Travelling abroad is always an exciting experience, but there are those inevitable costs that sneak up on us: foreign transaction fees, ATM withdrawal fees, bad exchange rates—to name a few. Those costs can quickly pile up against your budget.
But no need to panic! Travel prepaid travel cards can be incredibly effective at helping save on foreign fees. Today, we’re outlining how prepaid travel cards can help you save foreign fees and provide you with a cost-effective way of money management on your travels.
Key Takeaways
- If you’re looking for a smart way to manage your money when traveling, a prepaid travel card can be a good way to do so
- These cards offer a convenient way to manage your money function well at managing your money overseas, including competitive foreign transaction fees and exchange rates
How a Prepaid Travel Card Can Make a Difference
Prepaid travel cards are a solution designed to help travelers cut down any foreign fees while offering a safe and manageable alternative to carrying a wad of cash or using your everyday credit card. The biggest draw of the prepaid card is that you can add funds to the card ahead of time and use it to make purchases or withdraw cash abroad. Prepaid travel cards, such as the prepaid travel card by Koho, often don’t apply foreign transaction fees to purchases. Whereas many other traditional debit and credit cards often charge a 3% fee on all your international purchases.
They’ll also often provide a more competitive exchange rate than you’ll find at an airport or hotel currency exchange. While there are various options available, many of them are designed to provide these benefits without adding unnecessary fees.
How Prepaid Travel Cards Work
A prepaid travel card functions almost like a debit card, only you have to preload it with funds ahead of time. You can load your card online or with a corresponding app; once funds are on the card, you can spend or withdraw them with an ATM.
One of the biggest advantages to this over a credit card is the system offers extra help for budgeting—you’re only allowed to spend what’s preloaded on the card, making it almost impossible to overspend, which can happen with credit cards and can lead to debt. With a prepaid card, you maintain control over spending while still advancing your funds.
Traveler’s cards also tend to come with strong safety features. Chip technology and PINs are pretty standard, as are fraud protection and the ability to lock a card in the event it’s lost or stolen. If you lose your prepaid card, most issuers will either replace it or refund your money once you get home, so you’re not out of luck.
Choosing the Right Prepaid Travel Card for Your Trip
When selecting the right prepaid travel card, consider the following factors:
Low Fees
If possible, find a product without foreign transaction fees; some charge ATM fees, and even more have charges when you load funds. Consider the complete fee schedule, and go with the option that offers you the best deal for your specific usage habits.
Global Acceptance
These generally work with major payment networks (i.e., Visa or Mastercard) and can, therefore, typically be used in any given location, depending on the product.
Reload Options
A card that allows you to reload using an app or online can be a convenient way to add more money onto the card when you need it.
Currency Support
Some allow you to hold multiple currencies on one card and will do the conversion for free (or at a low rate) for you.
Security Features
As with a debit or credit card, aim for a card with fraud protection services that immediately lock the card if it’s lost or stolen, and a PIN.
How to Maximize Savings with a Prepaid Travel Card
To make the most of your prepaid travel card, stick with these tricks:
Preload Funds Wisely
Before you load your prepaid travel card with funds, check out the exchange rate. Loading your card when the exchange rate is in your favor means you’ll get a better rate.
Avoid Unnecessary ATM Fees
Some prepaid cards charge fees when you withdraw money from an ATM. To avoid — or at least minimize — these fees, don’t withdraw cash unless you absolutely need it. Make purchases with the card, instead. If you do need cash, try to use an in-network ATM that doesn’t impose additional charges.
Monitor Your Spending
Many prepaid travel cards come with a mobile app that lets you see what you’re spending. Keeping an eye on your balance can help you stick to your budget and avoid any larger issues later.
Take Advantage of Rewards
Some prepaid cards also offer cashback, rewards, or discounts on certain transactions. If your card qualifies, you can defray costs a bit.
Use the Card for All Payments
You should exchange for some cash, but prioritize using your prepaid travel card for large and small purchases to save on exchange rates.
Top Benefits of Using Prepaid Travel Cards
Prepaid travel cards offer several benefits that make them a great tool that money-smart travelers should have access to:
- Control Over Spending: Spend only what you have loaded to ensure you stay within budget.
- Debt-Free: Because you are loading your money in advance, you can’t rack up debt as you can when using a credit card.
- Global Acceptance and Use: These cards are accepted at retailers and ATMs internationally, making them an attractive alternative to cash.
- Security and Protection: Carrying a prepaid card is much safer and more secure than a large sum of cash. PIN protection and fraud monitoring are also in place.
- Convenience: Easily reload funds and monitor spending with a mobile or online app, depending on the issuer.
Common Mistakes to Avoid When Using Prepaid Travel Cards
Prepaid travel cards are a smart travel money tool, but they do expose you to some common cardholder errors:
Not Informing the Issuer
Tell your card issuer when you’re traveling so you won’t be caught without the ability to reload. If the issuer doesn’t know you’re traveling internationally, they could flag your card for out-of-the-ordinary spending behavior.
Overloading the Card
Don’t overload your card with funds if your card provider will charge inactivity fees. Know how much you’re spending, and reload only as much as you need.
Relying Solely on One Card
Use an alternative payment option, like a credit card or another prepaid card, as a backup if your card is lost or stolen.
Final Thoughts
If you’re looking for a smart way to manage your money when traveling, a prepaid travel card can be a good way to do so. These cards offer a convenient way to manage your money function well at managing your money overseas, including competitive foreign transaction fees and exchange rates. They’re also far more convenient and safe to carry with you when compared to cash. Make your travels easier by having a tool that can help control your spending and ease the process of budgeting abroad.
