A Federal Way traveler got burned by a prepaid credit card that wasn't valid in Turkey. Here's a roundup of the best ways to access cash when you're out of the country.

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Ginny Vanderlinde of Federal Way looked forward to treating her son to a trip to Turkey to celebrate his high-school graduation.

She took all the right steps to make sure she had a backup source of cash to get them through a 17-day adventure.

In addition to having enough funds in her Boeing Employees Credit Union account to withdraw cash at ATMs abroad, she loaded $1,000 onto a prepaid AAA Visa TravelMoney card, issued by South Dakota-based MetaBank.

Designed to replace traveler’s checks, prepaid cards work like debit cards, meaning you can use them either to withdraw cash from an ATM or make a purchase.

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Vanderlinde says the auto club assured her the card would work in Turkey, but when she arrived and tried to withdraw cash, all systems failed.

Turkey, as it turns out, is on a list of “high risk” countries where MetaBank blocks the use of prepaid cards due to government warnings about money laundering and the financing of terrorism.

Vanderlinde called the bank, and was told “that card does not work in Turkey.” Luckily, her BECU debit card was working fine. (The restrictions apply only to prepaid cards.)

AAA’s website (www.aaaprepaidbalance.com) includes a list of excluded countries, so either the clerk who helped Vanderlinde made a mistake or the list changed between the time she purchased the card and the time she traveled, says Dennis Chandler, marketing director at AAA Washington.

AAA apologized, refunded Vanderlinde’s money and reimbursed her for expenses.

Nevertheless, she says, “I don’t see any reason to ever buy a cash card again,” given these types of restrictions and the fees tied to prepaid cards.

Fees and rules vary according to who issues the cards (Travelex issues a “Cash Passport” card with some fees and fewer restrictions). But bottom line: They all add up to charging you for using your own money.

The AAA TravelMoney card, for instance, costs $4.95, carries a $3 charge per international ATM withdrawal ($1.50 for domestic) and a 3 percent foreign-currency transaction fee.

Whenever possible, no-fee or low-fee credit cards are the best way to pay for most travel expenses. Capital One (www.capitalone.com) issues a credit card that carries no foreign-transaction fees, and a new AAA Visa card issued by Bank of America (2 percent foreign-transaction fee) includes an embedded microprocessor chip (chip and pin) for use in countries where merchants no longer accept cards issued by U.S. banks with only magnetic stripes.

Still, every traveler needs some cash, and there are better ways than buying a prepaid money card.

Some suggestions:

• Use your own ATM or debit card (not credit card) to withdraw cash from your checking or savings account, but minimize foreign-transaction fees (up to 3 percent at some of the bigger banks) and extra fees per withdrawal (up to $5) by using the right card.

Smaller banks and credit unions, such as BECU and Sound in the Seattle area, offer some of the best deals. Their only charge is a 1 percent processing fee passed along by Visa and MasterCard for international withdrawals.

Bank of America waives fees for customers using ATMs tied to banks in its Global ATM Alliance. Schwab Bank refunds all ATM fees to holders of the Charles Schwab debit card.

• There’s little need to stock up on large amounts of foreign cash before leaving, but for those who want a small amount, Bank of America (customers only), AAA and Travelex sell euros, British pounds and other currencies. Be aware that exchange rates are lower than you’ll get using your ATM or debit card.

• Never rely on just one payment method. I travel with credit and ATM cards tied to different accounts. Some people report having problems cashing traveler’s checks, but I take a few as a backup in case electronic systems fail.

• Federal laws limit your liability on debit cards ($50 if you report the loss in two days; up to $500 if you wait longer), but most financial institutions go beyond that to offer the same “zero liability” protection they do on credit cards.

Tell your bank that you’ll be using your card in another country and ask it to set a limit on daily withdrawals.

Carol Pucci welcomes travel questions. Contact her at travel@carolpucci.com. Web/blog: www.carolpucci.com

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