Save on Currency Conversion: Are travel money cards worth it?

Are travel money cards worth it? There are often hidden costs, so read the fine print
No, they are not! Travel money cards are poor value and while they can seem convenient at face value, they leave you not much better off that if you had just paid your credit card international transaction fees. I have included this piece because some of the popular travel money cards such as the Qantas Travel Money card which tempts you with earning points on your spend. This is one of the few times I will tell you that the cost of the points are not worth it. Let’s look at the true cost of these cards and see how the cost adds up very quickly. What alternatives are there to spending your money overseas? One of the best options available is Wise who give you the benefit of locking in exchange rates with wholesale exchange rates. Keep reading to find out how.
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    The true cost of travel money cards

    I’ve looked at many of these cards in the past, I’ve also received some for free with various packages such as through travel agents and visa offices. They’re always promoted at being able to save you money. Let’s look at some of the offers on the table and hopefully you’ll see this as well.

    Qantas Travel Money card

    I’ve chosen this one first because a lot of people already have this card. It is an option you can select when getting your Qantas frequent flyer card and the sign up cost is free. It is also quite tempting promising 1.5 Qantas points for every $1 you spend in foreign currency and ‘competitive exchange rates’. This is clue number one, this is a fairly high points earn for a card, so why would they just give you this?
    A summary of the fees shows a promising card. No fees for purchases, cash out, no currency conversion fee, no loading fee (as long as you use a bank transfer or BPay) and a $1.95 international ATM withdrawal fee. While the ATM withdrawal fee could be more competitive, the rest sounds pretty good. When comparing these cards the key is to look at the currency exchange rate. This allows the provider to disguise the fee as the rate they offer you has a built in spread. For example on the day of writing Qantas let you convert AUD to USD at a rate of 1 to 0.6398. The current wholesale rate is 0.66199. This means you are paying the equivalent of 3.3% fee for currency exchange! For reference, the standard credit card will charge between 2.5-3%.

    Other travel money card providers

    Other providers offer similar rates but vary slightly in their offering. For example Travelex allows you to withdraw at international ATMs with no fees but of course you don’t earn points. You also still need to pay more than 3% to convert the currency. All of these cards also offer the ability to convert to other currencies before you travel. Unfortunately while this gives you certainty on the exchange rate, it means when you go to convert the left over money back at the end of you’re trip you need to pay another 3% to get it back!

    So is there a cheaper alternative?

    Yes, there are definitely cheaper alternatives to these. As we’ve seen, despite a lot of claims to the contrary, the hidden fees fall into the currency exchange rate used. I believe a good baseline exchange rate to use is as they are a reputable company and give accurate wholesale rates. We will compare all of the options with this rate.

    For when you want to go cashless

    How to churn credit cards and maximise your points to burn
    When you want to go cashless I recommend using a credit card with no international foreign transaction fees. There are many of these products available in Australia but there are a couple which stand out from the rest. To me a credit card in this context has a few benefits over a normal debit card with no international transaction fees:
    1. You often get free travel insurance with a credit card
    2. You can take advantage of the interest free period with a credit card
    3. You are using the bank’s money instead of your own which means if you have a disputed transaction you aren’t out of pocket until the investigation is completed by the bank
    4. If you rent a car or stay in a hotel, the deposit is taken off your credit limit instead of out of your own funds (again meaning you aren’t out of pocket) – in addition to this, a lot of car rental places require a credit card and won’t accept debit cards for holds.
    For this reason I would suggest, if you can have a credit card to take with you overseas and use that primarily instead of your debit card.
    The ideal credit card would have no international transaction fees and at the same time also earn you points. Ozbargain have a very thorough list of cards with all the positives and negatives. I personally use the 28 Degrees Mastercard which offers a no annual fee card and no international transaction fees. Although it doesn’t earn points I can forget about it due to the $0 annual fee and I don’t have to constantly re-evaluate if paying the fee is worth it. These cards are becoming more and more common and you might be able to get a free card through your bank for example Macquarie has no international transaction fee on their credit cards. If you have a mortgage through them you pay no annual fee and get points.
    So what currency exchange rate do you get with these cards? They usually use the Mastercard or Visa exchange rate that is published daily on the website. To offer a point of comparison, for today the Mastercard rate is 1 AUD to 0.6708 USD and the visa exchange rate 0.671 (compared to the 0.6619 on The difference between the rates can be explained by by the Visa and Mastercard rates being updated daily while updates in real time. The point here is the Mastercard and Visa exchange rate is basically the same as the wholesale rate saving you about 3% immediately if you have the right card.

