Prepaid travel money cards

What is a prepaid travel money card?

A prepaid travel money card is a debit card that allows you to add money and converts it into several types of currency that you can spend when traveling. This ultimately allows you to spend overseas without paying a currency conversion fee. Before traveling to your destination, make sure your card supports the local currency to ensure you’ll benefit from its features.

Prepaid travel cards also let you lock-in exchange rates before you travel. By knowing exactly what exchange rate you’re getting and how much money you have on the card, you’ll be able to budget more efficiently.

Is a prepaid travel money card right for me?

A travel money card might be a good option if you want to:

• Visit a country whose currency is available on the prepaid money card.
• Avoid fees, including the currency conversion fee and the foreign transaction fee.
• Lock in your exchange rate before traveling.
• Preload a debit card that is separate from your personal banking accounts.
• Have an acceptable form of non-cash payment.

Pros and cons of prepaid travel money cards

Here are a few advantages and concerns with using a travel money card on your next trip abroad.

Travel money card fees and how to avoid them

Take a look at several fees associated with travel money cards and a few hacks to reduce or avoid them entirely.

Load fees

You may be charged a fee when you load funds on the card.

• How to avoid them:

These fees are generally unavoidable and written into the card’s terms and conditions. The best way to minimize the charge is to load larger amounts at a time and keep the number of reloads to a minimum.

ATM withdrawal fees

Depending on the card, you may be subject to this fee when withdrawing money. Remember that local ATM fees may still apply.

• How to avoid them:

Skip the charge by using your prepaid travel money card for card transactions only, and avoid withdrawing money from your account at international ATMs.

Inactivity fee

If you’re not using your card, the provider might charge a monthly fee for maintaining your account following a period of inactivity, usually 12 months.

• How to avoid them:

If you want to keep your account active, make a small transfer or purchase before 12 months of inactivity. The last thing you want is for your remaining funds to be slowly devoured by the monthly inactivity fee. Read our guide on how to claim your remaining travel card funds.

Currency conversion fees

When you complete a purchase overseas in a currency that isn’t loaded on your card, you’ll be hit with a currency conversion fee.

• How to avoid them:

This cost is completely avoidable if you load the foreign currencies on your card before you travel, and it typically only takes only a few seconds. If you don’t load the currency before the transaction, you’ll get hit with a hefty fee that’s about 3% of the charge. In order words, for a $1000 transaction, it’ll cost you an extra $30 just for missing the currency loading step.

Account closure fees

When you close your travel money card, you may find that you’re charged an account closure fee.

• How to avoid them:

There’s really no way to avoid this cost, unless you exhaust all of your funds on the card. Then you won’t have to worry about the fee for closing your card to get your remaining balance back.