Visa TravelMoney Cards and American Express Travel Funds

ABOVE: Visiting the ATM.

VISA and American Express have introduced new prepaid cards that combine the flexibility of ATM or debit cards with the safety of traveler's cheques. At this writing the cards are available only in North America but they can be used in any part of the world to withdraw cash from ATM machines. The cards offer safety and convenience - at a price - watch out for hidden conversion annd withdrawal fees.

Prepaid ATM cards, also known as stored value or prepaid cash cards, are used primarily by travelers, privacy dvocates and the credit challenged. There also are people who simply don't want to buy goods on the Internet with anything linked to their checking account (as is the case with traditional debit cards). There's also a market for repaid gift cards, prepaid casino gambling cards, and some employers offer prepaid "paycheck" cards to workers without a bank account, in lieu of actual checks. According to research done by marketer Stored Value Inc., the total market for prepaid ATM cards is expected to grow by 338 percent, to almost $800 million by 2005.

Safety is one of the main attractions of prepaid cards, since if they are lost or stolen they are easily replaced. And the replace travelers checks as they are easier to carry and you do not need to queue up in at times long lines inside a bank (if you can find that's open) in a foreign country. Just pop them into any compatible ATM worldwide and you get cash. However you will still need to carry your credit card in places where prepaid cards might not work, for example to make hotel reservations or rent a car.

Visa TravelMoney is a pre-paid travel card that gives you 24-hour access to your travel funds in any local currency. With Visa TravelMoney, you can conveniently obtain cash to pay for taxi and metro fares, gratuities, museum entrance fees, telephone calls, souvenirs, snacks, and many other cash expenses.

Your dedicated travel funds can be quickly accessed from more than 924,000 Visa ATMs in more than 150 countries. Your funds are fully protected by your personally-selected PIN (personal identification number). And because Visa TravelMoney is a pre-paid, disposable card - not associated with any of your bank accounts - you can simply throw away the card when your funds are depleted. Worldwide 24-hour cash access. You can access your dedicated travel funds in local currency at more than 924,000 Visa ATMs in more than 150 countries.

Warning: If you make purchases or withdraw cash in a currency other than the one on the card, VISA smacks you hit with an astonishing "conversion fee" of 7%.

The American Express TravelFunds Card is a prepaid travel money card that is embossed with your name and a card number. The TravelFunds Card can be used virtually worldwide at ATMs and retail merchants that welcome the American Express® Card. Before leaving on your trip, you put the amount of money you want to take with you, up to $2,750USD, onto the Card.

The AMEX TravelFunds Card allows you to load money on the Card multiple times and, if lost or stolen, the funds on the Card are replaceable, usually within 24 hours. In addition, the TravelFunds Card offers access to valuable travel services, such as Passport and Credit Card Replacement Assistance. See below for details.

The TravelFunds Card is available in the following currencies: U.S. Dollar, British Pound Sterling, and Euro.

Warning: If you withdraw cash or make purchases in a currency other than the one on the card, you're charged the Interbank conversion rate (about 1%) plus an eyewatering 3% surcharge for a total of 4% or more.

Conclusion: As a way to budget and control expenses, these cards are fine but the high fees makes them less attractive compared to carrying a standard ATM card and a credit card as backup.