better banking

Travel cards

01 Dec 2015

Travel cards can provide a safe and convenient way to pay for things when you are overseas. Before travelling money is loaded onto the card and used to pay in local currency when you are overseas. There are a number of cards to choose from with varying features and conditions.

We sometimes receive complaints about how travel cards work and the types of fees that may apply.


How travel cards work

The currency default on New Zealand-issued cards is New Zealand dollars. Money loaded onto a travel card can be converted to the foreign currency or currencies you intend using on your travels. Most cards allow you to have funds in several different currencies at once. You can generally load money onto a travel card in a branch or online.  The currency conversion fee charged may differ, depending on how you load the funds. Internet banking loads may take two or more days to be processed.

If you have a travel card from your bank which is issued by another institution, you may not be able to transfer foreign exchange funds directly from your bank accounts to the travel card.  It will need to be converted to New Zealand dollars first, as will any foreign currency in cash that you want to load to your card.

If you load funds in a foreign currency the exchange rate will be determined at the time the funds are actually loaded onto your card. The exchange rate applied may also differ depending on whether you load the foreign currency to your card in a branch or online.

When overseas, use your travel card for purchases as you would a debit or credit card at home. If you have enough local currency loaded, you can pay for purchases in that currency without incurring more currency conversion charges. Note that if you withdraw cash from an overseas ATM using your travel card, some providers charge for this.


What fees and charges might apply?

Most travel cards have a setup fee which you pay when you get the card. There may also be fees for other things, including:

  • loading money onto a card
  • withdrawing money from the card at an ATM or over the counter
  • an inactivity fee if you do not use your card for a specified period of time.


What about currency conversion rates on travel cards?

If you do not have enough local currency to make a payment, the purchase may be deducted in another currency and currency conversion charges apply.  The charges will differ depending on if you:

  • use funds in one of the other currencies you have on the card
  • spend in a currency not offered by your travel card provider.

Read your travel card’s terms and conditions to understand all the applicable fees and charges.


What types of complaints about travel cards can the Banking Ombudsman consider?

Our power to investigate travel cards complaints depends on whether your travel card has been issued by a Banking Ombudsman Scheme participant. Some banks issue their own travel cards. Other banks offer customers travel cards which are issued by other financial service providers.

If your travel card was issued by a bank we can consider complaints about the accuracy of advice and card information. We can also consider complaints about problems using the card, subject to the limits in our Terms of Reference.

If your travel card was purchased from your bank but issued by another financial service provider our role is more limited. In these cases we can only consider complaints about the accuracy of information and advice given by the banks, but not problems using the card.

For all other complaints you will need to contact the card issuer or distributor’s dispute resolution scheme. These details should be listed in the card terms and conditions. We can refer you to the right place to make your complaint if you need assistance about which organisation to take your complaint to.


Tips for getting the best out of a travel card

Here are some tips for getting the best out of a travel card based on complaints we have investigated:

  • try to have enough of each local currency you want loaded onto your card to cover your costs in each destination
  • have another means of accessing funds while travelling
  • balance the convenience and safety benefits of using a travel card to withdraw cash against any costs as some travel cards offer free ATM withdrawals, but others charge a fee
  • be aware that if you use your travel card to check in for services such as hotels, cruises or rental car companies, these businesses will generally ‘pre-authorise’ an amount to your card to check its validity and ensure there are sufficient funds to pay for at least part of transaction. Until this pre-authorisation is lifted you won’t be able to use those funds for other purchases so you may wish to consider taking a credit card for pre-authorisation
  • before buying a travel card read the card’s terms and conditions – this is where details about authorisation holds, for example, would be explained.

You should also protect your travel card and its PIN as you would any other bank card. Find more information on this in our Quick Guide on Looking after your credit and debit cards and PINs.


Case note

Mrs S considered the fees and exchange rates applied to her travel card were not properly disclosed.

Mrs S had purchased the card from her bank, known as a ‘distribution outlet’. However, the card was issued and distributed by other financial service providers. We confirmed Mrs S’s complaint was about fees disclosure and that it was appropriate for the complaint to be referred to the card distributor’s dispute resolution scheme. Mrs S agreed and we referred the complaint on her behalf.


Download a PDF version of this Quick Guide