Finding the best prepaid travel card for you
Prepaid travel cards can make going abroad a lot easier. Learn more about how these cards work and to best utilise them in our guide.
What is a prepaid travel card?
A prepaid travel card is a card that can be pre-loaded with money before you set off for a trip abroad. Also known as a currency card, a prepaid travel card is intended to be the main way that you spend your money when overseas.
They’re a great way to avoid bringing lots of cash with you – which can be easily stolen or lost. Plus, you can only spend the amount that you’ve pre-loaded onto it, helping you stick to your budget.
One of the main reasons travellers get prepaid travel cards is because an exchange rate is locked in. This means that every time you make a purchase or withdraw cash, you’ll be using that exchange rate.
How do prepaid travel cards work?
To get a prepaid travel card within the UK, you will need either a valid passport, UK driving licence, or an EEA card. When you first purchase a prepaid travel card, you need to decide how much cash you want to pre-load onto your card.
When loading a card, you can either load it up with the currency used in your destination – locking in a set exchange rate in the process – or load it with pounds to use the exchange rate of the time of your spending.
The exchange rate that you receive will depend on your provider, making it wise to shop around before committing to one.
The best prepaid travel card providers will use the interbank rate (often considered the perfect exchange rate). Other providers will use the rates that have been set by either Mastercard or Visa, while certain providers will use these rates plus an additional fee added – often 1-2%.
With these cards, you’ll be able to pay directly for a variety of purchases when abroad, such as meals or activities, and withdraw cash from ATMs – although there may be additional fees for doing so.
To manage your card, many providers will have an app that will allow you to track your spending and potentially add more money to it.
Do travel cards come with any charges?
A prepaid currency card will have more charges and fees than most credit cards, so it’s important to be aware of these before getting one.
The better prepaid travel cards will exclude the charges below, but you should expect the following fees on many available on the market:
Application and replacement fees:
Some providers will charge an application fee to open the account, as well as a delivery fee if you’re ordering online.
These cards will expire after a certain time, with the common timeframe being 12 months. You’ll be charged a replacement fee to use it again after its expiry. This is worth keeping in mind if you plan to use prepaid travel cards for annual holidays.
Some cards will also charge a monthly fee for simply having them. This charge can make travel cards more expensive.
When using a prepaid travel card, you will be charged a small transaction fee when using one for retail purchases or withdrawing from an ATM.
These fees can either be charged as a percentage of each transaction, or a flat fee per transaction.
If you’re making a lot of small value purchases, the percentage transaction fee is a better option. If you plan on making less frequent, higher-value purchases, opt for the flat fee.
Providers want you to regularly use your travel cards. Because of this, you’ll be penalised if the card isn’t used for a while. This charge is usually £2/month if you haven’t used the card in 12 months.
Top Up Charges:
When topping up your prepaid travel card with a credit card, you can be charged a whole host of avoidable fees. When topping up with a credit card, you can be charged withdrawal fees, interest and potentially more.
This is because buying currency on a prepaid travel card is considered a cash withdrawal. That’s why it’s best to use a debit card if you’re topping up currency because debit cards aren’t subject to these charges.
As well as the above, some providers will have their own terms and how they charge for currency exchanges. For example, some providers will only charge a transaction fee if you’re making an exchange during the weekend.
Other providers might charge an additional fee if you exchange more than a certain value in a 30 day period.
You can also expect a small fee every time you make an exchange. This fee will depend on the currency you’re loading onto the card. For example, popular currencies such as the US dollar will cost less than currencies like Lira.
What are the advantages of using a travel money card?
There are plenty of advantages to using a travel money card.
The main advantage for most people is that a prepaid travel card removes the need to take a lot of physical cash with you that could be lost or stolen.
These cards are also great for people who want to stick to a fixed budget when travelling because there’s no way to exceed the amount you’ve pre-loaded without topping it up. This makes it a good tool for those looking to budget.
Despite there being many fees associated with prepaid travel cards, one fee that you don’t have to pay with a travel money card is foreign exchange fees, providing the currency on your card matches that of the country you’re using it in.
Some prepaid travel cards will allow you to load multiple currencies onto your card, stored in different ‘wallets’.
For example, you can have £150, $275, and €325 stored separately from each other. This option is great if you plan to travel to multiple countries. If lost or stolen, prepaid travel cards are also easy to cancel quickly, making them a safe option when travelling abroad.
Is a travel money card better than cash?
Prepaid travel cards are certainly safer than carrying cash with you because if you lose it, you can cancel the card, keeping your money safe. Prepaid travel cards can also be more budget-friendly and easier to track your spending than cash, especially if your provider offers an app where you can check each transaction.
