Best Currency Card for Travel
UPDATED August 2019
Often living in a small country at the end of the world is advantageous. But not when you are looking for a great deal on cards to use when travelling. Americans and Europeans have heaps of options for cash-back, point-hacks etc etc. New Zealand not so much. Until very, very recently we paid through the nose to spend our own money overseas. Finally there is a solution.
TL:DR No-fees, best exchange rate, multiple foreign currency virtual accounts -TransferWise
Best Prepaid Card
Until August 2019 - all of the heavily promoted travel cards were very underwhelming with high costs - usually in a very poor exchange rate. Plus a very limited number of currencies are supported.
Heavily promoted in New Zealand as the "best" way to spend money overseas - I wanted to like them - but I was underwhelmed by the hidden costs of the standard bank offerings. The concept is great - a multi currency card which you can pre-load with a number of currencies. But are currency cards worth it?
Until Transferwise Launched in New Zealand in August 2019.
Transferwise - A Game Changer
Transferwise - although in some respects its a "normal" Platinum MasterCard which has some useful benefits (zero liability for mis-use for example, acceptance with zillions of merchants worldwide) it's actually a very different beast.
Transferwise's core business is cheap currency transfers - with your account you can add virtual local bank accounts in a number of different currencies apart from NZ$ (AUD,USD, EUR, GBP) and someone can pay into that account in the local currency, just as they would if you had a local bank account in that country. You then convert from the foreign currency to NZ$ for a very low fee (0.488% for major currencies - higher for more exotic ones e.g 1.2% for NZD to Chinese Yuan). All of the conversions is done at the "mid-market rate" - this is the rate quoted on sites like Google and Xe.com - the rate that usually does NOT reflect the rate your bank uses - they can use any rate they like (and do - typically 2- 6% worse than the mid-market rate).
Which brings me to my second point - Transferwise supports over 40 currencies: from UAE dirham to Ukrainian hrynia - you can carry balances in these currencies). In contrast most other cards offer at best 10, and usually only 7. So if you want pre-purchase local currency for your next Asian or Eastern European trip - you can do that!
So what is the catch - you cynics ask - me too! I've found one - after the first NZ$350 withdrawn from ATMs you pay an additional 2% of withdrawals. That's unfortunate - and pushes it back to the similar cost that my ASB debit card. But for credit card purchases overseas - its a no-brainer!
Advantages of Travel Cards
- they are separate from your normal debit/credit cards - and you should always have more than one way to pay when travelling - cards get lost or stolen frequently!
- you can lock in an exchange rate before travel
- you can budget in s supported foreign currency
- you can average your exchange rate over a period of time by adding currency some months before travel
- you can pre-purchase a range of currencies
- some cards will give you airlines rewards or other perks
Disadvantages of Travel Cards
- if you are travelling to countries that don't use the available currencies their conversion margins are high compared to a normal debit or credit card.
- supported currencies for most cards are very limited.
- its easy to end up paying double conversion fees if you inadvertently overspend an unsupported or supported currency
- the exchange rate may improve after you buy a foreign currency
- money can take up to 3 days to appear on your card from your bank account
- they are debit cards (not credit ) so don't use them for pre-authorizations for rental cars and some hotels - your funds maybe unavailable for up to 30 days after you check out.
Should you travel with a Travel Card?
I used to say no - but Transferwise is a game-changer - for times when you can use a card to pay directly - it has the best exchange rates and fees going - by quite a long-shot. Its worth foregoing the points/miles/awards we often get from credit cards. I'd choose to use it for countries where almost every shop takes a card e.g. Australia. Or where I can use a card online or in-person a lot: Singapore, Thailand, UK, Western Europe.
If you are travelling to the rest of the developed world who don't use cards quite as much as we do, and do use a currency typically supported by travel cards e.g. UK, US, Western Europe - then having the exchange rate locked in for you - they may appeal.
