Strike a balance ... it's not easy weighing up the best travel card option for your particular needs. Photo: Greg Bakes
What it is Travel cards are an alternative - often a cheaper one - to using your own debit card or credit card while on holiday. Specialists such as Travelex have issued them for some time and have been joined in recent years by the likes of the ANZ and the Commonwealth Bank of Australia.Following in those footsteps is the American Express GlobalTravel Card, a prepaid card that can be loaded with the US dollar, the euro or the British pound.
As well as being available through American Express foreign exchange outlets, the card is sold through Australia Post.
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How it works For a fee of $15 you receive a card (and a back-up) you can load with the currency of your choice. The card can then be used for store and online transactions outside Australia or to withdraw money from overseas ATMs wherever a standard American Express card would be accepted.Pros The advantage of a travel card is that you save on what can be punishing transaction costs when you use your personal cards for purchases overseas. With a card such as GlobalTravel, paying for goods or services is fee-free.
The other potential advantage is that you get to lock in your exchange rate now - you get the rate prevailing on the day you load the card with money. In contrast, you'll get the rate prevailing at the time of each purchase or withdrawal if you use your personal debit or credit card overseas.
But locking in the rate is only an advantage if your view is that this is as strong as the Australian dollar is going to get against the currency you're buying. If you think it could rise even higher, you might not want to lock in but wait for the further gains.
That said, currencies are notoriously volatile and hard to predict, so you might consider certainty an advantage in itself.
Amex says a specific advantage of its card is access to its 24/7 emergency assistance, which you might not get with other cards or to a more limited extent. It also provides emergency cash, at no extra fee, while a lost or stolen card is being replaced, when some others charge or don't have this service.
Emergency card replacement is free, when some other cards charge a shipping or replacement fee in the order of $35 to $40.
A big difference is that funds on the GlobalTravel Card never expire, whereas any leftover money is forfeited if you don't withdraw it before expiry on other cards - usually a year after the last transaction on the card. Amex doesn't levy an inactivity fee either.
Another plus is that the 1 per cent fee for reloading a GlobalTravel Card (which you can do online via Bpay) is capped at a maximum charge of $10, whereas other cards skim off 1 per cent whatever the reload amount. If you suspect you'll be reloading sums above $1000, you'll be better off with a $10 cap.
By the way, any amateur currency speculators among you should note there's a $30,000 annual limit on how much you can load or reload on all the Amex GlobalTravel cards you hold.
Cons The GlobalTravel Card costs up to $15 to buy, which is in line with the CBA Travel Money Card but is higher than the ANZ Travel Card at $11.
Also, other cards have more extensive currency options so you will be forced to turn elsewhere if you need something outside the three most popular denominations - New Zealand dollars, for instance.
Amex has stuck with providing just one currency per card.
The CBA, meanwhile, offers multiple currencies on the one card, which may suit some travellers better.
And then there's the question of acceptance. While Amex is globally recognised, some merchants don't accept Amex cards because its merchant fees tend to be higher than others' fees.
You might also strike merchants who won't accept the GlobalTravel Card - and similar cards - because they don't have your name embossed on them.
Amex acknowledges in its product disclosure statement that ''some merchants who accept American Express Cards may not accept the card''.
All travel cards charge a fee for ATM withdrawals - usually between $2 and $2.50 - and this will be in addition to any fee charged by the ATM's owner.
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