Prepaid cards abroad

Key takeaways

• These cards are preloaded with funds, allowing purchases in various currencies without overdraft risks

• They are easier to use than other travel money options and help with budgeting, as they don’t incur interest charges

• Single-currency cards are ideal for travel to one country or multiple countries with the same currency whereas, multi-currency cards are best for travel across countries with different currencies

• Be aware that although prepaid cards avoid interest charges and monthly payments they may have higher fees

What are prepaid cards?

In an era where convenience and financial security are paramount, prepaid cards have emerged as a modern-day essential for savvy travellers. These nifty little cards operate much like your standard credit or debit card but come with a twist: they're preloaded with funds. This means you can make purchases across a range of currencies without the fear of dipping into an overdraft. Once the balance runs low, simply top it up and continue enjoying your spending freedom.

Why are prepaid cards popular for overseas spending?

Prepaid cards are becoming more popular as they’re easier to use compared to other travel money alternatives, and you have more flexibility in your spending. There is no risk of accruing interest when spending beyond the agreed-upon limit, which makes them good for budgeting. They can help you budget your holiday spending and are particularly favoured for international travel, where their ease of use and budgeting benefits shine.

Unlike traditional credit cards, prepaid cards don't incur interest charges, offering a clear advantage for those looking to manage their travel expenses effectively. They're safer than cash to travel with as your money can be recovered if the card is lost, and you fix in the money exchange rate at the time of loading – not during purchase.

Choosing the right prepaid card for you

When it comes to prepaid cards, you have options. The single-currency prepaid card is your go-to if you're visiting one country or several that share the same currency. On the other hand, if your travels take you through multiple countries with different currencies, a multi-currency prepaid card is your best bet.

Advantages of using prepaid cards

Prepaid cards are not just about convenience; they come with a host of advantages:

• Budget-friendly: They are incredibly user-friendly and help you keep a tight leash on holiday expenses.

• No hidden fees: Say goodbye to foreign exchange fees for purchases made in the currency loaded on the card.

• No credit checks: Obtaining a prepaid card doesn't require a credit check, making it accessible for everyone.

• Widely accepted: Retailers around the globe accept them, and they're safer than carrying wads of cash.

• Fixed exchange rates: Lock in your exchange rate at the time of loading funds, avoiding any unpleasant surprises.

Are there any disadvantages to using prepaid cards?

Despite their benefits, prepaid cards may come with various fees, such as:

• Application fees ranging from £2 to £7.

• Monthly usage charges.

• Top-up fees.

• Transaction fees, which can be up to 3%.

• ATM withdrawal fees.

It's crucial to compare different cards as fees can vary significantly, with some offering no transaction or ATM withdrawal fees at all.

Who should opt for a prepaid card?

Prepaid cards are ideal for travellers on a budget who need to control and monitor their spending closely. They're also a good alternative for those who cannot get a credit card or are dealing with a negative credit score. Plus, they offer flexibility and security for travellers, ensuring that a lost card doesn't equate to lost funds. Travellers looking for flexibility will find that prepaid cards are easy to top-up and safer to travel with compared to cash.

Prepaid cards vs credit cards

Prepaid cards allow you to spend preloaded funds, steering clear of interest charges and monthly payments. Meanwhile, credit cards might offer better exchange rates and don't require the hassle of regular top-ups, adding convenience for some users. However, if you don't have a tight budget and can get approval for credit, a travel credit card might offer a more competitive deal than a prepaid card.

Compare prepaid cards

Make the most out of your travel money by getting the most competitive deals on prepaid cards with the MoneySuperMarket comparison tool. We’ll give you a way to compare monthly fees, transaction fees, and any benefits that are worth knowing about. Compare travel money with prepaid cards for the best offers. You can also compare exchange rates to find the best euro rate or any other foreign exchange rate that may be relevant to you. Head to our currency comparison and compare travel money today.