Travel money cards offer financial security, says CANSTAR

AUSTRALIANS heading overseas in the next few weeks will find their money doesn't go as far as those travelling just a few months ago.

Cash in on these tips to cut your travel bills

AUSTRALIANS heading overseas in the next few weeks will find their money doesn't go as far as those travelling just a few months ago.

That's because the Australian dollar has weakened against key currencies such as the British pound, European euro and American greenback.

Australians will find their spending money has shrunk by around 20 per cent against the euro and by 12 per cent against the US and UK currencies.

According to financial research group CANSTAR a 14-night stay in an average Paris hotel will now cost about $850 more than this time last year, two weeks' car hire in France will set you back an extra $280, and a night on the tiles in the City of Lights will pull an extra $35 from your wallet.

"For the past couple of years Australians have benefited from the Aussie dollar at record levels against some major currencies," CANSTAR research manager Mitchell Watson says. "It seems to be a case of what went up is now coming down, as the value of the Aussie dollar is falling and, while we're heading into uncertain times as to where the Aussie dollar will go, there seems to be a trend at the moment that it will go down."

But it's not all doom and gloom, with travel money cards allowing travellers to convert holiday savings to the foreign currencies they will use while abroad now to lock in current exchange rates.

"This method gives a degree of protection so holiday-makers are not hit with a nasty surprise when they return home should exchange rates have moved against them while they were travelling," Watson says.

"The advantage is you're able to lock your money in against a higher rate which means you will have more money while away, you could lock your money in now and take advantage of that higher rate when it's time for your trip."

Watson describes travel money cards as "the new age travellers cheques'', with the plastic offered by financial institutions - current choices include Cash Passport as well as options from ANZ, CBA, NAB and Australia Post - providing consumers with "real-time access to their money".

"This also gives travellers access to a schemed card, like Visa or MasterCard, and the benefits and security of those enormous networks," he says.

"And there will be more offerings coming into the field, with Qantas and Virgin set to enter the fray, and this will work in the customer's favour with competition driving prices down on these accounts."

While travel money cards are a boon for jetsetters looking to manage holiday funds, the method shouldn't be used in isolation, with travellers encouraged to carry some local cash for small purchases and a credit card to use as a guarantee when checking into hotels.

"Travel money cards do vary, from what currencies are available to the fees charged when using the card," Watson notes, commenting on the fine print.

"The fees that will cost the most are load fees and ATM fees but, outside that, people must always have sufficient amounts in each currency they intend using because they will be charged non-native transaction fees if they start dipping into other currencies, and that's where the big costs come in."

The research manager has just finished CANSTAR's annual assessment of travel money cards, and has tips to get the most out of this scheme to manage vacation money while in a faraway land.

"Shop around and understand what each card offers by running different scenarios to work out what offering will give you the best value," he says.

"Allocate currency amounts carefully, by thinking how much you're likely to spend in each country you will visit, and be sure there's enough money on the card so you don't inadvertently make a purchase that will result in non-native transaction fees.

"Minimise your fees by understanding what transactions you will be charged for - if your card charges ATM fees, take larger amounts out less often - and monitor you balance online.

"Be mindful of the time it takes for an online transfer or BPAY to be credited to your account. Some methods of reloading the card are instant while others take three business days, and you don't want to be left high and dry until the funds clear."

To read CANSTAR's annual report on travel money cards visit canstar.com.au/travel-money-cards/travel-card-awards