Travel: Stored Value Cards

Stored value cards are one of the most dynamic and fastest growing products in the financial industry. Anyone who makes purchases with a merchant gift card, places phone calls with a prepaid telephone card, or buys goods or services with a prepaid debit card is using a stored value card. Stored value cards use magnetic stripe technology to store information about funds that have been prepaid to the card.

In recent years Traveler's checks have fallen out of favor with Americans travelling abroad. We now tend to use more versatile credit and debit cards. But if you still like the security benefits of traveler's checks (for which the funds are unconnected to your bank or credit card accounts and the issuer can replace them in 24 hours) and you do not mind paying a little extra, you may consider carrying stored value cards. You can use stored value cards at ATMs to get local currency.

American Express offers a stored value card named TravelFunds (888-412-6945) which can be used in stores just like an ordinary Amex card. The sign-up fee is $15 and it can be reloaded by phone for $5.

Visa's TravelMoney cards (available through Travelex at 877-394-2247) cost about the same, work at more ATMs and are available at a discount to AAA members. Unlike the Amex version, however, it can not be used in stores as a charge card.

The cards may change rules and fees often. So, when you purchase, read their brochures with attention and ask them about your concerns and pros and cons of all types of transactions.