If, like us, you are a little further off the beaten track (or going to the Pacific) then you often come back to old-fashioned cash. Cash of course can be had from an ATM - but the crazy-low limit of $350/30 days with Transferwise before a 2% fee kicks in is not very attractive. I will probably still use my ASB Debit card for that - they recently dropped the $7.50 (!) fee for using an overseas ATM
Multi Currency Cards Comparison Exchange Rates
To make this comparison I compared exchange rates on a random date - the actual rate doesn't matter - it's the differences between the various cards which were interesting. All figures taken from the respective card's public websites. Note I can't really compare bank's credit or debit cards because they do not disclose the exchange rate they use - normally hiding behind the "the rate determined by MasterCard/Visa" plus their percentage.
|Travelex MoneyCard MasterCard||92.76||63.02||56.10||435 (cash)||1884 (cash)|
|OneSmart - Air NZ MasterCard||91.44||62.01||55.82||n/a||n/a|
|Loaded for Travel Visa||91.28||61.89||55.94||n/a||1881|
|Cash Passport Mastercard||91.49||62.04||55.27||n/a||n/a|
|Qantas Cash Mastercard||91.53||62.04||55.87||n/a||n/a|
Multi Currency Cards Comparison in Detail
I've summarized the fees for all the available multiple currency cards available in New Zealand below. If it was not for the 2% fee on overseas ATM withdrawals Transferwise would be a very clear winner. As it is its definitely a winner for a card to be used for purchases in foeign currencies - whether you are travelling or just staying at home online shopping!
The ASB Visa Debit card is a good option for overseas ATM withdrawals now they have withdrawn (sorry...) their previously sky-high international fee. Note if you'r travelling to Australia you'll also get the ATM machine's up-front charges waived if you use Commonwealth Bank machines (other NZ banks have similar deals with their Australian parent bank's machines).
|TransferWise Mastercard||Free||2% after NZ$350/30 days||2% after first NZ$350/30 days||Free||Free||0.37%-2.24% over bank mid-rate|
|Travelex Money Card MasterCard||1% or $10 whichever is greater||Free||2.95%||$4/month after 12 months inactivity||$10||4% for non-supported currencies|
|OneSmart Air NZ MasterCard||Free||3 free/month then $3||$2||$1||n/a as it doubles as your AirPoints card||2.5%|
|Loaded for Travel Visa||$20 setup fee||$2||$6||Free||Free||unknown|
|Cash Passport MasterCard||Free||$2.50||Free||Free||Free||5.95%|
|Qantas Cash MasterCard||Free||$2.50||Free||Free||Free||2.5%|
|ASB Debit Visa||Free||Free||Free||$5/6 months||Free||2.1%|
Travelex Cash Passport
Supported currencies NZD plus; AUD, USD,CAD, GBP, EUR, SGD, HKD, JPY
Onesmart - Air New Zealand
Mastercard issued by Travelex
Supported currencies: NZD plus AUD, USD, CAD, GBP, EUR, HKD, SGD, JPY
You earn 1 NZ Airpoint dollar per NZ$100 spent overseas - but you are paying for these in the poorer exchange rate.
Loaded for Travel
Visa and has a few more currencies Supported currencies: AUD, USD, CAD, GBP, EUR, HKD, SGD, JPY, Thai Baht, SA Rand
Cash Passport various banks including ANZ
Mastercard - issued by Travelex Supported currencies: AUD, USD,CAD, GBP, EUR, SGD, HKD, JPY
Mastercard issued by Qantas.
Supported currencies: AUD, USD,CAD, GBP, EUR, SGD, HKD, JPY
Earn 1 Qantas point for $2 spend.
So Are Currency Cards Worth It?
For overseas ATM withdrawals - NO - use your debit card instead (make sure the bank knows you are travelling).
For overseas purchases including card transactions when travelling TransferWise is well worth a look.
#Yes there are affiliate links in this post - but they won't cost you anything - in fact you get a free initial transfer as a thank you.