How much money can you put on a prepaid card?
The maximum amount you can put onto your travel card will depend on your provider, so it’s worth shopping around to find a limit that suits you.
Many providers will have a maximum limit, with the average being £10,000. This is the maximum amount of money you can have at one time on your prepaid travel card.
There is also a maximum annual balance limit, which is the amount your card has had on it over the course of a year.
For example, if you’ve had two trips in a year and loaded £3,000 for the first trip and then £4,200 for the second one, your annual balance would be £7,200. On average, the maximum annual balance limit for a prepaid travel card is £30,000.
When loading or topping up your card, there’s also a maximum and minimum amount you can put on it each time. This usually ranges from £50-£5,000 but can alter depending on your prepaid travel card provider.
What are the disadvantages of prepaid cards?
Despite being designed to work at places that accept Mastercard and Visa, frustratingly for travellers, some retailers, hotels and restaurants don’t accept these types of cards.
The most significant are hire car companies, so it’s important to have a backup debit or credit card to pay for this.
It’s worth noting, most hire car companies will only accept major credit cards as a form of payment and will ask to keep your credit card details on file as a deposit.
It’s also been reported that many petrol/gas stations and motorway tolls won’t accept these cards either, so it’s best to have an alternative method of payment for these expenses.
Additionally, not every currency is provided by each card, so you’ll have to shop around to find one that offers the currency for the location of where you’re going. Most will have the 30 main currencies.
Many cards will have a withdrawal limit per day, some of which can be small and frustrating if you’re not aware of them. If you plan to withdraw a lot of cash when on your travels, avoid prepaid travel cards with a £100 per day limit.
Because your exchange rate is set when you take out your travel card, there is a risk the pound strengthens during or before you leave, meaning you could be left with a worse exchange rate. However, the opposite is also true – if the pound weakens, you will have gained.
Are there any alternatives to prepaid travel cards?
Specialist travel credit or debit cards could be a good alternative because they offer a near-perfect exchange rate (the interbank rate) when you spend or withdraw.
They’re also a bit less of a hassle because you don’t have to worry about pre-loading the card before you set off.
If you use these types of credit or debit cards, you’ll get Section 75 protection on purchases that cost between £100-£30,000.
Section 75 protection is where a card provider must protect your purchases, meaning that you are entitled to refunds if items are faulty, didn’t arrive, or if there are other problems with them.
You don’t get this protection with prepaid travel cards.
Prepaid Travel Cards FAQs
Can I use my prepaid travel card in the UK?
Yes, prepaid travel cards can be used within the UK. However, you may be subjected to fees when using these cards outside of the country where the loaded currency is used. This fee is usually 2.5-2.75% for every transaction and is called a cross-border fee.
Can I use my prepaid holiday card in multiple countries that use the same currency?
Yes, if you’re visiting multiple countries that use the same currency, then you can use your card with no additional fees. This is why getting a prepaid euro card is a good option for travellers in Europe because it allows you to use one card in multiple locations. If you’re visiting multiple destinations in the continent, it’s wise to search for the best prepaid travel card for Europe.
How quickly can I get a prepaid travel money card?
When ordering a prepaid travel card online, it will be posted directly to your door and should usually arrive within 3 days.
Where can I get prepaid travel cards from?
The common way to get a prepaid travel card is to order them online from the provider of your choice. If your provider has a store, you can pick them up from there to get your card instantly.
It should also be possible to get a prepaid travel card at the airport, depending on where you’re flying from. Many providers will have kiosks set up, but do note that the rates and charges could be more expensive when bought at the airport.
Is it worth getting a prepaid travel card?
If you want to lock in an exchange rate before you travel and know your fixed budget, then prepaid travel cards are worth it, even more so if you’re frequently travelling within a year.
Alternatives like travel credit cards are an option. They too have near-perfect exchange rates, and you get the added bonus of Section 75 protection on purchases ranging between £100-£30,000.
Are prepaid cards safe?
Prepaid travel cards are a really safe way to spend while you’re overseas. They’re safer than carrying cash that you may have to leave at your accommodation. You can also cancel these cards easily if they’re lost or stolen, making them even safer.
Can you withdraw cash from a prepaid travel card?
Absolutely, you can withdraw cash from prepaid travel cards. You’re likely to have to pay a fee for this, either as a percentage of the amount you’re withdrawing or a fixed fee per transaction – usually £1.50-£2.50.
Some prepaid travel cards will have a withdrawal limit, so keep this in mind when selecting the best prepaid travel card.