More and more financial services providers are getting in on the travel money card game these days, and why not? It's a fresh opportunity to hit you up with fees and exchange rate margins. But as long as you get your head around the ins and outs, packing some preloaded plastic can be a winning financial decision for globetrotters as well.

Qantas and Virgin airlines jumped on board last year and have made a pretty good go of it. The Qantas Cash card and Virgin's Velocity Global Wallet card are now among the best in the preloadable class.

Needless to say, both cards allow you – or make that encourage you – to rack up frequent flyer points. In fact, you'll need to be a member of the related frequent flyer program to use either card.

But even if chasing points isn't your thing (and it shouldn't be unless you actually are a frequent flyer), the airline cards currently have some of the best features and lowest fees.

We take a look at:

Do I need a travel money card?

That depends on the length of your trip and how much money you plan to throw around. If you're travelling for a couple of weeks or more and shopping is on the agenda, a travel money card is a good idea. Why? Because you'll know the exchange rates and overseas charges in advance – both of which are bound to be lower than what you'll be charged if you use your credit or debit card (the GE Money 28 Degrees MasterCard was the exception to this prior to slapping on new overseas charges at the start of 2014, though aside from the added 3% charge for cash transactions it's still a good travel option).

But if it's a quick jaunt and your total spend outside of hotels and air travel will be limited to $800 or so – and your ATM use will be minimal – a travel money card probably won't be cost-effective. Making ten overseas ATM withdrawals with an Australia Post card and then closing the account, for instance, will cost you $35; spending $800 using a Commonwealth Bank debit or credit card, including two overseas $200 ATM withdrawals, will cost you $20.

Watch those fees!

As with all things foreign exchange, you'll need to keep an eye on the exchange rates on offer for the various currencies. We found them to be more or less the same across the travel card market – with the exception of the OzForex Travel Card, which offered significantly better rates. But rates change often, and even good ones can be offset by sneaky fees.

Unlike many of the other cards on offer, the airline cards have no purchasing or loading fees. And both offer free reloading.

Here are the main travel money card fees to watch out for in general:

Fees for the card itself

  • Initial card fee
  • Supplementary card fee
  • Replacement card fee

Fees for using (or not using) the card

  • Loading fee – charged for loading currencies on your card.
  • Reload fee – charged for reloading currencies on your card. Important: some providers cap this at $10 or $15 and some take 1% or 1.1% of the amount you load with no limit.
  • Transaction fees for currencies not loaded on the card – charged when you buy something in a country whose currency you haven't loaded or don't have enough of (also known as non-native transactions).
  • Inactivity fee – charged monthly when you don't use your card for a certain length of time (generally one year).
  • ATM and other transaction fees charged by local merchants or financial institutions. (Watch out for these, because a promise of free ATM doesn't cover off what local ATM operators may impose.)

Fee breakdown

We compare the main features of the Velocity Global Wallet and Qantas Cash cards and list ATM fees for currencies in five top travel destinations for Australians: New Zealand, Europe, the UK, the US and Thailand. The airlines go tit-for-tat on ATM fees with these and most other currencies, so ATM costs shouldn't be a deal-breaker when choosing one over the other.

Travel money cards: Velocity Global Wallet Qantas Cash
GENERAL FEES
Initial loading Free Free
Reloading Free Free
Replacement card Free Free
Supplementary card $10 Unavailable
Monthly inactivity fee $1 after 12 months None
ATM FEES (per withdrawal)
New Zealand $NZ2.50 $NZ2.50
Europe (euros) € 1.50 € 1.50
UK (pounds) £1.25 £1.25
USA $US1.95 $US1.95
Thailand (baht) ฿60 ฿70
OTHER DETAILS
FREQUENT FLYER POINTS 1 point for every $AU2.00 spent; 1 point per equivalent of $AU1.00 spent in foreign currency 1 point for every $AU2.00 spent; 1 point per equivalent of $AU1.00 spent in foreign currency
Number of currencies available 10 11
Maximum number of currencies per card 5 11

