Pre-paid preferred over credit cards for overseas travel

19 February 2010

There are a number of travel money options available for the average traveler, ways they can access their money overseas or pay online. However there are pros and cons for each method with the range of fees and charge different for the different methods. In fact, many overseas funding options hold potentially huge foreign credit card interest rate fees, ATM/cash point machine fees and expensive exchange rates so it is important to consider the many options available.

The options for overseas travel funding include:

Cash
Credit Cards
Overseas Debit Cards
Local Debit Cards
Pre-paid travel cards
Traveler's Cheques

When it comes to comparing these different forms of finance, it is the pre-paid that typically offers the highest security along with the highest convenience. With a range of travel pre-paid cards available, pre-paid travel cards have a set amount of funds loaded onto them before the departure date which can be topped up at any time, just like a debit card. It can be used to withdraw money from ATMs or to purchase items. However there are no excessive interest fees, yet it will attract foreign transaction fees.

Yet credit cards also have the benefit of reward programs while you travel, online security, and travel insurance along with the ability to expand your limit for emergency funds.

However credit cards have quite a number of fees attached to overseas usage including foreign ATM withdrawal and transaction fees and foreign exchange charges which can easily get out of control while travelling. For the majority of the credit cards available, fees of around $4 per transaction or withdrawal.

As a result of such high fees and charges, many travelers are now opting to use pre-paid cards when travelling overseas as opposed to costly credit cards due to the fact that the fees and charges attached are almost non-existent compared to credit.

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