Currently, the travel card market is booming, and there are many options available to us that promise great benefits and advantages for our vacations abroad. However, we must be very careful with the fine print, as not all cards are as good as they seem, and in many cases, they hide unfavorable conditions.
The most common lies and deceptions of travel cards are based on the promise of benefiting from free and commission-free payment services abroad, which is simply false, as nothing is free and everything has a cost.
After conducting a thorough analysis of all the travel cards available in the market for this year 2024, we have found that, indeed, most of them are better than traditional bank cards. However, there is a significant difference in their actual cost, which can amount to a considerable sum of money if you use them even just a little during your vacation.
Therefore, it is advisable to get a travel card for your vacations outside your country, but be cautious about the card’s conditions to avoid any disappointments. As we will show you below, the fine print can hide significant surprises.
By the way, if you want to have a good travel card, we save you the effort of conducting a time-consuming search, and we provide you with the answer directly: the best travel card for this year 2024 is from Wise. In this link, you can see how to apply for it and discover all its advantages and benefits.
What do travel cards hide in the fine print?
When making payments and withdrawing money from ATMs abroad during your vacation, it is always preferable to have a travel card rather than a traditional bank card since, in general, the former tends to have lower costs. However, many companies offer travel cards with misleading and somewhat confusing promotions to prevent you from discovering their true costs.
Here, we reveal the most common practices and tricks used by many poor travel card providers and what they hide in the fine print:
- Promise of international payments in foreign currency without a commission, without mentioning the intermediary’s margin: Most cards worldwide are MasterCard or VISA. These financial service providers, when making payments in currencies different from the one in which the card is loaded, do not apply the official exchange rate you can see on Google. Instead, they apply a margin to this real exchange rate, which usually ranges between 0.5% and 1.5%. You can see the exchange rates applied by MasterCard in this link, and VISA’s rates in this other link.
- Promise of free international payments in any currency without mentioning that it is only up to a limit: It is very common for many travel cards to charge an additional percentage, in addition to the margin mentioned above, once a certain amount is reached. This commission is usually around 1% to 2%.
- Promise to apply the official exchange rate for payments or cash withdrawals from ATMs without mentioning that it is only for certain currencies and on non-holiday days: There are a few cards that promise to apply the official exchange rate, and it is true that they do so. However, there’s a catch, as during holidays and weekends, precisely when people spend more, they apply a margin of 0.5% to 1%. Moreover, this only applies to certain currencies, as for other currencies, they do apply a differential compared to the real exchange rate, resulting in an additional cost of approximately 0.5% to 1%.
- Guarantee of being able to withdraw money for free from ATMs abroad without mentioning that it has a limit: Almost all debit or credit cards for travel that promise free cash withdrawals from ATMs have a not-so-high limit, beyond which they charge a commission ranging from 1% to 2%. Additionally, there are usually limits on the number of withdrawals.
- Application of differentials on the real exchange rate when withdrawing money in foreign currency from ATMs: Often, it is promised that you can have cash in foreign currency by making fee-free withdrawals from international ATMs, but it is not mentioned that a margin is applied to the real exchange rate of the respective currency, resulting in a cost for the customer generally ranging from 1% to 2%.
- Failure to explain that ATMs often charge fees for external cards: Most domestic or international ATMs will charge you a fee if you do not use a card issued by the bank that owns the ATM. Therefore, no matter how low the fees of your card are, it is difficult to avoid paying a substantial fee to the ATM’s owning bank.
- Confusion between a free card and a premium paid card: Some neobanks, fintech companies, and financial institutions promote the benefits of their debit or credit cards without making it clear that those features correspond to the paid version of the card, not the free one. This way, customers can acquire free cards believing they have certain benefits that do not apply to those cards.
- Non-disclosure of shipping costs: Many prepaid cards are advertised as free or with a very low issuance fee, but they hide the shipping costs until the very last step of the application process.
- Card renewal cost: Many companies offer cards at reasonable prices, but then, upon expiration, they offer renewals at a higher cost. Sometimes, they don’t even provide prior notice and simply send you the new card while charging your balance.
- Omission of commission for loading funds: It is common for certain cards to charge a fee for loading money onto them. Additionally, some take advantage of not charging for the first load, so the customer is unaware that subsequent reloads will incur a fee.
- Dubious promotions: To gain customers in their initial stages, many recently established fintech companies carry out very attractive promotional campaigns, promising rewards and free money bonuses frequently. One must be extremely careful because these promotions are usually subject to certain conditions that are not always clearly advertised.
- Changing conditions without notice: The travel card market is relatively new, and new financial companies constantly launch new cards. It is crucial to be cautious with these newly established companies since we have found that they frequently modify their conditions, often without any prior notice, in order to increase costs for the customer and generate more revenue.
- Absurd fees: The worst travel cards on the market have utterly absurd fees that any potential customer would simply assume do not exist without first reviewing them. Among these practices, which could be directly classified as scams or theft, we find maintenance fees, inactivity fees, balance inquiry fees, transaction fees, even for transactions in the same currency, etc.
How to determine the real cost of each travel card?
As we explained earlier, nothing is free, and everything has a cost. Therefore, all companies that offer travel cards aim to make a profit and pass on expenses to the consumer to achieve that.
To accurately determine the real cost of a travel card, you should read the fine print in the frequently asked questions section on their website. They will never show you all the costs you will incur on their promotional sales page.
To save you from going crazy comparing all the travel cards on the market for hours, we have already conducted that study, and we have found that, by far, the best card for traveling abroad for this year 2024 is from Wise. In this same link, you can check all its features in detail, and we explain how to get it.