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Prepaid travel cards – The best way to spend overseas?

Prepaid travel cards are plastic payment cards pre-loaded with currency that enable you to spend as if you were using a credit or debit card

The main advantage of a prepaid travel card is that are a cheaper way to spend overseas than using a typical UK debit or credit card. It is effectively just like taking travel money with you on holiday, but without having to carry the cash.

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FairFX
0% transaction fee
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Caxton
No ATM fees
No point of sale fees
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Peer to peer currency exchange
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Prepaid cards explained

Is a credit card better to take overseas?

This entirely depends on how you think you will be spending and on the type of credit card you have.

Many credit cards charge overseas usage fees between 2-3% for purchases made outside the country they were issued in. However it is possible to get a credit card that has no fees for overseas use.

This means you can spend at the MasterCard or Visa exchange rate, which is usually very close to the best exchange rates available in the market and typically much better than those available from bureaux de change.

Credit cards – protection on purchases

Credit cards let you enjoy purchase protection under Section 75 of the Consumer Credit Act, which means the card provider is held jointly liable for any refunds you may be entitled to. This makes credit cards useful for large purchases you wish to make overseas, such as hotel bookings.

Don’t use a credit card for cash

It is unwise to withdraw cash with a credit card, even if there is no overseas usage fee you will still need to pay a cash advance fee and often a higher rate of interest will be applied to cash withdrawals than that applied to purchases.

Pay off your balance in full

A credit card is essentially the opposite of a prepaid card – you spend on credit and repay what you owe after. If you don’t repay your balance in full you will be charged interest, unless your card offers a 0% interest purchase period.

How do prepaid travel cards work?

You will need to open an account with the card provider. You can then load this account with pounds from your UK bank account and exchange to the currency of your choice.

The provider will send you your plastic card in the post, this may take around two weeks so make sure you apply well in advance of going away.

Many prepaid cards come with an app or online account where you can upload money, exchange currencies and check your transactions while you’re on the go.

The best prepaid travel cards – what to look for

There is no hard and fast best prepaid travel card, you should find one that’s suitable for your needs. You should consider:

  • Currencies available – there are hundreds of currencies in the world, some cards may offer all of them, others only major currencies, make sure to get a card that supports the currency for your holiday destination.
  • The payment provider – Check your card will be widely accepted around the world, as a rule MasterCard and Visa are the most widely accepted.
  • Exchange rates available- Exchange rates change by the second, but they also vary between currency providers, so make sure to check your card exchanges at competitive rates.
  • Fees and charges – make sure to read all the small print to check for loading fees, withdrawal fees, exchange fees, monthly or annual fees and non-usage fees.
  • Cash limits – You are likely to need to pass security checks if you wish to upload and exchange many thousands of pounds, this is for anti-money laundering and tax purposes (you cannot take more than the equivalent of €10,000 overseas undeclared).

Can I get the best exchange rates with a prepaid travel card?

It is possible to get near the interbank (or ‘perfect’) exchange rate that you see in the news and on currency tickers with some prepaid travel cards, but this will vary between card providers.

It can be difficult to find out the exchange rates that a prepaid travel card provider will offer, some will charge a commission on the rate others will give you the interbank rate but charge you other fees.

As a rule if prepaid card offers the MasterCard or Visa exchange rate you’ll be getting one of the most competitive exchange rates available. You can read more in our guide on how to get the best exchange rates.

Getting out cash – the advantages of prepaid travel cards

If you use your debit card to withdraw cash overseas you will typically be charged a fee of 2-3%.

Most prepaid cards wont charge you a fee to withdraw cash overseas, so the only fee you are likely to face is a fee that the ATM may charge.

Compare prepaid travel cards

Company Details Fee 

FairFX
0% transaction fee
0% management fees
FreeApply

Caxton
No ATM fees
No point of sale fees
Free loading
FreeApply

WeSwap
Peer to peer currency exchange
Exchange at the mid-market exchange rate
1% commission
FreeApply

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