Prepaid travel cards can be used as payment for goods and services anywhere in the world. They typically offer better exchange rates than standard UK bank cards but still come with full chip-and-pin security and lower charges when used abroad.
See our guide to prepaid travel cards for more information.
To remain impartial these comparisons are ranked solely on the number of reviews each card issuer has received. You may want to compare several cards by clicking on them for full details before you decide which is best for you.
Prepaid Travel Cards (sometimes called "Multi-currency" or "Sterling" cards) are cheaper and have lower fees than a standard UK bank card when used overseas. Intended as a modern replacement to Travellers Cheques, these popular cards are more secure than paper money or cheques and can be used in all shops, restaurants and ATMs that accept MaterCard or VISA.
Just like standard UK bank cards, prepaid travel cards are made of a durable, high quality plastic that uses chip-and-pin security as standard, giving them the same level of protection as regular credit or debit cards. You cannot go overdrawn with prepaid travel cards as the balance is preloaded in advance onto your card and they are not linked to your bank account in any way - no credit checks are required to apply for one and there are no surprise bills or hidden charges when you return home. Topping up is easy; you can load more funds on to your card at any time by managing your account online or by phone and most cards are free to purchase (a minimum initial top-up of around £50 is usually required).
Prepaid travel cards are suitable for everyone from solo travellers to couples and large families. Some providers allow multiple cards to be liked to the same account and any unspent funds can be redeemed when you return from holiday. Prepaid travel cards lie somewhere between cash and credit / debit cards when it comes to cost-effectiveness. Here are a couple of typical usage examples so you can see how the costs compare:
* Based on data taken on 24/11/14. The cash equivalent was calculated using the AUD rate of 1.7955 offered by Travel FX. The cards we compared were: Moneycorp Explorer Card, Barclays Visa Debit and Barclays Visa Credit.
1) After applying for a card you'll be required to create an account on the card issuer's website. This is where you'll manage your card by logging into your account and topping up your balance whenever you need to. When applying for your card you'll need to deposit an initial small amount of funds into your account to activate it and you can do this by using your standard bank card or by Bank Transfer.
2) You should receive your prepaid card in the post within a couple of working days after submitting your application. Your card will contain a PIN number and activation instructions which typically involve logging into the account you created in step 1) and following a few instructions on the screen. You may also be able to activate your card by phone. Once your card is active it is ready to use anywhere in the world. You can change your PIN by taking it to any UK cash machine just like a regular bank card.
3) Your activated prepaid travel card can be used to pay for goods and services (or withdraw cash) anywhere in the world that accepts VISA or MasterCard, however you may be charged more if you use it in the UK as these cards are designed primarily for use overseas. Any time you make a purchase on the card overseas the amount will be converted into the local currency and deducted from your card balance which is stored in British Pounds. Once your balance reaches zero you cannot spend any more until you top it up again. There is no overdraft facility and the card is not linked to your bank account in any way so you cannot go overdrawn with it.
4) Reloading or topping up the card is easy; most cards have multiple top-up methods including online, by bank transfer, credit or debit card, by phone, SMS, Post Office and PayPoint. Note that not all top-up methods are free, for example topping up by SMS can incur a small charge so check the terms and conditions beforehand. All cards can be topped up by bank transfer or debit card for free.
5) Any unspent funds can be redeemed back into your bank account when you return home or left on the card for a later date. If you need any help or advice on how to use your card you can ring the 24-hour helpline provided by the card issuer or manage your account online at any time.
The real benefits of using a prepaid Travel card become apparent when you consider how the charges can add up if you use a regular bank card abroad.
To begin with there's the exchange rate. If you use use a UK credit or debit card overseas your bank will convert your British Pounds into the local currency each time you spend using their own daily exchange rate at the time you make the purchase. Banks are notorious for having some of the worst exchange rats on the high street because they don't have to be competitive, but worse than that most banks will also add on a transaction or 'point of sale' fee to each purchase as well which can be a fixed amount or a percentage of the total transaction value. These are fees you'll have to pay every time you use your card whilst abroad!
So what makes prepaid travel cards so special? Firstly most card providers offer much better exchange rates than UK banks (you can check their rates now in the table above) which means you'll be better off right from the start. Secondly, the best prepaid travel cards above offer no or low transaction fees when you use your card overseas. There's no catch! They can afford to be more competitive than the banks because their overheads are lower, and since they make their money in the exchange rate they offer you they don't charge extra usage fees. Be sure to check our prepaid travel card comparisons above for details on transaction fees and additional charges because some cards are better than others.
Prepaid travel cards are designed specifically to be used overseas and aim to provide the flexibility of cash with the security of a bank card - without the unnecessary and expensive usage fees. Here we've tried to summarise the pros and cons of using one:
Posted by Peter Rudin-Burgess on 6th January 2017
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