Prepaid Travel Money Cards are the latest item to be offered to travellers.
How do they compare to your current debit card, or your credit though?
As usual, it depends on what you want to do and where you want to spend your money.
What’s the difference when travelling?
The currency for the card is usually the base currency of the location of the issuing bank. If you live in the UK, your credit card is likely to use British Pounds.
When you use a credit card abroad, your are not in control of the exchange rate at the time that you make the purchase. The credit card company has a fixed percentage that they can charge on foreign exchange transactions, but these are usually high when compared to using a prepaid travel card.
You also usually get charged a great deal when you use a credit card abroad, especially when drawing foreign currency at an ATM.
Commonly, if you have a balance outstanding on your credit card, the last item that comes off that bill, will be the foreign currency withdrawal that you made at an ATM abroad. So, you’re likely to pay interest on that small amount of emergency cash that you withdrew right until the whole card balance is paid off.
Please check the T’s & C’s of your card for the specific costs.
Travel money cards:
Check the small print! When comparing one prepaid travel card with another, just take the time to review what charges there are for cash withdrawals abroad and how much it costs to load the card each time.
Card fees: Quite a few prepaid travel money cards have a one-off fee to cover the first load of dollars or euros.
I have found one company that offers a FREE card if you load their minimum amount the first time. Currently, the minimum load value is set at £200, but if you’re going to use the card properly, you are likely to want to load at least that amount on the first occasion.
Load fees: Some prepaid card issuers charge each time you load, irrespective of how you pay. gcencurrencycards don’t charge for a currency load if you use a debit card in pounds to buy your dollars or euros. They do charge if you use a credit card, so take advantage of the free option.
Exchange rates: When you compare prepaid travel cards with buying cash at a travel kiosk, you’re in for a shock.
Travel cash kiosks ( like at airports) typically take about 10% of your money to change from one currency to another. They may even charge a transaction fee on top.
Prepaid currency travel cards typically take between 2.5% and 3%, and no commission or transaction fees provided that you pay with a debit card.
That’s a saving of £75 when changing £1000 into Dollars or Euros.
How do travel money compare to credit cards?
When you use a credit card abroad, and the currency is different to the card’s. then you accept whatever exchange rate the card company gives you.
When you use a Prepaid US Dollar Travel card, or a Prepaid Euro Travel card, then you load the card with the currency when you wnat to. You know exactly what amount of euros or dollars you are getting.
If the exchange rates are especially good, you can load the card, and use it much later. Of course, the rates may get even better after you’ve bought your currency, so I suggest you load it little and often. This can be done anywhere where you have online access as you have your own online account and statement.
Are prepaid travel cards safe?
Well, they are not connected to your bank account so no-one can get to your bank account if you lose the card, or card details.
The cards usually have a 24 hour point of contact in the case of losing the card. So, if you lose your card, the card can be stopped quickly. Quite a few card companies will make the balance of cash available to you in the case of an emergency. ( Again, read the T’s and C’s )
Prepaid Travel Cards are CHIP & PIN secure, so they behave in the way that we are familiar with.
You must be a UK resident to apply for one of these cards.