If you’re about to set off overseas, you’ve likely spent hours researching destinations, activities and shopping hotspots, and slightly less time researching the best options for accessing and spending your money abroad.
Travel money picture from Shutterstock
The beauty of travelling with a debit card is you’re less tempted to spend excessively like you might with a credit card. If it’s your main bank account you’ll be more diligent before booking that scenic helicopter ride. But taking the debit card associated with your main bank account does make you more vulnerable in the event of any fraud or card cancellations, which could impact you when you’re back home.
In saying that, our researchers found debit cards are the lowest cost option for accessing your money abroad, down to the fact that most don't charge for in-store purchases and have competitive exchange rates and transaction fees - if at all. For frequent travellers in particular, it could be well worth switching to one of these travel-friendly debit cards.
Mozo's picks of the best debit cards to travel with are:
- Citibank Plus – no foreign currency transaction fee and no fee to use ATMs overseas
- RAMS Action – no foreign currency transaction fee
These are the two cards which offer the best value when taking a representative basket of two currencies overseas, making four ATM withdrawals and 10 purchases. We also took withdrawal, purchase and transaction fees into account to find the best.
Credit cards may have lost some ground to debit and prepaid cards in recent years but they still provide good benefits for travellers, like rewards points, extra protection when overseas, complimentary travel insurance and speedy card replacement services. But these services can come at a cost, by way of high interest rates, not-so-competitive foreign exchange rates and pricey cash advance fees.
The real appeal of a credit card can be for that last minute flight change or emergency where you need to put expensive items on credit. That same benefit can turn into a nasty surprise if your card is stolen but this is where those card protections come in to their own.
Mozo's picks of the best credit cards to travel with are:
- Bankwest Zero Platinum – no annual or foreign transaction fees plus free travel insurance with unlimited medical, unlimited cancellations and $10k of luggage cover.
- 28 Degrees Platinum MasterCard - This card also doesn't have an annual fee and doesn't charge for overseas purchases.
Prepaid travel cards
The best thing about pre-paid travel cards is your ability to lock-in an exchange rate before you go, which can be particularly handy if your destination's currency fluctuates. Most cards also allow you to load several currencies on the one card, which means you're not paying multiple exchange fees if you're on a multi-city word tour. The other benefit is, like a debit card, it's a great way to stick to your travel budget.
For all their benefits pre-paid cards can be the most expensive travel money option once you've taken load fees and card closure fees in to account and travellers need to watch out for the uncompetitive foreign exchange rates of some of these cards.
Mozo's experts looked at taking two currencies overseas on a pre-paid card, making two ATM withdrawals in each currency and making purchases to exhaust the balance and pay any closure fee.
Mozo's Top Pre-paid Travel cards are:
- OzForex Travel Card - for its competitive foreign exchange rates
- NAB Traveller Card - there's no purchase fee and no fee for ATM withdrawals
Once you've packed the best value plastic for your travel money needs, follow these tips to keep it safe and avoid any hitches.
- Avoid ATMs in busy areas where wandering eyes or hands are harder to spot,
- If you think your retailer's card machine looks a little odd or pre-historic… like it may be fitted with a skimming device, consider using cash instead.
- Always take a few options for payment beyond your main card – fraud, losing your card or it not being accepted could leave you stranded if you don't have a back-up.
- Keep your various travel money options in different places – luggage, wallet or with your travelling companion.
Kirsty Lamont is a director of Mozo.com.au which helps Australians compare and save on credit cards, home loans, insurance and other financial products. Kirsty was one of the launch team for Virgin Money when it started in Australia in 2003, and also held a senior role at BankWest before joining Mozo in 2007.