilst Abroad
5 Best Travel Credit Cards UK: Stop Throwing Your Money Down The Drain
Best Travel Debit and Credit Cards USA: Are You Focusing On The Wrong Thing?
A Debit Card & Credit Card Combined: Honest Review Of Curve Card
Travel Money: Are Credit Card Reward Schemes Worth It?
Be Travel Money Savvy: Pre-Paid Travel Cards and Travellers Cheques Aren’t Worth It
These posts are up to date as of July 2019 and will be updated periodically. Always check with the companies mentioned and keep an eye out for new ones I haven’t mentioned. I’ve mostly focused on all things UK based. Feel free to get in touch with me if you have any tips from your country you would like me to include.
This is what I’ve found to be suitable for our needs. Yours may differ and so the Ultimate Travel Money Blogs can only be taken as a guide rather than constitute personalised financial advice. Please get in touch if you have any specific questions and I will do my best to answer them.