Using a prepaid card overseas

Using a prepaid card overseas

Thinking of using a prepaid card overseas?

With prepaid cards, the concept is just like a PAYG phone card. Load it up with cash and off you go.

Once you’ve loaded cash onto your card it can be used just about anywhere to make purchases, just like your other flexible friends. Prepaid foreign currency cards have not been around for long, but they’re certainly worth thinking about when you’re weighing up your travel money options. However, with most providers you can load only Euros or American dollars onto a prepaid card.

Prepaid card advantages

Using a prepaid card overseas is very similar to using a debit card abroad in that they’re accepted just about anywhere as they’re issued either by Visa, MasterCard or Maestro. They’re secured with a PIN too. You’re protected if you lose it, or if it gets stolen, but bear in mind you’ll have to pay a replacement fee to get your cash back. You’ll be staying in the black with a prepaid card as it’s impossible to over spend, so depending on your outlook, this might be a disadvantage! Rest assured if you do need more than you budgeted for, prepaid cards can be topped up (sometimes a fee will apply) but you’ll probably need to go online to top it up using your debit card. When you buy your card the rate of exchange will be fixed, so if you suspect rates are going to fall you won’t lose out. As long as you’re using a card that’s been loaded with the same currency as what’s used in your holiday destination, you won’t be charged foreign exchange fees when using a prepaid card overseas.

Prepaid card disadvantages

The currencies available for most prepaid cards are Euros and American dollars, but Travelex’s ‘Cash Passport’ is also available in Australia dollars, Canada dollars, New Zealand dollars and South Africa rand. If you’re heading somewhere else you could load it up with British pounds, but you’ll have to pay transaction fees when you’re abroad, typically around 2.75%. You can’t go into the red with a prepaid card. Once you’ve used all the money on the card but find yourself needing more, you will have to top it up. The best prepaid card providers allow you to top it up online, via SMS, or by phoning the provider. Prepaid cards aren’t ideal for big purchases as they fall outside section 75 of the consumer credit act and you should be wary of the fees. Some providers will charge an application fee, or inactivity fees, so if you’re not going to use the card on a long term basis it might not be worth it. And remember, if you use your card at a cash machine abroad some providers will charge a fee of around £2.50.

Will a purchase in Rome for 120 Euros actually cost 120 Euros?

Currently, the best prepaid card is by CaxtonFX. It’s free to apply for one and it’s a Visa card so it can be used anywhere you see the Visa sign. It won’t cost you a penny to withdraw cash or make purchases, meaning a restaurant bill in Rome for 120 Euros will actually cost 120 Euros. You can load the card using your UK debit card either online, over the phone, or via SMS before you go on holiday and while you are overseas.

If you’re thinking of using a prepaid card overseas, check out this selection of prepaid cards below. All the cards listed don’t have application or monthly fees. Information as of August 2011. If you’re interested in finding out about other ways to spend abroad, check out our guides to using a debit card overseas and buying foreign currency online.

Have a happy holiday.

Prepaid card provider Foreign ATM fee Foreign purchase fee Top up options
Source: Money Supermarket
CaxtonFX (Euros/Dollars) NIL NIL Online, Phone, SMS
My Travel Cash* (Euros/Dollars) NIL NIL Online, Phone
Travelex Cash Passport** NIL NIL Online, Phone, Branch
Currencies Direct Euros Card €1.25 NIL Online, Phone
World First Prepaid Card (Euros/Dollars) €1.5/$2 NIL Online
Virgin Money Prepaid Card (Euros/Dollars) €1.5/$2 NIL Online
ICE Travellers Cashcard (Euros/Dollars) €3/$3 NIL Online

*An inactivity fee of £2 per month following 12 consecutive months of inactivity will be deducted from unused funds on cards and such fee will continue to apply to renewal cards.

**Available in American Dollars, Euros, Australia Dollar, Canada Dollar, New Zealand Dollas and South Africa Rand.

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