Other travel money options

  • The Multi-Currency Cash Passport (offered under the branding of both MasterCard and Travelex) doesn't charge overseas ATM fees, but it does charge a minimum of $15 for the card (or a maximum of 1.1% of the amount loaded) and $10 if you want to close the account. If you loaded the maximum of $100,000, you'd pay a whopping $1100 loading fee. And if you make a purchase in a country whose currency is not loaded on the card – or if there's not enough of the local currency left – you'll get hit with a hefty 5.95% margin above the MasterCard exchange rate. (With Qantas Cash and Velocity Global Wallet, the extra margin for non-native transactions is a more tolerable 3%).
    If you withdraw Australian dollars from an ATM back home, you'll get hit with a 2.95% fee. The Cash Passport also charges a $20 negative balance fee, but the airline cards don't.
  • Along with the Cash Passport, the NAB Traveller Card doesn't charge overseas ATM fees, though it does charge you a $4 per month inactivity fee after a year and a $3.75 ATM fee if you use the card in Australia. The reloading fee is 1%, which can add up if you load a significant sum. The charge for currencies not loaded on the card is a substantial 4%.
  • The Citibank Plus Transaction account can be a good travel money option as it has no overseas ATM or purchase fees and no monthly fee. But you'll have to go to the trouble of opening an account before you travel, and if the overseas ATM is not operated by Citibank or an affiliated partner you will very likely be charged a fee by the local ATM operator.

What about all the other cards?

We also investigated the ins and outs of the rest of the travel card market, including the Australia Post Load & Go Travel Card, ANZ Travel Card, Westpac Global Currency Card, Commonwealth Bank Travel Money Card, and American Express Global Travel card.

What we found:

  • All these cards charge similar ATM fees for the currencies they cover and give comparable exchange rates.  The exception is the OzForex Travel Card, which consistently offered better exchange rates, though they would be partially offset by a $15 purchase and $10 closing fee. OzForex says it applies a "super low" margin of 2.99%.
    During one of our checks, an OzForex customer would have received 18 more New Zealand dollars than a Commonwealth Bank travel card customer on a $1000 load.
  • Loading and reloading fees can be tricky. They are generally either 1% or 1.1% except for Australia Post, which has no fee, and OzForex, which charges a flat $15. But some travel cards come with limits and some don't. With American Express, Commonwealth Bank and Westpac, the fees are capped at $10 or $15. With NAB, ANZ and the Cash Passport, there's no cap.
  • Choosing between these cards should mainly come down to which currencies are available, which fees apply, and how much you can load at a time.
CBA Travel
Money Card
Westpac Global
Currency Card
American Express
Global Travel Card
Australia Post
Load & Go
Travel Card
ANZ Travel
Card
Purchase fee $15 $10 $15 $0 $11
Reload fee 1%, maximum $15 1%, maximum $10 1%, maximum $10 $0 1.10%
Closure fee $0 $10 $0 $15 $0
Cross currency conversion fee $0 3% $0 3% 3%
Monthly inactivity fee $0 $0 $0 $0 $3 after 12 months
Overseas ATM fees 2.50 USD, 3.50 AUD, 2.00 GBP, 2.20 EUR, 3.50 NZD, 3.00 CAD, 220 JPY, 3.50 SGD, 17 HKD, 80 THB 2.00 USD, 2.00 AUD, 1.50 GBP, 2.00 EUR, 3.00 NZD, 2.50 CAD, 200 JPY, 3.00 SGD, 15 HKD, 75 THB

2.00 USD, 1.25 GBP, 2.20 EUR 2.00 AUD 2.50 USD, 3.50 AUD, 2.00 GBP, 2.20 EUR, 4.50 NZD, 3.00 CAD, 260 JPY, 4.00 SGD, 20 HKD, 95 THB
Currencies available USD, AUD, NZD, EUR, GBP, HKD, SGD, JPY, CAD, THB, VND, CNY, AED USD, AUD, NZD, EUR, GBP, SGD, HKD, JPY, CAD, THB, ZAR USD, GBP, EUR USD, AUD, NZD, EUR, GBP AUD, USD, EUR, GBP, NZD, HKD, SGD, THB, JPY, CAD
Minimum load 1 AUD 100 AUD 200 USD, 100 GBP, 150 EUR 100 AUD 200 AUD
Maximum load 100,00 AUD 25,000 AUD 30,000 USD, 16,000 GBP, 24,000 EUR 10,000 AUD 80,000 AUD

What's the exchange rate?

The Qantas Cash Product Disclosure Statement says you can find out about exchange rates by simply going to qantascash.com. But it wasn't so simple when we had a go. If fact, we ended up having to make the dreaded customer service call. After a 20-minute run-around, we finally found what we were looking for.

To find out how much your overseas cash is going to cost via the Qantas Cash card, you'll need to go to the "Why Qantas Cash?" tab on the qantascash.com home page and then pick "currencies" on the drop-down menu to find the current exchange rates, which you can view whether or not you have an account.

