What’s the best way to carry money when traveling abroad? There are more options than ever before, and yet it’s hard to find a payment method that offers maximum convenience and security — essential features for most travelers.
Most people simply bring their credit cards or debit cards with them. Plastic is more secure than cash, and there’s no need to worry about bringing enough funds.
However, there are drawbacks to using credit cards overseas as well. For example, Americans traveling in countries with the new chip-and-PIN standards for credit cards are increasingly finding that their credit cards are no longer universally accepted.
At the same time, travelers cheques, like those traditionally issued by American Express, are slowly becoming outdated. According to industry experts, not only are travelers checks more cumbersome to deal with, they are also becoming less accepted overseas.
If you prefer leaving your credit cards at home, consider bringing a prepaid travel card instead. Prepaid travel cards can be used anywhere credit or debit cards are accepted, including at ATMs. The money loaded on the card is converted to the local currency with each purchase, using the dominant exchange rate of that day.
Users have the option to reload the card as many times as needed, no matter where they are. In addition, some prepaid travel cards, like the Travelex, feature chip-and-PIN security technology, meaning that the card will be approved in places where American credit cards might not be approved.
Prepaid travel cards do have downsides, including costly fees and, in some cases, poor conversion rates. And if you have extra money at the end of your trip, some cards may require you to pay a fee to get your money back.
“Most prepaid travel cards are not as good a deal as regular credit or debit cards,” says Ed Perkins, a contributing editor at SmarterTravel.com. “However, people still like them because they limit your losses; you can’t lose anything more than what you have on the card.”
It used to be that any prepaid credit card could be used overseas. However, international drug traffickers were quick to catch on to the fact that they were a great way to transport drug money from the U.S., so that loophole has been closed.
These days, when planning a trip abroad, it’s important to specifically get a prepaid travel card, not just a regular prepaid card. Here is a list of the most common prepaid travel cards and their key features.
The Visa TravelMoney card
Pros: Security features are this card’s strong points. If the card is lost or stolen, the Visa TravelMoney card offers emergency card replacement and cash that is generally delivered within one business day. The card also comes with zero liability protection from fraudulent use, as well as reimbursement for lost luggage. It can also be easily reloaded online or over the phone.
Cons: Downsides include high fees and a 7 percent currency conversion rate. In addition, the card is not chip-and-PIN compatible.
Where to get it: The Visa TravelMoney card is available at many chain drugstores and supermarkets, as well as at big box stores. At the time of publication, it was not available online.
Travelex/MasterCard Cash Passport
Pros: The biggest draw of the Travelex/MasterCard card is that it can be loaded with different currencies of your choosing, including U.S. dollars, Euros or English pounds. Another key advantage of the Travelex MasterCard is that this prepaid card is fully equipped with chip-and-PIN technology, so you won’t have to worry about whether the card will be accepted overseas.
The Cash Passport also has several of the same security features as the Visa model, including zero liability and 24-hour security support. In addition, the card enables cardholders to get their dollars back without an exchange penalty.
Cons: The main drawback is the card’s poor conversion rates, which are higher than for credit cards and other prepaid travel cards. However, many travelers will find that this is a price worth paying for the added features, particularly the chip-and-PIN compatibility.
Where to get it: The Travelex card is available in local retail stores and online.
Pass from American Express
Pros: It’s kid-friendly. The American Express Pass card is aimed at parents of teenagers or young adults for use both domestically and overseas. For parents sending their youngster out to explore the world, the card has several attractive features.
“Many people use prepaid travel cards for their kids,” says Perkins. “They can put $500 on the card and not have to worry about losing more money. There’s enough to worry about when your kids are traveling as it is, so many appreciate the extra peace of mind.”
Parents have the ability to add money, check the balance, view the transaction history and set up alerts. The card is a great way to make sure your kids has the money he or she needs — and keep an eye on what your kid is spending money on.
Like other American Express cards, Pass comes with purchase protection and GlobalAssist, which will direct cardholders to English-speaking medical and legal professionals, as well as to people who can help with lost passports.
Cons: Like the Visa TravelMoney card, the Pass card does not feature chip-and-PIN technology — a definite drawback. According to an American Express spokesperson, American Express currently has no plans to add chip-and-PIN features to the card.
Where to get it: The Pass prepaid travel card can be ordered online at the American Express website.