Travel Advice - A cash card for travelers?

Credit card companies now offer prepaid money or cash cards issued in US dollars or, in some cases, in foreign currencies (principally the Euro and the British Pound Sterling). These cards can be used at ATM’s that accept the issuing companies credit cards or for purchases at any of the retailers that accept the issuing company’s credit cards for transactions.

The most widely available  currency card is the American Express TravelFunds Card but Visa is beginning to market its TravelMoney Card.  More information is available about the TravelFunds card and well we examine that more deeply than the TravelMoney card, which we describe towards the end of the article

Description - Amex TravelFunds Card

•  You sign-up for the card online (www.americanexpress.com) or by phone and use another credit card (e.g. Amex, Visa, or Mastercard) to pay the amount you want available on the TravelFunds Card.
  • There is a sign-up fee of $14.95.
  • The minimum value you can place on the TravelFunds Card varies based on the currency selected but equates to $300.
  • The maximum value that you can prepay is approximately $2700.
    • If you spend down the amount on the card, you can “reload” anytime by phone but you cannot exceed $2700 during any two-week period.
  • The reloads must be for a minimum of $100 or in multiples of $100 and bear a $5 reload charge.
  • For security purposes, the card has a three-year life span and, then, expires.
    • You can either retrieve any outstanding amount ($10.00 fee) by contacting American Express or transfer the amount to a new card but you must bring the base up (reload, a $5.00 fee) to the minimum required for the card, currently $300 .
• Withdrawals at ATMs are limited to $400 per day but this is independent of purchases that you make using the card.

Other Issues

• One of the major advantages of using this type of card is that the card account number is not linked to your bank account or credit card account and should provide greater protection than using your debit cards at ATMS or your credit card for purchases.
• The service agreement with American Express prohibits you from using the card for transactions that have the nature of cash advances (e.g., you are not allowed to use the card to reserve a car or a hotel room). However, you can use the card to pay for the rental car or the hotel room.
• An added advantage of the TravelFunds Card is that it comes with the American Express Passport and Credit Card Replacement Assistance programs.

Disadvantages

One major disadvantage of this type of card is that you have pay for the start-up and refresh amounts from a credit card.

• Check to see if your credit card holder will consider the transaction a cash advance and charge you interest on the amount from the date of the transaction.
  • Also, note that your card has a cash advance limit that may limit the size of the transaction.
  • American Express has stated that it will not charge a cash advance fee, if one of its credit cards is used for the transaction. .
• Next, the TravelFunds Card at can be used only at “Express Cash” ATMs. Using the Card at an Express Cash ATM will result in a $2.50 fee for ATM use. Additional bank fees may apply if the bank owning the ATM charges additional transaction fees on “out of network” cards.
• There are no fees to make purchases at merchant locations.
• If you want a paper report on the transactions that you made with the card you will be charged a $5.00 fee but you can access the same information by phone without a fee.
• Finally, if you use the card in for a transaction that involves currency exchange you will be subject to an exchange rate charged by AMEX or the rate charged by the retailer for currency transactions (or both).

Description - VISA TravelMoney Card

Visa offers a similar card called Visa TravelMoney that is available through your local AAA (check in advance), www.mytravelwallet.com,  and by phone at 1-877 886-3755.

Accepted at all locations that accept Visa debit cards and more than 870,000 ATMs, Visa TravelMoney provides the following benefits:

• PIN protected

• Cardholders are entitled to:

  • AAA Global Advantage Service

  • Visa Purchase Security

  • Visa Emergency Assistance Service

  • Visa Zero Liability Protection

• Multiple cards

  • You can purchase  additional cards to access the same funds, then give them to traveling companions or keep one stored in your money belt as an instant replacement card in case your primary card is lost or stolen

Fees

• The minimum card load is $250, the minimum order is $300, maximum order $1,500

• There is an activation fee of $4.95.

• Reloads are $250 minimum by calling

• A second card can be taken for a fee of $2.00

• Card cash out fee is $15

• An optional monthly statement can be ordered for $0.50 per month,

• Inquiries by phone are $0.50 each, there is a $1.25 monthly maintenance fee after 12 months of inactivity.

• No fee for ATM balance inquiries.

• Online balance inquiries are free

• Cash advance fee (in-bank) $10, $350 limit per advance

• ATM withdrawals in the US are subject to daily and weekly maximum amounts of $350 a day and $850 a week, maximum international withdrawal $2000 per 24 hour period.

• ATM withdrawal fee: Domestic: $2.50 International: $2.00

• Reload fee: Free (maximum of 3 reloads per card life)

Summary

You should decide on your own whether the convenience of prepaid money cards outweighs the fees and restrictions placed on the cards by their issuers. Although, we believe our article to be factual we recommend that you Always read the terms and conditions that bind your use of the cards before you agree to purchase a cash card.

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