Unfavorable foreign exchange rates have put many of us off from travelling abroad to the United States or the Eurozone, but there’s a well-kept secret that’s becoming increasingly popular from a financial and practical perspective: travel money cards.

What’s a travel money card?

These cards are fairly modern additions to the cards that are available out there, and they provide you the ability to place a certain amount of a specific currency on the card at a predetermined exchange rate, so that you have instant access to funds when you travel.

You can apply for these cards on the providers’ websites online, and the transfer of funds to the card can be made on the phone, the internet, or through SMS services, in some instances. At this time, only the pound, euro, and U.S. dollar can be uploaded onto currency cards.

So what are the perks of using this card?

Importantly, the rate of exchange is usually higher than you’ll find in a typical foreign currency exchange office. Also, the exchange rate is fixed in stone at the time you upload money to the card — so when you spend while travelling, you already know what it’s costing you. This is vigorously different than credit and debit cards, which use an exchange rate that’s dynamic — whatever the going rate is at the moment you use the card.

So is that all there is?

Not at all. When you use a traditional credit card or debit card to make a transaction abroad, you are typically charged around 2.75% of the transaction as a fee for the foreign currency exchange.

These foreign currency exchange fees also apply in shops and eating establishments; however, a travel money card does not have these associated costs. The rates charged for taking out cash with a credit or debit card can be very high, but since you have prepaid the amount on your currency card, it is not a loan, and there are no fees for the service.

That is great news! Now, what are the possible drawbacks?

Since you are uploading cash onto the card in advance to your trip, your holiday is paid for up front, not with credit, so you must save for your trip. But, that may not be a disadvantage in the current market. Currency cards do have fees for requesting cash from ATMs, but the associated fees are much less that those incurred with credit or debit cards.

One example of this is that, when this article was written, NatWest and RBS both had a withdrawal fee of two percent, which amounts to about 6 each time you withdraw the sum of 300. Currency exchange cards, however, have a flat fee that amounts to as little as 1.50 no matter how much your ATM withdrawal is.

The real downfall for you is the fee you’re charged for using your card to pay for something in a currency other than one fixed - and FX convert fee; using the example of a dollar transaction which is made with a euro currency card, you could be paying a fee of up to 2.75%. However, there are a number of cards that don’t charge this fee (see list below).

What about credit cards that can be used without FX costs?

Traditional credit cards like Post Office, Nationwide Gold, and Abbey Zero fit into this type of cards. The first two cards, though, have 2.5% withdrawal fees for cash with a minimum charge of 3 per transaction, even though they don’t carry FX costs. This isn’t better than a travel money card, unless you don’t have the cash upfront for your travels.

There are no cash withdrawal or FX fees linked with the Abbey card, however, which makes it the favoured credit card. Cash withdrawals do carry very high interests rates, though, which are at 25.9%; the cash withdrawal interest rates with Post Office and Nationwide are 20.83% and 22.9%, respectively.

Keep on going, I’m convinced! So what are considered the best travel money cards out there?

The FairFX Euro Currency card is known to be the best among the euro cards right now due to having the lowest ATM charges at 1.50 with a 0% convert fee, with excellent exchange rates. While the Indigo Travelcard Euro has a fairly low ATM fee at 1.95, it also has a higher convert cost of 2.75%. Then there is the ICE Travellers CashCard Euro which has a high 3, but you have no convert fee.

When taking into consideration dollar cards, again, FairFX is the top deal, as the currency card charges just $2 for ATM transactions, and it doesn’t have a convert fee. Another good deal for dollar cards is the ICE Travellers CashCard, because it does not have a convert fee, and the cost for ATM transactions is just $3. Keep in mind that when there is no convert cost, the cards can be used for any available currency.

What’s the best travel money card for world travel?

An ‘Anywhere Card’ has just been lauched by FairFX as a new global travellers card - an ideal card to take anywhere in the world.

The are no ATM costs with the FairFX Anywhere Card, and no loading fees either! A 1.5% transaction charge is the only fee that applies so it certainly appears to be the cheapest global travel money card on the market.

Currently, FairFX is offering a free dollar, euro or sterling ‘Anywhere Travel Card’, which usually costs 9.95, for a very small initial load. Why are you dragging your heels? Save more by getting a travel money card from FairFX travel money exchange today!