Travel Prepaid Cards Explained
Over the last year the number of prepaid debit cards on the market has increased and with this comes some great opportunities to grab the best value for money when you are either exchanging foreign currency or spending it abroad using a prepaid card.
What is a prepaid travel card?
Prepaid cards are relatively new to the market, but their popularity had increased significantly over the last couple of years, for very good reason.
Essentially they work in exactly the same way as a debit card and generally are backed by either Mastercard or Visa so they can be used at hundreds of thousands of locations globally and can also be used at ATM’s across the world.
The difference between a traditional debit card (which is linked to your bank account) and a prepaid card is that a prepaid card works like a wallet/purse, you top it up with money which can then be used to spend when you need it. Once all the money is spent you then need to top it up again.
What are the benefits over using a credit or debit card?
There are a number of significant benefits over a prepaid card when you are abroad.
1. They are safe to use – you can only ever lose what you have topped it up with, if it was stolen.
2. They are not linked to any private bank details meaning if it is lost or stolen there is nothing to worry about.
3. They are great for budgeting when you are abroad, as you can only spend what is ever on the card, unlike a credit or debit card.
4. If you do lose it, some providers offer instant western transfer so you can get your money immediately, while other provide you with an emergency card that you can activate.
5. And most importantly they offer exceptional rates of exchange – that are fixed when you top it up, so you know how much foreign currency you have to spend.
What providers offer prepaid travel cards?
At the moment there are a wide range of providers who offer prepaid cards including;
Things to watch out for
There are a few things you do need to watch out for when using a prepaid travel card
1. Check the terms and conditions across a range of travel cards before you decide which one is right for you. They are all slightly different and have slightly different rates and fees.
2. Generally speaking they are not backed liked a credit card purchase is – so if you make a big purchase while you are away and something goes wrong, you can’t claim the cost back like you would be able to do with a credit card purchase.