Not so with Virgin's Velocity Global Wallet, where you're required to become a My Velocity Frequent Flyer member before you can even check the rates.

And it turns out that signing up online and getting a Virgin frequent flyer membership number and password plus a temporary printable card isn't enough. To gain access to the Global Wallet exchange rates, you'll have to wait for the real card to arrive in the mail. That can take, as in our case, 21 business days.

In other words, you have to have a Virgin Global Wallet card in hand before you can research important details like exchange rates. We asked Virgin Australia Corporate HQ for access to the rates before our card arrived but didn't get a response.

We tracked rates offered by the Velocity Global Wallet, Qantas Cash and eight other travel money cards across four currencies – the New Zealand dollar, euro, British pound and US dollar – over the course of a few weeks (rates for the Thai baht weren't available).

The upshot? There wasn't enough of a consistent exchange rate difference to make any one travel money card stand out from the crowd, with the exception of OzForex though they all help themselves to a nice little margin on top of the official exchange rate. (Rates for the Velocity Global Wallet change less frequently than those of the other cards – about every three days, as opposed to daily – but they aren't any better.)

What about money left on the card?

Ever wonder what happens to money left on your travel money card? It may not come as a surprise that the financial institution behind the card generally keeps it – or at least claws it back through monthly inactivity or high domestic ATM fees. Or they may simply help themselves to whatever's left once the card expires. But that practice has recently come under scrutiny, and change may be in the wind.

In October 2014, ASIC convinced the Commonwealth Bank to release roughly $2.2m to about 45,000 customers who had money left on expired Commonwealth Bank Travel Money Cards. But the bank is not actually getting in touch with customers and offering refunds. The leftover money has to be claimed by card customers within three years, after which it will go into the government's unclaimed money fund (officially called the Commonwealth of Australia Consolidated Revenue Fund). You can attempt to reclaim money from this fund any time, but you'll need to prove you're entitled to it (and you can only search for amounts of $500 or more on ASIC's unclaimed money finder).

As part of the CBA case, ASIC said it was reviewing 13 travel money cards from nine providers with a focus on "how consumer funds on expired multi or single currency travel cards are dealt with by card issuers". The product disclosure statements for some cards imply that any closure fee is effectively a "funds redemption fee" and you will get your money back. But apparently this doesn't always happen. Generally, it's good idea to use up the money on your card before your travels are over.

Using your regular bank account card

Let's face it, many of us don't have the time to figure out whether a travel money card can save us enough to make a real difference or which one best fits our itinerary. If you're just heading overseas for a matter of weeks and want to use whatever bank card you have on hand, be prepared to pay a generous exchange rate margin with every transaction along with other overseas charges.

All up, these bank card charges can easily exceed the costs of a travel money card, but the convenience may outweigh the costs. It will depend how often you use your bank card. The less, the better.

Banks invariably help themselves to a hefty margin above and beyond the official exchange rate on offer at the moment, as do the travel money cards. But at least you can know what you're going to get beforehand with the travel cards (xe.com is a good source for checking the official – or market – exchange rates against those available from a travel card provider).

To see how your bank card sizes up, check our comparison table (with data provided by mozo.com.au). Not surprisingly, the Big Four banks hit you with some of the highest overseas charges. And be forewarned: the ATM fees listed don't include fees charged by overseas non-network ATMs, which can be steep.

