How to choose the right travel credit card

If you're about to head overseas for a holiday, then unfortunately the Australian dollar is not your best friend at this point in time.

More so if the forecast that the Australian dollar will drop to US65c transpires and you've just purchased flights to the US in 2016. Ouch!

But there are ways to minimise your spend when heading overseas, like choosing the best travel money card or travel credit card that doesn't charge excessive fees and charges on overseas transactions.

Canstar has just released its inaugural report on travel credit and debit cards so we've asked research manager Mitchell Watson for some advice on how to choose the right card.

Mitchell says choosing the right account or mix of accounts when travelling overseas can save you money as well as a few headaches.

"There are three main accounts available for use when travelling overseas - credit card, debit card and travel money card. The latter is a purpose built card. It allows you to load currency onto a card and provides that peace of mind that whatever happens with exchange rates, the money in your account won't change," says Mitchell.

"The other two types of cards you may already have in your wallet, but that doesn't mean they are the best option for your travel. A recent comparison on debit cards on an overseas travel scenario (excluding exchange rates) found that the average account charged $190 in fees. That is an amazing amount of money and could be put to better use for maybe some Broadway tickets or a night's accommodation. The good news is that you can find an account that could charge as low as $0."

"So what do you need to consider when selecting the right product? The main points of comparison will be exchange rate, fees (which includes currency conversion, ATM and Point of Sale fees) and of course access. In addition, on a travel money card it will be the cost load and reload money onto your account."

While we are fortunate in Australia that most cards are accepted broadly, that may not be the case overseas. Particularly when using a travel money card be sure to have an alternate payment option. This could be using a combination of a travel money card with a credit card or maybe all three types of accounts. Relying upon one option will inevitably throw up some challenges when travelling.

And one last bit of important information from Mitchell: "Whatever you choose keep your cards safe and have the number of your bank should you need emergency assistance."

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