Funds that travel with you

If you are planning to travel cashless, make sure you always have a back-up card.

If you are planning to travel cashless, make sure you always have a back-up card.

We have just arrived home from a five-week trip overseas to Paris, London, and finally Los Angeles, to be with our son James for the birth of his first child. Despite a 50-hour labour, mother and daughter are doing fine.

The trip gave me an opportunity to update my research on the most efficient way to pay for trips overseas. The first point of difference in this trip was that it was cashless. All local transport was by Uber, we carried our own bags in hotels, and used cards everywhere else.

For years, I have extolled the virtues of the 28 Degrees MasterCard (28°), which is one of the cards I carried on this trip. There is no annual fee, small fees on transactions, and a good conversion rate. However, this time I also took my ING Visa debit card (ING).

After testing identical transactions, I found both cards offered the same competitive exchange rate, but the ING card has extra features. First, it can be used at ATMs around the world with all fees refunded, and does not charge a fee if you deposit money into the card when you are travelling. In contrast, the 28° card charges $0.95 for every deposit, as well as not insignificant fees on cash withdrawals.

Second, 28° is a credit card, and ING is a debit card. They both have great phone apps that enable you to keep track of all your spending in detail, but once again ING had the edge. Within seconds of making a transaction it appeared on the app with the name of the merchant and the Australian equivalent. 28° displayed the transaction in real time, but took about three days to show the merchant's name.

Of course, the special benefit of a debit card is that you cannot overspend, because all you are doing is spending money in the account linked to it.

Third, the ING card taught me something I wish I had known years ago. Apparently, many of those overseas transactions which appear on your statement have hidden fees. How did I find out? By noticing all the credit entries on my ING card marked "international transaction fee rebate". Most were low, around 0.42 cents, but one was as high as $15.76. The amount appears to be around 3.5% of most transactions. I reckon I got back close to $160, which goes a long way to paying my $10-a-day Telstra roaming plan.

Remember always to travel with a backup card. When we checked out of our hotel in London I offered to prepay our accommodation at the same hotel for a return visit in September. The hotel tried to process the payment, but 28° declined it. We then tried to repeat the transaction with half the cost of the original, which was approved. Next day when I looked at the app, I noticed that the declined transaction had appeared as an approved transaction, and as a result there were no funds left on the credit card.

We were then stuck between a rock and a hard place. The hotel claimed the money had not been paid to them, and after several long phone calls to Australia the 28 Degrees people said it was held "pending" until the hotel "released it". The hotel denied that. The final insult was a text from 28 Degrees Mastercard saying they were investigating the matter and expected an outcome within 21 days!!

It was finally resolved on 12 May - 10 days after it started. But imagine my situation if I had not had other cards as a backup. I would have been stranded overseas with no money! Make sure it doesn't happen to you: always have a backup source of funds when you travel.

  • Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance.