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Because of the awful foreign exchange rates, a lot us in the UK have been delaying any plans for travelling to the States or the Eurozone, however there is now something available that will help minimize the potential damage to your budget: travel money cards.

So what are travel money cards, you ask?

A new entry into the plastic money family, travel money cards let you load up a card at a fixed exchange rate, which you can spend at your leisure when you arrive at your destination.

You can purchase these cards on the providers’ websites online, and the transfer of funds to the card can be made on the phone, the internet, or through SMS services, in some instances. At this time, only the pound, euro, and U.S. dollar can be uploaded onto currency cards.

How are travel money cards better than traditional credit cards?

First, you’ll find a much better exchange rate with these cards than established bureaux de change, located on the High Street. You also are given a fixed rate when you have downloaded money to the card, so you’re always aware of how much you’re spending each time it’s used on your travels; while credit and debit cards operate on a real-time exchange rate for each transaction, so it’s hard to track your spending.

So is that all there is?

No, not really. These cards, not like regular debit and credit cards, don’t have a foreign currency exchange rate costs, which can be an additional 2.75%, that some providers will add on to the basic exchange rate!

These foreign currency exchange charges also apply in shops and eating establishments; however, a travel money card does not have these associated charges. The rates charged for obtaining cash with a credit or debit card can be very high, but since you have prepaid the amount on your currency card, it is not a loan, and there are no fees for the service.

Anyway… Is there a catch?

Well, since the cards need to have funds transferred to them before you take off, you might find yourself having to save up for your holiday, instead of just relying on your credit cards. However, considering these economic environment that’s not such a bad thing, is it? Another small drawback is the charges required for ATM withdrawals, but the good news is those fees will be a lot smaller on currency cards than on credit or debit cards.

One case of this is that, when this article was written, NatWest and RBS both had a withdrawal fee of two percent, which amounts to about 6 each time you withdraw the sum of 300. Currency exchange cards, however, have a flat fee that amounts to as little as 1.50 no matter how much your ATM withdrawal is.

The real downside to these cards (which shouldn’t be a problem if you use them correctly) is that you must specify the target currency when you load the funds. If, after that, you use a dollar currency card in a euro transaction, you’ll pay foreign exchange costs up to 2.75. Of course, only some cards impose this fee, while others don’t (keep reading).

What about credit cards that can be used without FX costs?

These conventional credit cards are: the Abbey Zero, Nationwide Gold, and the Post Office. The problem that persists (i.e. the last two) is that even though they’re a fantastic deal (no foreign exchange fees), they have cash withdrawal charges of 2.5% at the time of this writing (minimum 3), and don’t measure up with travel money cards (unless you’re thinking about credit for your holiday).

The Abbey card is an great best-buy – no cash withdrawal costs or foreign exchange, however there is a rather high interest rate of 25.9% on cash withdrawals! (Note: currently the rate is 22.9% for Nationwide and 20.83% for the Post Office).

Tell me more. So which travel money cards are the best?

FairFX Euro Currency is simply the top card on the market currently, with exceptionally better exchange rates, a 0% fee for the exchange rate conversion, and a very low ATM cost (1.50). You’ll also find a low ATM fee (1.95) with the Indigo Travelcard Euro, but it has a high conversion cost of 2.75%. For no conversion fee, there’s the ICE Travelers CashCard Euro… but it has a higher ATM fee (4).

When taking into consideration dollar cards, again, FairFX is the top deal, as the currency card charges just $2 for ATM transactions, and it doesn’t have a convert charge. Another bargain for dollar cards is the ICE Travellers CashCard, because it does not have a convert charge, and the fee for ATM transactions is just $3. Keep in mind that when there is no convert cost, the cards can be used for any available currency.

What’s the best travel money card for world travel?

An ‘Anywhere Card’ has just been released by FairFX as a new global travellers card – an ideal card to take wherever in the world.

One of the great things about the Anywhere Card is that there are no ATM fees, and no loading fees either! A 1.5% transaction fee is the only fee you’ll have – and that’s at the time of the transaction, so you don’t need to worry about exchange rates.

Don’t miss out, at the moment FairFX has a special offer going which offers you a free euro, dollar or sterling card (normally 9.95) which just requires a small minimum initial load. So what are you waiting for? Get your own travel money card and start saving even more money today!