Provider
name
Name Overseas
ATM fee ($)
Overseas
purchase fee ($)
Overseas
transaction fee (%)
ADCU Access Savings 4.50 0.00 2.95
AMP Access Account 5.50 1.50 2.50
ANZ Access Advantage 5.00 0.00 3.00
Arab Bank Australia Statement Account 5.00 0.00 2.50
B&E Personal Banking Everyday Advantage 5.00 0.00 1.25
B&E Personal Banking iAdvantage 5.00 0.00 1.25
Bank of Melbourne Complete Freedom Account 5.00 0.00 3.00
Bank of Melbourne Express Freedom Account 5.00 0.00 3.00
Bank of Melbourne SENSE Account 5.00 0.00 3.00
Bank of Queensland Day2Day Plus Account 5.00 0.00 3.00
Bank of Queensland Reverse Charges Account 5.00 0.00 3.00
bankmecu Access Account 5.00 0.00 2.00
BankSA Complete Freedom Account 5.00 0.00 3.00
BankSA Express Freedom Account 5.00 0.00 3.00
BankSA SENSE Account 5.00 0.00 3.00
BankVic EzePac 4.00 0.00 3.65
Bankwest Hero Transaction Account 5.00 0.00 2.95
Bankwest Lite Direct Transaction Account 5.00 0.00 2.95
Bankwest Lite Transaction Account 5.00 0.00 2.95
Bankwest Qantas Transaction Account 0.00 0.00 2.95
Bankwest Rewards Transaction Account 0.00 0.00 2.95
Bankwest Zero Transaction Account 5.00 0.00 2.95
BCU Access Account 0.00 0.00 3.65
BCU Basic Access Account 0.00 0.00 3.65
Bendigo Bank Ultimate Everyday Account 5.00 0.00 2.00
Beyond Bank Access Savings Account 4.50 0.00 2.50
Big Sky Everyday Banking Account 4.00 0.00 3.00
Catalyst Money Access 0.00 0.00 3.00
Citibank Plus Transaction Account 0.00 0.00 0.00
Commonwealth Bank Complete Access 5.00 0.00 3.00
Commonwealth Bank Smart Access 5.00 0.00 3.00
Community First Credit Union Access 5.00 0.00 2.00
Community Mutual Group Access Savings Account 2.00 0.00 2.00
Credit Union SA Everyday Account 2.50 0.00 2.00
CUA Everyday Account 5.00 0.00 2.50
Defence Bank National Access 4.10 0.00 3.00
Gateway Credit Union Edge Account 3.50 0.00 2.00
Gateway Credit Union Everyday Savings 3.50 0.00 2.00
Greater Building Society Access Account 4.00 0.00 3.00
Greater Building Society Ultimate Access Account 4.00 0.00 3.00
Heritage Bank Money Manager 5.00 0.00 2.50
Heritage Bank Simply Access 5.00 0.00 2.50
HSBC Day to Day Account 4.50 0.00 3.00
Hume Bank All Purpose 0.00 0.00 2.85
IMB Everyday Account 5.00 0.00 2.00
IMB Everyday Unlimited Account 5.00 0.00 2.00
ING DIRECT Orange Everyday 2.50 0.00 2.50
Maritime, Mining & Power Credit Union Access Saving Account 1.50 0.00 2.50
ME Bank EveryDay Transaction Account 4.00 0.00 2.50
MyState Access Account 5.00 0.00 2.00
NAB Classic Banking Account 5.00 0.00 3.00
Newcastle Permanent Everyday Account 5.00 0.00 2.00
Newcastle Permanent Statement Savings Account 5.00 0.00 2.00
P&N Bank Easypay Access Account 5.00 0.00 3.00
People's Choice Credit Union Activate Account 5.00 0.00 2.50
People's Choice Credit Union Everyday Account 5.00 0.00 2.50
People's Choice Credit Union Zip Account 5.00 0.00 2.50
Police Bank Easy Access Account 3.80 0.00 3.00
QANTAS Credit Union General Savings Account 2.00 0.00 3.65
QT Mutual Bank Current Account 4.50 0.00 3.00
QT Mutual Bank Everyday Account 4.50 0.00 3.00
Queensland Country Credit Union All Access 4.00 0.00 3.65
Queensland Country Credit Union Options 4.00 0.00 3.65
Queensland Police Credit Union On Call 5.00 0.00 3.65
Queenslanders Credit Union Basic Account 2.00 2.00 3.50
RAMS Action Account 5.00 1.75 0.00
Rural Bank Everyday Account 4.00 0.00 2.00
SCU Access Savings 4.00 0.00 2.00
SGE Credit Union Access Account 5.00 0.00 2.85
SGE Credit Union Reward Me Saver 5.00 0.00 2.85
St.George Complete Freedom Account 5.00 0.00 3.00
St.George Express Freedom Account 5.00 0.00 3.00
St.George SENSE Account 5.00 0.00 3.00
Suncorp Everyday Basics 5.00 0.00 3.00
Suncorp Everyday Options 5.00 0.00 3.00
Teachers Mutual Bank Everyday Direct Account 4.00 0.00 2.45
The Rock Building Society Fee Cruncher Account 5.00 0.00 3.00
The Rock Building Society Only Account 5.00 0.00 3.00
UBank USaver Ultra Transaction Account 4.00 0.00 2.00
Victoria Teachers Mutual Bank Everyday 2.50 0.00 2.00
Westpac Choice 5.00 0.00 3.00
Wide Bay Australia Everyday Access Account 5.00 0.00 3.00

source: mozo.com.au