When thinking about going on holiday, organizing your travel money is very important, particularly in the present economic climate. The weak dollar means that your won't go as far as in previous years. Therefore, it is vital that you get the best travel money rate for your cash.
Alternatives for travel money
There are a number of travel money options that one can go for.
• Cash - You just pick your cash, convert it to the appropriate currency for the country you are traveling to either before you leave your home country or after you arrive at the destination. This is probably the oldest alternative as far as travel money is concerned and it is its disadvantages that almost single handedly spawned all other alternatives for travel money. The main disadvantage with cash is lack of security - it may be stolen or misplaced.
• Standard Credit/Debit Card - These are credit or debit cards associated with either one of the large international card brands such as Mastercard, Visa, Discover, JCB and American Express. The main concern with these cards is the charges often applied on each transaction as well as the risk of fraud that they carry.
• Travellers Cheques (TCs) - Unlike the credit/debit cards, they are fee-free. They are also relatively secure: they need to be countersigned and are replaceable if stolen or misplaced. However, the exchange rate applied is usually not competitive. Again, most banks and exchanges will charge a commission to change TCs, thus further reducing the overall exchange rate rate.
• Prepaid currency card - Another and more recent alternative is the prepaid currency card. The cards are structured to counter the disadvantages of the other travel money alternatives while retaining overall conveniences for the international traveler. These are covered in more detail below.
About Prepaid Currency Cards
Prepaid cards are somewhat similar to standard credit and debit cards and they offer the same ability to purchase products and services but with one big difference - you can only spend up to the total amount that has been preloaded. This means there is no risk of running into debt as it has no credit or overdraft facility. As with cash, a pre-paid currency card requires converting cash into the chosen currency; this means that you are subjected to the exchange rate designated by the provider. The benefit is that you are able to hedge against exchange rate fluctuations during the trip. You will be issued with a PIN number and, similar to your normal international debit and credit your card can be used virtually anywhere on the planet.
Benefits of Prepaid Currency Cards
• Application process - There are no credit checks and this implies you get the card without worrying about your credit history. All prepaid card providers will carry out an identity check to confirm you are who you say you are.
• Control - Control is one of the reasons prepaid currency cards are popular with parents and guardians sending their children overseas for studies as it helps manage spending. One loads the card based on a budget and any excesses are easily picked up since the card would have to be loaded again.
• Better travel money rate - Though not necessarily a rule, prepaid currency cards often attract a better exchange rate than other forms of travel money. The FairFX currency card has one of the best exchange rates around. Have a look and fine out more"
Wednesday 10 March 2010, 09:25am
Previous Next
