Currency cards – possibly the best way to manage your money abroad
by Monash University
This article was written by George Ward, published on 4th February 2013 and has been read 26943 times.
You might currently be saving or have saved up enough funds for your epic venture and are now looking into the ways in which you can access and control your hard-earned cash. You could take it all in a bag (highly risky and a tad stupid!), you could get travellers’ cheques (for a fee, and sometimes not widely accepted), you could wire money or use your home debit card (which can be expensive and potentially risky) or you could set up a bank account in your temporary home (which can sometimes be a hassle). Now though, currency cards are becoming more widely used, with virtually no drawbacks. Here's how they work...
1. What is a currency card?
A currency card is very similar to a debit card that you might use at home but pre-loaded with the currency of the country you are travelling to; not all currencies are available at this time, but British Pounds, Euros, US/Canadian/Australian/New Zealand Dollars and a few others are. You can use the card to withdraw money from ATMs around the world and pay for goods directly.
2. How does it work?
After ordering it free online or in some stores, you can essentially ‘transfer’ your home currency into the foreign currency with the exchange rate that is being offered on the day of purchase. If you run out of money, you can ‘top-up’ the card online or by phone, with the same exchange rate.
3. What are the main advantages?
1. Security
Just like a debit card, a currency card is safer than carrying large amounts of cash. Lose your card? Don’t lose your mind! The card can be stopped and help is at hand 24/7 through a helpline. Some places offer a second card free of charge. They are also not connected to a bank account.
2. No ATM withdrawal fees
This is a major benefit as, despite being small, these can soon mount up and eat away at your hard-earned money which you have better things to spend on. Be careful though – some ATM machines have their own fees, so search online for a MasterCard / Visa ATM locator to find a nearby machine that won’t charge you.
3. Favourable exchange rates
The daily increase and decrease in exchange rates can be baffling. By purchasing your foreign currency before you get to your destination, you secure a better rate, particularly in comparison to converting funds at the airport or in your new territory.
4. Cheaper than using your card from home
No nasty bank charges, conversion charges or admin fees.
5. Keep track of your finances
Fair FX have a new app! Find out more...
6. Use it before, during and after your year abroad
Pay for things online, pay in shops, pay in taxis (basically anywhere that would accept a Visa card), withdraw your accommodation rent money, get your salary paid onto it, get your Erasmus grant paid onto it, put your savings into it, get your parents to top it up from home in emergencies, go on adventures and take it with you...
4. Sounds great! Surely there is a catch?
There are no major drawbacks but remember to read the full terms and conditions, especially regarding fees. When you return home, there may be a fee for redeeming funds and if you leave funds on the card and do not use it for more than 12 months you may be charged an ‘inactivity’ fee.
5. Where can I get one?
There are various companies who offer these cards, but we are working with Fair FX, and if you have any questions about your application or foreign exchange in general, please do get in touch with them.
If you're preparing to spend time abroad, it's worth considering a Fair FX currency card instead of setting up a foreign bank account. Find out more!
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