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What’s the deal?
A sterling-denominated “pre-paid” card for overseas spending and cashpoint withdrawals, aimed at travellers going outside the eurozone and US.
The Global Traveller card, from Caxton FX, a currency company, offers a potentially lower-cost option to taking credit and debit cards overseas.
Holders pre-load pounds on the card, which carries the Mastercard logo, and can use this balance to withdraw currency from overseas ATMs or make purchases abroad for no administration fee.
Exchange rates are 2.5 per cent higher than the underlying wholesale currency market.
The card has no upfront or annual fee. It can be recharged online, by phone or text from anywhere in the world.
For travellers to the US or Europe, Caxton also has dollar and euro-denominated cards.
Is this good?
Most debit and credit cards charge withdrawal fees for taking currency out of foreign cashpoints. Credit cardholders are also subject to interest on cash advances, while some debit cards levy transaction charges on purchases abroad. In addition, debit and credit cards typically load exchange rates by 2.75 per cent.
A few cards have no FX loading on purchases, while one debit card – Nationwide’s Flexaccount Visa – also has no currency withdrawal fee.
However, some of the cheapest conventional cards are increasing their fees. Nationwide – which has had no currency loading on its credit and debit cards – is imposing a 0.84 per cent exchange charge, rising to 1 per cent in coming months, for spending and ATM withdrawals outside Europe. Thomas Cook’s previously no-fee credit card will charge a 2.5 per cent fee from next month.
Caxton FX claims its cost structure will be maintained.
What’s the catch?
As well as the 2.5 per cent exchange rate levy, users need to pre-fund the Global Traveller card. This balance does not earn interest, and holders are charged £1.50 if they want to unload the surplus.
Foreign ATMs may charge for withdrawals, and these fees will be passed on to card users.
Also, balances held on the card are not covered by the Financial Services Compensation Scheme, though customers are not liable for losses if the card is stolen.
What’s the alternative?
Caxton’s euro and dollar cards allow users to lock in to exchange rates when cash is loaded. The company levies a 1 per cent fee for these exchanges, but charges for cashpoint withdrawals. FairFX has similar euro and dollar currency cards. The Post Office and Abbey Zero credit cards have no foreign exchange loadings. Even after Nationwide’s fee increase, its cards still offer better value than Caxton’s, especially in Europe – where it has no currency fees.
How do I find out more?
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