From frequent flyer to happy buyer

The fortunes of Qantas and Virgin Australia rarely fly straight and level, but the airlines' frequent flyer programs are money-spinners in their own right – and now they're expanding their reach into the "travel money" sphere.

It's a smart move. Prepaid travel money cards are becoming the new traveller's cheques, and by baking this functionality directly into their frequent flyer cards, Qantas and Virgin Australia stand to gain a piece of the action.

For those not yet up to speed, travel money cards are effectively prepaid debit cards which you load up with Australian money and then transfer into a "virtual" wallet of one or more foreign currencies.

The card can be used over the counter (like a credit card, or more accurately debit card) or online, with the option of withdrawing cash at an ATM.

The exchange rate is a few points off the average over-the-counter cash rate, but that's the cost of such convenience.

They also provide a degree of insulation against the fluctuating fortunes of the Aussie dollar.

If you loaded up your travel money card in April – when the Kanga was riding high at US$1.04, €0.81 and £0.69 – you'd have over 15% extra cash in hand compared to today's low rates.

As somebody who spends a fair amount of his time hopping (and shopping) from country to country, travel money cards are the bee's knees – provided you choose them and use them carefully.

Cash remains king


But my go-to strategy for foreign currency remains cash. There's nothing quite like coin of the realm.

I'll usually stock up on a range of currencies for my most-visited countries whenever the Aussie dollar appears to be at a high point – even if that's a relative high, with a likely dip around the corner.

If I'm short on time before my travels, I head to the website.

This not only offers competitive rates – certainly better than you'll find at most Travelex kiosks, especially at the airport outlets – but paying for a currency order via BPAY means there's no commission, and I can pick up my money at the airport the day I fly out.

One wrinkle is that I don't use credit cards.

I cut mine up over a decade ago – well, truth to tell, my bank did the cutting – but as soon as I was in the black I never looked back.

This puts me at odds with most frequent flyers who delight in packing a wallet full of plastic, carefully chosen to yield the maximum number of points and perks.

But I've got a debit card and zero debt, and I'm simply happier living this way.

So for me, travel money cards are a good fit into my globetrotting habits, and both the Qantas Cash and Virgin Australia Velocity Global Wallet travel money cards got my attention.

Qantas Cash vs Velocity Global Wallet

How do they stack up?

Overall, Qantas Cash comes out ahead in my book.

It offers a full set of eight overseas currencies to use at any time and doesn't charge a fee to load money into your account, whereas Virgin's Global Wallet restricts you to four foreign currencies and hits you up for a $1 load fee.

That said, Virgin's Global Wallet lets you create a free "virtual card" with its own unique number to be used for online or telephone purchases.

The card can be deleted after use and a new one, with a new number, created for no extra charge – very handy if you're worried about online security and your card being scammed.

And while I hear plenty of grizzles about the exchange rate, people all too quickly quote the numbers they hear on the news or see online – for example, at time of writing, $1 was officially worth US89c and 57p – but forget that you can't buy at this rate.

Most banks were selling around US85c, with currency exchange shops offering US87c if you're lucky, so that Qantas Cash was trading at US86.8c seem a decent deal.

Plastic not-so fantastic

Of course, there are some caveats with these cards.

It takes up to three days to load them with money – there's no 'instant' option, so you need to load up in advance of your trip.

Once overseas, you'll be stung a few dollars for each ATM withdrawl, and that's not taking any operator fees into account.

I avoid relying on ATMs for that reason, and always prefer a pocketful of cash.

And less frequent travellers can be hit by an inactivity fee for not using the card – Qantas charges $1 per month and Virgin double that. Okay, guys – explain to me again why not using my card causes such an impost on your business?

What's your strategy for managing your travel spend: cash, credit card or travel money cards? And will the new Qantas Cash and Virgin Australia Global Wallet cards work for you?

David Flynn is a business travel expert and editor of Australian Business Traveller.

Twitter: @AusBT