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Credit vs debit vs travel money cards - who wins?

How to make the most of your money on your next holiday

You’ve booked, and paid for, all of your flights, accommodation, ground transport, tours, experiences, and even some meals... So surely, when it comes to covering your family’s budget for your next holiday, you won’t be in for any nasty surprises, right? Well, new research has proven how wrong you could be. 


Comparison site, has revealed how holidaymakers can stretch their money further with a few small, but significant, cash-saving tips.



“Whether you opt for a credit card, debit card or travel money card, taking the time to read the compare interest rates, fees and foreign exchange rates will see you make the most of your spending money,” Mozo director Kirsty Lamont said. 


In its analysis, Mozo compared credit, travel money and debit cards. 


Based on a person spending $4000 during a trip to the US without ATM withdrawals, the comparison website found interest rates on credit cards ranging from 9.99% to 23.99%, annual fees from $0 to a whopping $349, and an average 2.8% foreign exchange rate. 


“It’s worth remembering that if you plan to carry a balance forward on your credit card after your holiday, opting for a low rate card such as the Westpac Lite Card with a 9.99% interest rate might be your best option,” said Ms Lamont. 


For travel money cards, consumers need to be most wary of significant differences in exchange rates. 


“With exchange rates up to 5%, picking the wrong travel money card can prove costly. So before investing in one of these products, compare the initiation costs, ATM fees and rates,” Lamont remarked.  


For debit cards, Mozo looked at a $2000 holiday spend with four ATM withdrawals and card fees for 20 retail purchases, and found fees ranging from $0 to $170 and an average usage charge of $68. But with several banks offering no fees, “a debit card is probably the best way to manage your money on holiday”. 


“With five banks offering zero fee options, this form of plastic is less likely to cut into your spending money,” Lamont remarked.


“It’s not all good news with debit cards though, with a number of providers using their own exchange rates which can see you slugged an extra 2-3% more than a provider who uses Visa and Mastercard exchange rates.” 


What method do you use when spending money overseas?


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Written by: Mark Harada
Published: 24 January 2019

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