Are prepaid cards best for holiday spends?

If you're jetting off on holiday in the next few weeks, you might be wondering whether to take a wallet full of cash with you, or put most of your holiday spending on a debit or credit card.

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Carrying around lots of cash isn't the most secure option on holiday – and many debit and credit cards will charge you for using them overseas. One popular alternative is a prepaid card – read on to find out how they work…

What is a prepaid card?

Prepaid cards can be used in the same way as debit and credit cards, but must be topped up with funds in advance. You can then only spend what is on the card, or top it up again. Many prepaid cards allow you to load them up in different currencies – making them handy for overseas use.

Typically, you can pre-load these cards with sterling, euros or dollars (euro cards are for use in the Euro Zone, while dollar cards are for use in the US). Sterling cards can be used be anywhere in the world and your money will be exchanged from sterling into the local currency whenever you use your card – and at the prevailing exchange rate.

However, an increasing number of providers are now offering one card that can be loaded up in multiple currencies.

So are prepaid cards any good?

The advantages of prepaid cards

A big advantage to using a prepaid card is that it saves you having to carry around significant sums of money while you're on holiday. In the event your card was stolen, you'd only lose the amount of cash on your card.

But prepaid cards are also often cheaper to use overseas than a standard debit or credit card. Many debit or credit cards charge a foreign transaction fee of around 2.75% when you use them for spending abroad.

The same applies if you're withdrawing cash on your card. But, on top of that, you'll also pay a cash transaction charge of between 2% to 3% (minimum charge of £2 to £3). And, if you're using a credit card, you'll also be charged interest from the moment you withdraw your money.

In contrast, some prepaid cards allow you to avoid these fees altogether, while others will charge but at a lower rate.

Another advantage of prepaid cards is that you can load them up with funds when the exchange rate is good, which means you won't lose out if the exchange rate worsens while you're away. And because you can only spend what's on the card, this also helps you to stay within your holiday budget.

The problems with prepaid cards

But prepaid cards aren't perfect and are rarely completely fee-free. Some still charge foreign transaction fees and ATM withdrawal fees, while a number of cards also have an application fee or hit you with an 'inactivity' fee if you don't use your card for several months. So it’s important to check the small print.

And although you can top-up funds on your card online, by phone or by text, remember that if you need to do this on holiday, you could have to pay for internet access or for using your phone abroad. And, if you're staying somewhere rural or remote, getting internet access or phone reception could be a challenge.

Prepaid card options

To help you decide whether you think a prepaid card is right for you, we've highlighted some of the best options below, along with the fees you need to be aware of.


Cards on offer: The Everywhere card (in sterling), the Euro currency card and the Dollar currency card.

Offer: New customers applying for either a FairFX euro or US dollar card through MoneySuperMarket will receive £35 when loading £500 or more onto the card. This is added to the account as a voucher that needs to be redeemed.

If you apply for the Everywhere card through MoneySuperMarket, you'll receive £5 when loading £500 or more onto the card, or £26 when loading £1,000 or more. T&Cs apply.

Application fee: The usual £9.95 application fee is waived if you apply through MoneySuperMarket and load more than £50 onto the card.

Foreign transaction fees: None - providing you use the cards in the correct currency. However, this means there is a foreign transaction fee of 1.4% when you use the Everywhere card outside the UK (but this is still cheaper than most standard cards charge).

ATM withdrawals fees: €1.50 for the Euro card, $2 for the Dollar card and £1 for the Everywhere card.

Inactivity fee: None. But there is a £2/$3/€2.50 per month admin fee for expired cards with balances. To avoid paying this, renew your card before it expires (after three years).


Cards on offer: FX Currency card which can be loaded in a number of different currencies.

Offer: New customers applying through MoneySuperMarket receive £30 on loads over £500. Note that this offer is only valid for 30 days after registration and T&Cs apply. 

Application fee: None.

Foreign transaction fees: None - providing you use the card in the correct currency. If you don’t, you’ll be charged 2.49%. 

ATM withdrawal fees: None if you use the card overseas. In the UK you’ll be charged £1.50.

Inactivity fee: A £2 account management fee applies if there have been no transactions in the last 24 months.


Cards on offer: WeSwap works slightly differently as your travel money is swapped with travellers in other countries. Its prepaid Mastercard allows you to swap pounds into several currencies.

Offer: MoneySuperMarket customers get an extra £30 free travel money when they make a first load of £500 or more. T&Cs apply.

Application fee: None.

Currency swap fee: If you swap immediately you’ll be charged 2% of the swap amount. If you wait three days you’ll be charged 1.3% and if you wait seven days you’ll be charged 1%. The longer you leave your money in to swap, the less you’ll pay.

ATM withdrawal fees: None if the amount withdrawn is over £200. Otherwise you’ll be charged £1.50.

Inactivity fee: None.

You can compare a range of other options on our prepaid card channel.

The alternatives

Providing you're aware of the fees associated with prepaid cards, they can be a very useful way to spend abroad. But if you're not sure they are right for you, there are a handful of credit cards that won't charge you for using them overseas.

The Halifax Online Clarity credit card, for example, has no foreign exchange fees or cash withdrawal fees abroad. However, you will be charged interest at a rate of 19.95% pa (variable) if you don’t clear your balance each month and from the moment you withdraw your money.

You’ll also receive £20 cashback on your first purchase made within the first 90 days of your account opening. T&Cs apply. This offer ends on 29 August, 2019.

The card has a representative rate of 19.9% APR (variable)*.

Alternatively, the Santander Zero credit card has no foreign transaction fees on purchases or cash withdrawals abroad when made in the local currency. You’ll get interest-free purchases for one month, but after that you’ll be charged 18.9% pa (variable). This is the rate you’ll be charged on cash withdrawals too.

The card has a representative rate of 18.9% APR (variable)**.

*Representative example: If you spend £1,200 at a purchase interest rate of 19.95% p.a. (variable) your representative rate will be 19.9% APR (variable).

**Representative example: If you spend £1,200 at a purchase interest rate of 18.9% p.a. (variable) your representative rate will be 18.9% APR (variable).

All credit cards are subject to status and terms and conditions. Over 18s, UK residents only. Terms and conditions apply. See for further information.

MoneySuperMarket is a credit broker - this means we'll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a commission by the lenders - though the size of that payment doesn't affect how we show products to customers.

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