Prepaid travel cards

You don’t want your bank card to get in the way of spending while abroad, which is where a prepaid travel card could come in handy. Plus, if you play your (literal) cards right, there could be some savings to be made.

This guide will take you through the benefits of prepaid travel cards and help you compare some of the best options currently available. Here we focus on prepaid cards, but we have a separate guide on debit cards with low or no overseas transaction fees that are linked directly to your current account.

Latest reviews of prepaid cards you can use abroad

What is a prepaid travel card?

A prepaid travel card works like a debit card which you use to spend or withdraw cash while abroad. Many prepaid cards don’t charge foreign transaction fees which can make them a cost-effective option while travelling.

Alongside the card, you often get an online account to load money and swap pounds sterling for other currencies. The exchange rate is either set by the payment provider – such as Visa or Mastercard – or some providers use the “interbank” rate (which is what the banks pay when they trade currencies).

The different types of prepaid travel cards

There are 2 main types: a simple prepaid card or a multi-currency one.

The simpler type doesn’t let you exchange currency in advance. Instead, you simply load pounds sterling onto the card and when you spend, it converts the pounds into the currency using the exchange rate at the time. This makes the account very similar to a debit card.

Meanwhile, multi-currency cards have the added bonus of letting you lock in an exchange rate before you travel, while also holding multiple currencies within your account at once

How do they work?

Once the account is open, you’re sent a physical card to use in the same way you would a debit card. Most providers have a website and app to load money on the go.

For some banks, you have to load money in pounds sterling first before you’re able to swap for another currency. If you can exchange in advance, each currency is held in a virtual wallet within the account. It sometimes can be worth exchanging in advance to secure a competitive rate on your chosen currency. However, keep in mind that currency values fluctuate, so it may not always work in your favour.

When you spend using a prepaid card, money is automatically deducted from the wallet containing the currency you’re spending in. The good news is that you can’t spend more than what’s in the account. Which could help you budget while abroad.

Are there cards that under 18s can use abroad?

There are several prepaid debit cards designed for young people. These look to give parents some degree of control over their kids’ money and some don’t charge foreign transaction fees.

Here are a few to consider:

• GoHenry. A prepaid debit card for 6-18 year olds, GoHenry doesn’t charge commission or cash withdrawal fees when your child pays/withdraws money in the local currency. However, it does have a monthly fee.
• Revolut .18> A card for 6-17 year olds, the currency conversion is similar to the adult version of the account, except kids can’t hold foreign currency in their own account. If you have an adult Revolut account, depending on which plan you are on, you’ll have access to a set number linked Revolut
• Starling Kite. Designed for 6-15 year olds (Starling has its own teen account), Starling Kite doesn’t charge fees for foreign transactions or cash withdrawals and is also free.
• Nationwide FlexOne. A free account for 11-17 year olds, this account allows your child to have a debit card or a cash card. Additionally, the account has no fees for using the card abroad or for withdrawing cash outside the UK.

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What are the benefits of using a travel card?

• Safer than carrying cash. This is the main advantage of a travel card. You don’t have to worry about losing loads of money, or getting pick pocketed on the beach.
• Save on fees. Unlike many regular bank cards, you might be able to save on foreign transaction fees when you spend while abroad.
• Works like a debit card. Unlike a credit card, you won’t be able to run up debts on a prepaid travel card. There are however a range of credit cards designed for travellers with benefits attached.
• Choice of currencies. Most travel card providers offer a range of currencies for you travel card. We have a separate guide on accounts where you can hold multiple currencies.
• Good for budgeting. One of the best things about a travel card is that once it’s loaded it is loaded. You can’t run up debts, and it helps you to keep on top of how much you’re spending.
• Good to give to youngsters going on their first holiday. For the same reason, travel cards are good to give to first time holidayers. It’s a good way to teach kids how to spend responsibly, but without much risk. We have a separate guide on prepaid cards for children under 18 that can be used abroad.
• Better rates than banks. Most prepaid card companies offer a more competitive rate than banks, and certainly better than a Bureau de Change in airports or in foreign countries.

What should I look out for when comparing travel cards?

• Topping up. Most prepaid card companies allow you to do this while you’re abroad, but make sure you check out how to do it. There’s nothing worse than being out of money while on holiday, and being forced to withdraw money at a terrible rate. A lot of companies have apps, or will let you top up over text. Also, be sure to check how much this might cost you.
• Fees. This is where travel card companies make a lot of their money so make sure you wrap your head around all the costs before you sign up.
• Rates. Similar to fees, you should also keep on eye on exchange rates and make sure you’re getting a fair deal. Many travel card companies will match a better exchange rate from a rival company so this is something to be aware of.
• Protection. This might go without saying, but it’s important for you to be aware of where you stand if things go wrong. Check the company’s policies regarding lost, stolen, or undelivered cards.

What’s the alternative to using a travel card?

It could be worth looking at some of the challenger banks, many of which don’t charge foreign transaction fees. They also tend to have slick banking apps so you can also manage the whole process on your phone, saving you a visit to your local bank branch or post office. Apps like Starling, Chase and Revolut have favourable fees when spending abroad.

Pros and cons of a prepaid travel card

Frequently asked questions

• At what point is currency exchanged with prepaid cards?

  It depends on the type of card. If it’s a simple prepaid card that doesn’t let you swap pounds sterling before you travel, the currency is exchanged at the point you spend money or withdraw cash. Meanwhile, multi-currency cards use the exchange rate at the point you swap your pounds sterling. By buying currency before you travel, you can lock-in an exchange rate at a time of your choosing.

• Is it worth getting a prepaid travel card?

  If your usual bank account charges foreign transaction fees, a prepaid travel card could save you money, especially if you travel a lot. One of the main perks of some prepaid currency cards is you can lock in an exchange rate before you go away. But if you aren’t bothered about that, you might want to look at travel debit or credit cards that don’t charge non-sterling transaction fees.

• What is the difference between a prepaid travel card and a travel debit card?

  They are very similar; both will let you spend using either contactless or chip and pin without charging foreign transaction fees. The main difference is that many prepaid currency cards let you exchange and hold onto currency before you travel, whereas debit cards don’t.

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