Updated on October 4, 2023
A travel card, also known as a travel money card or Forex card, is a specially designed prepaid card that offers a convenient and secure way to carry foreign currency when travelling abroad. It’s an excellent financial tool for individuals who are planning to travel internationally.
Types of travel card
A standard credit card offers rewards in the form of cashback or points, which are redeemable for gift cards, merchandise, or discounts. Conversely, a travel credit card provides specialized advantages tailored to travel-related needs. Travel credit cards are available in both co-branded and non-co-branded variations. Co-branded travel cards often offer increased reward points when used at partner travel brands, making them ideal for those with brand loyalty. Non-co-branded travel credit cards offer enhanced benefits for travel expenses and broader options for earning and redeeming reward points, as they are not restricted to partner airlines or hotels.
Understanding Travel Card
A travel card allows you to load it with the foreign currency of your choice before your trip. This eliminates the need to carry physical cash or traveller’s cheques, as you can make payments using the card, just like a regular debit or credit card. Most travel cards support multiple currencies, allowing you to load and hold various foreign currencies on a single card. This is particularly beneficial if you’re travelling to multiple countries during your trip.
When selecting a suitable card, individuals are advised to initially consider their travel patterns. Evaluating aspects such as the joining fee, annual fee, foreign currency mark-up fee, foreign transaction fee, and cash withdrawal charges for international credit card usage is crucial. Foreign transaction charges range between 1.5% and 3.5% of the total transaction, while cash withdrawals may incur additional fees ranging from 1% to 4%, in addition to the card’s standard cash withdrawal rate. Conducting a thorough cost-benefit analysis before card application is recommended.