A Guide to Using Prepaid Travel Cards While You’re Away

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Prepaid Travel Cards Explained: How to Save Money Abroad

One of the many considerations you’ll make before embarking on an overseas holiday is how you’re going to handle spending money. Simply carrying around a large amount of cash can be a problem, from both a security and convenience perspective. But an ordinary debit card might come with its own set of problems, including additional transaction and conversion fees.

The alternative is a prepaid travel card. This will often provide a winning blend of security and convenience. But exactly how do these devices work, and what are the specific advantages they confer?

How pre-paid travel cards work

A pre-paid travel card is simply a digital repository of a given foreign currency. You can make purchases with it, up to the amount that you originally put into it. As such, your spending will be capped until you decide to load more cash. They’re widely accepted because most of them run on Mastercard or Visa.

How to manage exchange rates and fees

When it comes to costs, it’s worth bearing in mind that not all prepaid cards are exactly the same. In some cases, you’ll be charged extra for inactivity, ATM use, or currency conversion. The latter can be a major concern if you intend to swap your foreign currency back into sterling when you get home.

Another issue stems from the exchange rate used by the card. This will either be the bare minimum ‘interbank rate’ or something a little higher. Check your options before committing.

How to be safe when using them

Just because you aren’t carrying cash doesn’t mean that your money can’t be stolen. Make sure that you’re aware of the protections you’re afforded, and that you set limits on what can be withdrawn on a given day. Monitor your bank balances regularly, but make sure that you do so via a secure connection.

If you must use the hotel's WiFi, make sure you use a reputable VPN service. A good VPN for iPhone, for example, is often very simple to install and use.

What to do if your card is lost or stolen

The major advantage of this form of payment is that you’ll be able to swiftly react in the event of a problem. The moment you notice your card is missing, notify the provider immediately and have it frozen. This will limit the amount of money that any would-be thief can take.