Prepaid currency cards are safe, simple to use and can save you money when you are abroad on holiday. Today we are going to cover what types of cards are available, how to use them and some top hints and tips on spending money abroad.
Hello and welcome to another episode of my travel money TV. Today, I am going to talking about prepaid currency cards, what benefits they have over traditional forms of spending money while on holiday and what scenarios prepaid currency cards are best suited for.
So the 3 traditional ways of spending money whilst you are abroad are cash, credit cards and travellers cheques. Now, although cash has the best exchange rates when ordered online, for security you may not want to carry large sums of cash abroad, as if stolen there is no guarantee that you will ever be reimbursed for the theft and definitely not during your overseas stay. Credit cards can be convenient but often incur hidden fees which users are unaware of until they get their credit bill. There is also no guarantee that when used abroad, fraudulent individuals don’t use your credit card details to their own ends.
Travellers cheques
Travellers cheques are still available but have seen less use in recent years as prepaid currency cards have become a more convenient replacement as you do not need to find some where to exchange travellers cheques.
Card Types
There are generally 3 different types of currency card. Euro, Dollar and Global. Some providers such as Travel FX supply other cards like Australian Dollar and South African Rand which would give better rates than the global currency card in those countries. One thing that you should avoid is using a prepaid currency card for a currency that it isn’t intended for as this would incur a second exchange rate. A Euro card is loaded with Euros and converted to Euros when it is loaded. If you then use the card in Australia, those Euros would then be converted to Australian Dollars and any exchange rates would be added again. If there is a possibility of this happening it is worth having a Euro card and a Global card as you can get the card for free with an initial load of £10. That way you are getting the best exchange rate whilst inside the Eurozone and still being able to use the global card if you ever have a day trip to a country using another denomination.
Exchange Rates
As mentioned, converting your money online rather than at an airport or high-street can give you the best exchange rates on your money but I would not recommend this for large volumes as security can be an issue. Other than that, prepaid currency cards have the next best exchange rate with all the benefits not supported by the cash alternative.
Charges
Now the charges can sometimes seem confusing with currency cards as the exchange rates are very competitive but some cards have hidden fees such as loading fees and purchase of the card. Now these don’t apply to all providers and some fees for the card are actually just a starting balance that are then loaded on to your card which you can then access. Most of the cards have an emptying fee of around £5 to move any unused money back into your bank account but this is still much better then if you came back with a load of cash that then needed converting at often extortionate rates. Some cards have an ATM fee and fees for using your card within the UK but others have minimal to no fees while using abroad. If I had to recommend a currency card I would recommend either CaxtonFX or FairFX. Trust me we are not conning you into using them; this is actually my second Caxton card and I was very happy with the service.
Benefits
So what are these benefits? Firstly the card uses chip and pin for security and is accepted in a growing number of ATM machines globally. I did have a small problem when in Israel that only newer ATMS would accept my card but all shops and retailers accepted the card. Even in a small souvenir shop in the middle of the desert and during a holiday 4 years ago to Japan I didn’t have a single problem. The card is not directly linked to your bank account so there is no risk of anyone accessing money you have not loaded onto the card.
Topping up the card
It’s simple to load the card. Most prepaid currency cards give you three options to load your card even while you’re abroad reloading at the shop which I have never had to do and reloading over the phone or on the internet which was my main choice as it took less then 2 minutes and I could easily view my balance. Something to think about if internet seems best for you and you know you will be reloading your card abroad, is that I would recommend taking your own device say phone or tablet to access Wi-Fi signals which are found everywhere around the globe. Now this way you know you are not leaving you details on someone else’s computer peace of mind for the over cautious. The card has no credit so there is no way to spend beyond your means; great for budgeting.
Expert tips
Well form personal experience I found my card very easy to use while not having to worry about security I would generally withdraw a considerable amount of cash from an ATM and use that over a prolonged period, purchasing more expensive items with the card. So when is it best to use a currency card over cash if you are a regular traveller to Europe or America? It is definitely more convenient to have a currency card over getting cash out for each trip and any funds left on the card can be used on your next visit. If you are going for a prolonged stay abroad when using cash isn’t really an option, prepaid cards are a perfect solution. I would also recommend the use of global prepaid cards if you are visiting multiple countries that use varying currencies, perfect for the explorer and gap year traveller. The last group I would recommend it to is the business traveller or business it is more effective to load a currency card with the daily budget multiplied by the days the individual is travelling. This way there is no opportunity for overspending and any balance left on the card can be used on the next trip to the same country.
So that’s prepaid currency cards. If you have any questions about them why not tweet them to us @MyTravelMoneyUK we would be happy to put your mind at ease.
Have an amazing journey and see you soon,
Written by Sofia Kluge on Google+
