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Are Travel Money Cards Safer And Better Than Other Forms Of Payment?

When people plan to voyage beyond the borders of their country, they often need money. The problem is that the currency of their home country would not be that of the destination country. Thus, travelers essentially have three options to carry this money abroad:

1. Foreign currency—that is the home currency is converted into the destination currency, subject to currency exchange rates and commissions withheld by the moneychangers. Carrying cash abroad is risky as one can be robbed and travel insurance typically will not cover losses beyond a certain amount.
2. Credit cards/debit cards—enable the traveler to effect payments to retailers and to make ATM withdrawals in the foreign currency. However, currency exchange rates still apply, even though you are not expressly informed of these rates (which are even nastier). If you go beyond your credit limit, you could run into debt, requiring you to pay charges and interest rates. Even ATM withdrawals are charged. Carrying credit cards is also quite risky as proven by the numerous credit card phishing scams. Many people have lost their entire bank accounts in such frauds.
3. Travelers Cheques—are safe and easily replaceable when lost. There are no fees or charges but the cheques cannot be used everywhere. In remote places, the cheques are not easily converted into cash. Moreover, the exchange rates tend to be uncompetitive.

Travel Cards – a better way?

In recent years, a new mode of carrying cash has come into vogue: the travel money card. A travel money card is a pre-paid currency card. In other words, the card is topped up with cash (using the internet or the phone) and you can use this to make payments. Unlike the above means of carrying money, the travel money card has several advantages, as follows:

1. There is a fixed amount on the card; you do not risk running into debt.
2. There is no risk of running out of cash as the card can be topped up at any time.
3. It is easy to use (similar to a credit card with PIN).
4. If it is stolen, you only risk losing money on it. However, if you report the theft soon enough, some providers will provide a replacement card with money back.
5. There is possibility of obtaining better currency exchange rates with the travel money card than by changing cash.
6. The prepaid card can be used virtually anywhere in the world.
7. It is completely separate from the bank account so that no phishing scam or fraud can ruin you of your lifetime’s savings.

Travel Money cards offer a safe and convenient alternative to carry cash abroad. There may be fees applicable (e.g. ATM withdrawals and for topping up) but many providers are now lowering their charges.

Normal savings accounts

Normal or regular savings accounts offer some of the highest interest rates in the UK but they have strict conditions about payments to the account and withdrawals. If these conditions are not followed you will lose a significant amount of interest. Since withdrawals from these accounts are usually limited to a few each year this doesn’t make this a good savings account for your emergency money. One good point about regular savings accounts is that they can get you in the habit of regular savings. A normal savings account can be started with a little as £5 per month but the amount will need to be paid to the account each month.

CD accounts

Savings certificates of deposit are a good choice if you can put the money away for awhile. Savings certificates offer tax free returns on investments however the certificates must be held for the full term or you will be penalized by a lower interest rate. Savings certificates with a fixed rate, have a guaranteed rate of return after terms of two or five years after which you can take the return on the deposit tax free.

Money market

Money Market deposits are another type of savings account available for residents of the UK who want to invest in a flexible manner. Fixed term deposits with a fixed rate can be arranged for periods of time ranging from one day up to five years. These are a favorite of people who have a large amount of money to invest.

National Savings Accounts

National Savings Accounts are guaranteed but pay a lower interest rate than many other types of UK savings accounts. These are very popular savings accounts in the UK since there is a guaranteed return on the investment. This account is for those who are willing to trade high interest for the security of a guaranteed account.

The type savings account that you choose is dependent on the amount of money you are able to deposit and the length of time that you can leave it alone. If you are unable to meet the conditions of your savings account, the penalties you pay will be a loss of interest on the account. You should choose your savings account carefully so that you can make the most of your money.