Travel money card vs credit card for overseas travel. Pros and cons

Heading abroad and trying to figure out the best way to spend money? The answer to that varies depending on what you're doing so it’s best to get as much information as you can to make an informed decision.

We’re going to take a general look at two options, travel money cards and credit cards, and see how the features, pros and cons compare. We’ll also let you know about some of the Australian providers that offer these cards and a few of the main fees to be aware of.

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What is a dedicated travel card?

Usually classified similar to a debit card, a dedicated travel card allows you to load local currency (like Australian Dollars) onto it before travelling which can then be converted to another currency. As you spend money, the charges are debited from the card’s balance. Normally these cards offer a set list of currencies which varies depending on the provider and you can usually store foreign currency on the card as well as your home currency.

What is a credit card?

Credit cards allow you to spend money that’s borrowed from the bank or credit card provider. That money is then paid back within a certain time frame, with interest. Some credit cards are geared more towards travellers, offering enticing perks like travel rewards points and upgrades.

Main benefits of travel cards and credit cards for travel

Both the travel cards and credit cards have benefits that can be useful for travellers. What you get will depend on the provider, but for each type of card there are some that are fairly common.

Travel card benefits and perks

When deciding if a travel card is the way to go, here's some of the benefits for you to be aware of.

• Have multiple currencies stored on the card, ready to spend
• Opportunities to lock in an exchange rate
• Some have no foreign currency conversion or international ATM fees
• Only spend funds you actually have which helps with budgeting
• Less financial exposure if your card is lost or stolen

Credit card benefits and perks

These are some of the perks that you may be able to take advantage of if using a credit card to pay for travel expenses and spending abroad.

• Earn hotel or airline rewards points from various types of purchases
• Access to air travel perks like lounge access or elite status
• Gain a higher hotel loyalty program status
• Opportunities for cashback
• Get complimentary travel insurance for eligible trips
• Welcome bonuses when you open a credit card account

Cons of travel cards and credit cards for travel

Looking on the flip side of things, there are also some negatives to using either a travel card or credit card for your expenses.

Travel card cons

These are some of the drawbacks you may face with a travel card.

• There can be fees to reload the card
• The exchange rate may have a profit margin built
• If your balance runs out you need to reload the card using whatever system the provider has in place
• Inactivity fees can sting you in between trips
• There can be minimum and maximum limits that may not fit with your plans

Credit card cons

For credit cards, here’s some of the potential cons to consider before signing up.

• Some travel orientated credit cards charge an annual fee
• There can be credit score or income requirements
• May not be worth it if you’re not a frequent traveller
• Interest is applied to your purchases, increasing costs
• There may be additional fees for withdrawing cash or spending in a foreign currency

Who offers travel reloadable cards

There are a number of providers in Australia that offer reloadable travel cards. Here’s a few options to get you started.

• Westpac Worldwide Wallet
• Commbank Travel Money Card
• Australia Post Travel Platinum Mastercard
• Qantas Pay
• Travelex
• Travel Money Oz

Who offers travel credit cards

In Australia credit cards can be issued by banks as well as other providers who have authorisation from ASIC to offer this service. These are a few of the companies who have travel credit cards available for Aussies.

• Westpac
• Bendigo Bank
• Bankwest
• American Express
• Qantas
• Coles Rewards Mastercard

What are the usual requirements for getting a travel card?

What you’ll need to provide to get a travel card will vary depending on the provider and whether you already have another account with them. Some of these cards can be bought directly from the bank or provider and be ready for use in minutes.

Here’s an idea of what you may be asked to provide.

• Full name and date of birth
• Residential address and contact details
• Drivers licence or passport for identification

What are the usual requirements for getting a credit card?

To get a credit card the requirements can be more stringent than a travel money card. Often they want to know about your financial history since the money you’ll be spending is borrowed.

• Aged over 18
• Full name and date of birth
• Australian residential address and contact details
• Provide documents to pass the identity check
• Proof of income
• Credit history check
• Information on your current debts

A word on fees and exchange rates

When considering a reloadable card or credit card for travel purposes there’s a few different fees to look out for. Usually these will be outlined in a fee schedule or product disclosure statement.

International transactions

Some providers charge additional fees for card transactions that take place outside of Australia or in a foreign currency. Ideally you want a travel card with no or minimal international transaction fees.

ATM withdrawal fees

Another fee to be aware of is ATM withdrawal fees. These can be charged as a percentage fee, flat rate fee or combination of both. Being aware of if there are ATM withdrawal fees and how they’re structured can help you decide how often you want to make cash withdrawals and in what amounts.

Exchange rates

In general the fairest foreign exchange rate is considered to be the mid-market rate. This is the mid-point between the buy and sell prices for currency on the foreign exchange market. When using a credit card or travel money card, you want to examine the exchange rates they offer and compare them to the mid market rate. Sometimes providers will include a profit margin in the exchange rate as an additional way to make money, or in lieu of charging transaction fees.

What else do I need to know?

When choosing an account or card to manage your money while travelling make sure you read the PDS or fee schedule carefully to make sure you understand the limitations and potential charges. Also it’s worth finding out what their customer support is like in case you run into an issue while abroad.

Travel with Wise

With a Wise Account you can hold money in 40+ currencies and spend it in 150+ countries. You can also order local account details in popular world currencies like AUD, NZD, USD, EUR, GBP to receive local and/or international payments like a local.

Whenever you exchange currencies it’s done using the mid-market rate with a transparent conversion fee shown upfront.

To make everyday spending easier you can order a Wise Debit card for your Wise Account and generate virtual cards as needed. If you have the local currency in your Wise Account the Wise card will use it. If you don’t have local currency converted, it uses smart technology to auto-convert your money at the mid-market rate, for a conversion fee.

The Wise card may suit you better if you’re to spend money that you’ve stored in different currencies within an existing Wise Account, and benefit from 2 or less free cash withdrawals under $350 AU, or foreign equivalent, per month (keep in mind that ATM providers may charge their own fees). You can see our full fee breakdown for ATM withdrawals here.

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Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information.