Travelex will soon make available the first prepaid foreign currency cards ever in the United States. These Cash Passport cards will be available in British Pounds and Euros.
When you purchase the card, the exchange rate is locked in at the time the currency is loaded. Unlike with regular credit card or ATM transactions, the exchange rate does not fluctuate based on the rate of the day you make your withdrawal. This may or may not work to your advantage, depending on which way the currency is fluctuating on that particular day.
According to the press release, a recent survey determined 43% of recent travelers would be likely to use Cash Passport in the future. Respondents found the security of PIN numbers and signature protection, as well as the ability to make withdrawals from ATM machines the most important features of the new product.
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The study also found that 66% of respondents in the U.S. did not exchange currency before they left for their last international destination, compared to 29% from Australia and 15% from the United Kingdom samplings. I generally don’t, or if I do I only exchange about $100 to cover the cost of transportation from the airport and necessities until I can reach a local ATM. The reason being that you get crappy exchange rates in the U.S. and many banks charge excessive fees to make the transaction.
The Travelex Cash Passport will be available at local banks, travel agencies and Travelex retail locations in North America in the second quarter of 2008. Cash Passport will be available in Pound Sterling or Euros and the card is re-loadable up to 24 times.
Cash Passport can be used to withdraw money from ATMs or be used to directly purchase goods and services anywhere MasterCard is accepted around the world (so don’t even bother taking it to South America). The card also comes with certain protections that should the card be lost or stolen the balance is protected and can be replaced either with emergency cash or loaded onto a new currency card, which is a great feature.
I, personally, will continue to use my credit cards and ATM card when traveling abroad. I might could see this card replacing travelers checks I sometimes take as emergency cash, since you will be able to get replacement funds if something happens. However, with travelers checks, you can get your money back once you return to the U.S. if you don’t use them.
You decide if this is a good idea for your travels.