A travel money card, also known as a prepaid travel card, is a card you can use to spend money abroad without the drawbacks of using your regular debit or credit card.
But what is a travel money card?
As the name suggests, a travel money card can be used to spend money abroad with funds you’ve transferred from your bank account. The amount you’ve budgeted for holiday spending can be transferred to your travel money card before you go travelling. This way, you don't have to use your debit or credit card on holiday.
This comes with many benefits, including the fact that you won’t have to pay excessive fees when using your travel money card abroad.
With this in mind, we've created the ultimate guide to travel cards so that you can decide whether they’re the right option for you. Below you’ll find answers to the following: what is a travel money card, how do travel cards work, and what benefits do they offer?
Let's take a look.
How do travel cards work?
Travel cards provide an alternative to using cash, travellers' cheques, or your regular debit or credit card when travelling abroad.
You can transfer money from your bank account or debit card into your travel card. Then, you can use your prepaid travel card all over the world in the same way as a regular debit or credit card: to pay for meals, enter attractions, and book flights and accommodation.
Unlike a debit or credit card, with a travel card, you can only spend the amount you have available in your account - a.k.a. you can’t borrow money. However, depending on your travel card provider, you can quickly transfer funds into your travel card account from your bank - sometimes with just a few clicks on your phone via an app.
Despite working similarly to your debit or credit card (and providing the same convenience and ease of use), using travel money cards to spend abroad has many unique benefits and financial advantages.
What are the benefits of using a travel money card?
As an inexpensive, safe, and convenient way to spend abroad, there are several reasons why spending with a travel card is a better option than using cash or your regular card when travelling.
So, how do travel cards work to provide benefits for cardholders, and what are travel cards’ main advantages?
1. They can save you money in fees
Every time you use your regular debit or credit card abroad, you’re charged foreign transaction (FX) fees on your purchase. These fees usually comprise a percentage of your purchase, ranging from around 2-8% depending on your card provider and whether you’re using a debit or credit card.
What are travel cards for if not to cut these costs and save you money? You don’t have to pay any of these foreign fees with a travel money card. This means you can spend more on having the greatest experiences abroad.
2. They often have good exchange rates
How do travel cards work to make spending abroad less expensive? Aside from charging no foreign fees, they also give cardholders the best exchange rates available.
Travel card providers work to ensure that their cardholders have access to the best exchange rates. They work with payment network providers, such as Mastercard, to deliver their customers the most favourable exchange rates.
This is vital to saving money while travelling because a great exchange rate allows you to get the greatest value in foreign currency from each pound you spend.
3. It’s a great way to budget
When planning your holiday budget, you want to ensure you have enough saved to do everything you want without being financially worse off when you get home.
A travel money card can help you budget because you can only spend what you have available on your card. In other words, you can put your total holiday budget in your travel card account and only use your travel card abroad to make sure you don’t spend too much.
Some travel cards also come with an app to help you save and budget for different aspects of your holiday before you leave, such as flights, accommodation, entertainment, and food.
What are travel cards for if not to help you save money in every way? Effective budgeting is a vital component of saving money and staying financially fit.
4. It’s safer than carrying cash
Most travellers default to carrying cash abroad to avoid the hefty foreign fees that come with using their cards.
However, this comes at a price. Cash is more easily lost and stolen than a card; unlike a card, this money is usually gone for good.
On the other hand, if you lose your travel card - or if it’s stolen - you can freeze the card to stop anyone else from using your money, and some prepaid travel card providers let you do this instantly in an app.
5. They’re accepted everywhere
Like your regular card, a travel money card can be used worldwide in all kinds of establishments, making them a more convenient payment tool than travellers’ cheques, despite being just as secure.
So, unless you’re frequenting a cash-only business - of which there aren’t many these days - you should be able to use your travel money card to do all your spending abroad.
Who can get a travel card?
Unlike credit cards, you don’t need approval to get a travel card since you can’t use it to borrow money. This means anyone can use a travel money card to enhance their spending experience abroad.
Some providers will have age restrictions preventing minors from obtaining a travel money card, while others cater specifically to teenagers and kids with prepaid cards.
What currencies can you use?
With a travel money card, you should be able to use your card in any currency.
Multi-currency cards make spending easy in any country you visit, allowing you to store and spend in different currencies from one card.
Sterling cards can also be used worldwide, but they convert your money into the local currency as you spend it, using the most up-to-date exchange rate to do so.
On the other hand, single-currency cards only store funds in the currency dictated by the card itself. If you only travel to one area of the world, such as Europe, these cards can be helpful. Otherwise, they can be quite limiting.
Some regular prepaid cards can only be used in one currency, so pick a travel-oriented prepaid card to get the best spending flexibility when abroad.
Travel fee-free with the HyperJar travel card
Using a travel money card abroad is the best way to avoid paying international transfer fees on every purchase without the risk (or hassle) of carrying around physical cash.
These are just some of the reasons that make the HyperJar prepaid travel card the most affordable, secure, and convenient way to spend abroad. HyperJar also makes it quick and easy for cardholders to transfer funds to their account in their app and works with Mastercard to give card users access to the best exchange rates.
HyperJar also has a handy app that allows you to instantly view your card balance, track your spending, and save and budget for your travels so you can stay financially smart abroad.
If you’ve been wondering what travel money cards are, how travel cards work, and whether you can benefit from a travel money card, we hope we've answered your questions with our guide.
If you’re planning on travelling, we have some great guides to help you get prepared financially. Whether you’re wanting to travel on a low budget, travelling cheap with kids, or even going on a gap year, we’ve got the money management tips for you.