Prepaid Travel Cards - What You Need To Know

What is a prepaid travel card?

A prepaid credit card is used exactly the same way as a debit card. The idea is to preload the card with money before going on your travels, allowing you to store multiple currencies.

The beauty of a travel card is the ability to avoid lowball exchange rates and overseas transaction fees while carrying a secure payment method.

They're great for budgeting, you can top it up and send money back as and when you please. You can keep track of your spending habits and secure your money without the risk of losing cash.

Benefits of using a prepaid travel card

• Save on paying fees when abroad: Using your normal credit or debit card abroad may land you with unnecessary transactions fees. You can avoid these with a travel card.
• Competitive exchange rates: If you get a travel card in plenty of time before going away, you can wait for a favourable exchange rate before loading funds. You can lock your savings, even if the currency rate falls.
• Secure your money: Cash can go missing, that's why we can find some down the back of our sofas. Having your money in one place is not only convenient, but you can pin protect your card for added security.
• Personal liability. If you accidentally damage someone's property or injure them. In this case, you'll be covered financially for legal costs if a claim is made.
• Track what you're spending on a daily basis: Typically you can keep track of your travel card spending through an app, helping you steer clear of overspending.

Types of prepaid travel cards

It's possible. Let's take a look at some scenarios in which you may already be covered by an existing policy:

• Single currency cards: As the name suggests, these cards only store one currency. When you load money on your card, it's converted to the currency of your choice using the live exchange rate
• Multi-currency cards: Definitely useful it you're travelling to multiple locations with different currencies. These cards allow you to store multiple currencies with the option of transferring funds between each wallet
• US dollar cards: Suited for trips to the USA or any other countries using the dollar currency
• Euro cards: Perfect if you're planning a trip to Europe, visiting one or more countries in the Eurozone.

Alternatives to prepaid travel cards

Travel money

It's probably the most comfortable and universal payment method. It is a risk as it can be lost or stolen, whereas you can pin protect a card. Certain travel insurance policies will cover lost or stolen money, so this is a good way to protect any money you're taking with you. On the other hand, certain vendors abroad may only accept cash as a payment method.

Credit cards

You'll be able to makes purchases with your credit card by lending money, but you're likely to incur transaction fees abroad. You can get a travel credit card that works in the same way but helps you avoid these fees.

What are the best prepaid travel cards available?

There are certain UK debit cards that offer some features a prepaid travel card provide such as no transaction fees abroad. Asda, Sainsbury's, TUI, Travelex and the Post Office all offer their own travel card, but charge some form of commission to load money on the card.

The Post Office and Travelex can store up to 22 different currencies, 7 more than the other competitors. There are minimum and maximum limits to what you can load and store on cards and you can incur inactivity fees. Caxton, Easy FX and Fair FX let you load money for free, the latter company let you store up to £50,000 on the card.

Easy FX and Fair FX let you withdraw £1,000 and £1,500 per day, respectively. This is considerably more than other providers who offer a maximum £500 daily withdraw limit.

Prepaid travel card features vary between providers, so the best card for you should be determined by your needs. Consider what you need from your card, some providers offer better terms on certain features such as:

• The number of currencies you can store on a card
• The fee for loading money on a card
• The fee for using a foreign ATM
• The exchange rate used
• Minimum amount you can load on a card (in one transaction and overall limit)
• Maximum amount you can store on a card
• Inactivity fees (if any)

Tips for using prepaid travel cards abroad

Choose the right card

As mentioned before, you should choose a card that offers you the best features for your needs. Currency options, fees you may incur and exchange rates all have to be considered to make sure you get the card best suited to your trip.

Card security

If your card is lost or stolen, you can freeze it to ensure no unauthorised transactions are made. It's important you act quickly as prepaid cards aren't generally covered by the Financial Services Compensation Scheme (FSCS). You may have the option or unfreezing your card if it's found, but you can order a replacement to be sent to you while you're away.

Backup payment methodds

You should always consider taking alternative methods of payment just in case. If your card is lost, stolen, or you can't process a top up for any reason, it's worth having another means of making payments. Just remember, if you're using a credit or debit card abroad, you may be charged a transaction fee.

Reloading options

Most travel card providers have an app you can download to top up your balance, manage your money and freeze if necessary. Some offer desktop or phone services, your provider may even have a branch you can access while you're abroad.

Usage and acceptance

It may sound obvious, but you should check first whether the currency you'll be using is offered by your prepaid travel card provider. It's also worth checking if the country you're visiting generally accepts the card you're planning to use - as some aren't accepted.