Choi, an IT startup employee in her 40s, recently began using her travel card not just for overseas trips but also as an investment tool to profit from currency fluctuations.
In September, when the won traded at around 1,320 won against the U.S. dollar, she preloaded dollars onto her Travlog card issued by Hana Card. When the rate later rose to the 1,390-won range, she converted the remaining balance back into won, earning about a 5 percent gain.
“I used to use my travel card only when traveling abroad, but with exchange rates fluctuating so much lately, I’ve started treating it as a small-scale investment,” she said. “It’s convenient because I can check rates in real time. I’ve even set up alerts in the app so I don’t miss the right timing.”
Travel cards are specialized payment tools for foreign currency transactions jointly offered by card companies and banks. They typically waive currency exchange fees or offer preferential exchange rates when converting won into foreign currencies.
As the won-dollar exchange rate has become increasingly volatile in recent months, swinging between the 1,300 and 1,400 won range, travel cards are gaining traction as tools for profiting from exchange rate movements.
Data from the Credit Finance Association of Korea shows that overseas debit card spending by individual customers at nine major domestic card issuers totaled 3.35 trillion won ($2.3 billion) in the first half of this year, up 831 billion won from the same period last year.
Industry officials say the surge reflects not only the rebound in overseas travel demand but also the growing popularity of travel cards.
Because exchange rate gains rely on buying foreign currency when the rate is favorable and selling it when it rises, attention is also turning to whether reconversion fees apply when changing foreign currency back into won. Such fees can significantly reduce exchange rate profits.
While most travel cards issued by major companies charge between 0.5 and 1 percent for reconversion, Toss Bank’s travel card, which is linked to its foreign currency account, stands out as the only travel card currently available that offers zero fees for both currency exchange and reconversion.
Since profiting from exchange rate movements often requires keeping funds tied up for a certain period, some users are also opting for products that offer interest benefits.
A prime example is Shinhan Card’s SOL Travel, which is linked to a Shinhan Bank foreign currency account offering an annual interest rate of 2 percent on U.S. dollar deposits.
With the use of travel cards becoming more diversified, card companies are upgrading their offerings to cater to consumers seeking more comprehensive foreign currency asset management.
“Travel cards are gradually transforming from simple travel payment tools into comprehensive foreign currency management platforms,” a credit card industry official said. “We aim to expand service options in ways that enhance convenience while providing users with greater flexibility.”
