With summer on the horizon, you may have your eye on a cheeky trip abroad and one of the best things you can take with you is a travel money card. But what exactly is a travel money card and what are the benefits of using one instead of your other cards?
Also known as a prepaid travel card, this is a card you can use to spend abroad without the drawbacks of using your regular debit or credit card, which often charge excessive fees everytime you pay.
The amount you’ve budgeted for holiday spending can be transferred to your travel money card before you leave, helping you to stick to your budget as there’s no overdraft facility. However, if you need to top up the card while you’re away to pay for an irresistible experience or souvenir, you can do that quickly with a transfer from your bank.
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 the best travel money card, how do travel cards work, and what benefits do they offer?
How do travel cards work?
Travel cards are 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 to 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 to book flights and accommodation.
Unlike a debit or credit card, with a money travel card, you can only spend the amount you have available in your account - a.k.a. you can’t go into overdraft or get into debt. 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. Adding money to your HyperJar prepaid card takes just seconds when you use the Payments tab to make a transfer from your linked bank account.
Despite working in a similar way 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 travel money cards are a better option than using cash or your regular card when travelling.
So, how do they 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 likely to be 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 typically don’t have to pay any of these fees with a travel money card which means you can spend more on having the greatest experiences abroad.
2. They often have good exchange rates
How do travel cards make spending abroad less expensive?
Aside from charging no foreign fees, they also give cardholders the best exchange rates available. Travel currency card providers work with payment network providers, such as Mastercard, to give their customers the most favourable exchange rates. This is a vital part of saving money while travelling because a great exchange rate allows you to get the best value in a foreign currency from each pound you spend.
Visit our blog on working out exchange rates to learn more.
3. It’s a great way to budget
When planning your holiday budget, you want to know you have enough saved to do everything you want without finding yourself in lots of debt when you get home.
A card for travel money 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 into your travel card account and only use your travel card abroad to make sure you don’t spend too much.
Some holiday money 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. HyperJar is a great example of this, offering visual jars so you can see how much you have put away for each spending category - from meals out to activities. You can also share jars with other people and both spend directly from the jar using your individual card.
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 usually freeze the card stop anyone else from spending your money, and most prepaid travel card providers let you do this instantly in an app.
5. They’re accepted everywhere
Like your regular card, a card for travel money can be used worldwide in all kinds of establishments, making them a more convenient way to pay than travellers’ cheques, despite being just as secure.
So, unless you’re spending with a cash-only business - of which there aren’t many these days - you should be able to use your travel money card to do pretty much all your spending abroad.
Who can get a travel card?
Unlike credit cards, you don’t need approval or a credit check to get a travel card since you can’t use it to borrow money. This means anyone can use a travel money card to get a better spending experience abroad.Some providers will have age restrictions on travel money cards for under 18s, but there are companies that offer cards to kids and teens. HyperJar is one of these, and many parents load one up before a school trip for the peace of mind that their child has access to money while they are away - but not the ability to overspend.
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 fees on every purchase without the risk (or hassle) of carrying around physical cash.
These are just some of the reasons that make theHyperJar 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’s handy app lets you to instantly view your card balance, track your spending, and save and budget for your travels so you can stay financially smart abroad.
It’s one of few cards that takes into account group travel such as hen dos, stag dos or trips with friends. If you’re travelling in a group, you can create a single shared jar in the app that you can all access, which all sharers can pay into before the trip and then spend from that pool of money using your own HyperJar cards.
If you’re planning on travelling sometime soon, 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.
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