    What about if you need cash?

    Historically the best ways to get foreign cash would be to exchange your local currency either at home or abroad. This would come with about the same 3% (or worse depending on where you exchange money) each time you convert so it’s a constant game of working out how much money you need to convert so you aren’t left with any at the end, otherwise you’re again hit with the fee in reverse. To make matters worse if you are using AUD and travel to somewhere less conventional such as Africa and South America, you may struggle to find a place that accepts your AUD to convert into local currency. This means you need to convert your money to USD or Euros before leaving and then convert them again to local currency meaning you’re hit with the fees twice.
    There is a way to avoid this double whammy of fees and let you keep more of your own money. Most countries, even ones that are relatively undeveloped will have some availability of ATMs unless you are going to very remote places. While you should check this availability before you leave, the odds are that you will be able to find one at the airport where you land at least. If you get a debit card that has no international ATM fees you can withdraw your money from the ATM in local currency with no currency conversion fees. So you get the great Mastercard or Visa exchange rate and get to withdraw as much cash as you need. Note that while the card might charge no international ATM fees, the ATM itself might charge an additional fee. ING was offering a refund on these fees with their regular account but this is no longer the case from August 2023 onwards. Now the playing field is more level. Whirlpool forums has an excellent wiki that has a user updated guide on fee free ATMs around the world so you know what to look for on your next trip. If you refer to this Ozbargain page you will also get a list of debit cards that have no international transaction fees and no international ATM withdrawal fees. My choice at the moment is UBank because there are no hoops to jump through to get this perk and like the 28 Degrees card it’s no frills and gets the job done.

    How can you lock in the exchange rate without a travel money card?

    One of the advantages that the travel money card offers above all of the other products on this page is the ability to lock the exchange rate. It can be convenient if you are budgeting for a trip to set aside USD1000 and not worry about the exchange rate fluctuating or a crash in the economy suddenly doubling the cost of your trip. I write this as someone who travelled overseas just at the start of the Global Financial Crisis where to Australian dollar went from 1 AUD to 0.97 USD when I booked the trip to 1 AUD to 0.65 USD in the space of a month which really hurt. But there is a way to lock in the exchange rate before you travel that doesn’t give you a terrible exchange rate. For this I use Wise.

    What is Wise?

    Wise is a platform that makes money transfer between currencies as cheap as possible. It has a number of possible uses including transferring between international bank accounts with a very competitive fee. For travelling they offer a no international transaction fee debit card. Their exchange rate the wholesale rate. For example today, 1 AUD buys 0.6623 USD (compared to the 0.6619 on and they allow you to withdraw up to $350 per month without international ATM fees. While the withdrawals are not unlimited, for most destinations in Europe, North America and South East Asia where card use is ubiquitous I think this more than covers the few times where you may need to withdraw cash. There is a small additional fee for the conversion to take place which is transparent. You are told the exact fee before you convert money and it is published on the website if you use the card to make purchases. At time of writing this is currently ~0.4% for AUD to USD which means you get the advantage of reducing exchange rate risk by converting your money in advance or real time currency conversions at a significantly reduced cost to a travel money card (0.4% v 3.3%).
    I personally use Wise as it allows me to transfer money between overseas accounts and withdraw cash while I’m overseas from my Australian account with minimal hassle and fees. When I take longer trips it means I can have the money there and not have to worry about exchange rate fluctuations and it’s easy to transfer back to my Australian account once I’m done with my trip.
    As you can see there are so many better options out there for Australians to use when travelling overseas that a travel money card is not worth the cost. 
    Note: I may get affiliate commissions from some of the products recommended on this page. I have used all of the recommended products personally and continue to do so. I only recommend them because I feel they are genuinely good products and may be of use to you.

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