Prepaid currency cards: The new way to spend your cash abroad
Prepaid currency cards are safe, simple to use and can save you money when you are abroad on holiday, says Donald Strachan.
By Donald Strachan
Published: 9:38AM GMT 25 Jan 2010
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Prepaid currency cards combine the budgeting advantage of travellers' cheques with the flexibility and security of a credit card
Do you want a 10 per cent discount on your next weekend away, no strings attached? With planning and basic web-savvy, that's how much you could save if you currently buy your spending money in high street or airport bureaux de change. Even habitual credit and debit-card travellers could secure savings of about five per cent
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In recent months, the popularity of prepaid foreign currency cards has increased. This new breed of plastic combines the budgeting advantage of travellers' cheques with the flexibility and security of a credit card.
Getting hold of one is easy for anyone with a UK bank account. Apply online, choose the currency in which you'd like your card denominated (euros, dollars), load it with funds from your current account and wait for it to drop through the letterbox (typically less than two weeks later).
Though the cards work exactly like a debit card, your pot of money remains separate from your current account, and so is safer to manage from an overseas internet connection. It's free for you (or someone else) to top up. Charges are easy to understand or non-existent. Compare this with the various "loading", transaction and cash withdrawal fees when you use most UK plastic overseas.
According to Peter Ralph, head of operations at MyTravelCash: "The popularity of prepaid currency cards has risen as trust in banks has tumbled." The company has seen applications double every month since the website started eight months ago. When I checked rates last week, a MyTravelCash prepaid MasterCard (0845 867 6496; www.mytravelcash.com) loaded with €500 cost £457.41. A FairFX Currency Card www.fairfx.com)," target="_blank" rel="nofollow">(www.fairfx.com), also MasterCard, costs a little less at £451.47. Travelex's Cash Passport Visa (0800 015 0401; www.cashpassport.com) costs £460.87 for €500, and its uptake has increased rapidly since it introduced extra denominations in South African rand and Australian, NZ and Canadian dollars.
Check the charges, however. Although it's free to use any of these cards to make purchases, ATM cash withdrawal fees differ: a flat €1.25/$1.50 per withdrawal with MyTravelCash, €1.50/$2 with FairFX, but zero with a Cash Passport. There's also a hidden plus for anyone flying with Ryanair. Currently, a prepaid MasterCard is the only plastic that doesn't incur a booking fee.
If you prefer to carry cash, online bureaus offer rates closer to the interbank "wholesale" rate than customers can access on the high street or airport – and better rates than the prepaid cards. Remember, though, most travel insurance policies only reimburse a limited amount of lost or stolen cash. You'll also get a replacement card quicker than an insurance claim for lost currency ("within 24 hours", according to Travelex).
Easy-to-use online exchange services include TMS (www.travelmoneyservices.co.uk), ICE (www.iceplc.com) and Best Foreign Exchange (www.bestforeignexchange.com). Ideally you should consult www.travelmoneymax.com before ordering to see which offers the best rate on the day, and to check whether any have branches conveniently located to avoid paying (typically £5) for secure delivery to your home or workplace.
Prepaid currency cards are safe, simple to use and can save you money when you are abroad on holiday, says Donald Strachan.
By Donald Strachan
Published: 9:38AM GMT 25 Jan 2010
Comments 1 | Comment on this article
Prepaid currency cards combine the budgeting advantage of travellers' cheques with the flexibility and security of a credit card Do you want a 10 per cent discount on your next weekend away, no strings attached? With planning and basic web-savvy, that's how much you could save if you currently buy your spending money in high street or airport bureaux de change. Even habitual credit and debit-card travellers could secure savings of about five per cent
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In recent months, the popularity of prepaid foreign currency cards has increased. This new breed of plastic combines the budgeting advantage of travellers' cheques with the flexibility and security of a credit card.
Getting hold of one is easy for anyone with a UK bank account. Apply online, choose the currency in which you'd like your card denominated (euros, dollars), load it with funds from your current account and wait for it to drop through the letterbox (typically less than two weeks later).
Though the cards work exactly like a debit card, your pot of money remains separate from your current account, and so is safer to manage from an overseas internet connection. It's free for you (or someone else) to top up. Charges are easy to understand or non-existent. Compare this with the various "loading", transaction and cash withdrawal fees when you use most UK plastic overseas.
According to Peter Ralph, head of operations at MyTravelCash: "The popularity of prepaid currency cards has risen as trust in banks has tumbled." The company has seen applications double every month since the website started eight months ago. When I checked rates last week, a MyTravelCash prepaid MasterCard (0845 867 6496; www.mytravelcash.com) loaded with €500 cost £457.41. A FairFX Currency Card www.fairfx.com)," target="_blank" rel="nofollow">(www.fairfx.com), also MasterCard, costs a little less at £451.47. Travelex's Cash Passport Visa (0800 015 0401; www.cashpassport.com) costs £460.87 for €500, and its uptake has increased rapidly since it introduced extra denominations in South African rand and Australian, NZ and Canadian dollars.
Check the charges, however. Although it's free to use any of these cards to make purchases, ATM cash withdrawal fees differ: a flat €1.25/$1.50 per withdrawal with MyTravelCash, €1.50/$2 with FairFX, but zero with a Cash Passport. There's also a hidden plus for anyone flying with Ryanair. Currently, a prepaid MasterCard is the only plastic that doesn't incur a booking fee.
If you prefer to carry cash, online bureaus offer rates closer to the interbank "wholesale" rate than customers can access on the high street or airport – and better rates than the prepaid cards. Remember, though, most travel insurance policies only reimburse a limited amount of lost or stolen cash. You'll also get a replacement card quicker than an insurance claim for lost currency ("within 24 hours", according to Travelex).
Easy-to-use online exchange services include TMS (www.travelmoneyservices.co.uk), ICE (www.iceplc.com) and Best Foreign Exchange (www.bestforeignexchange.com). Ideally you should consult www.travelmoneymax.com before ordering to see which offers the best rate on the day, and to check whether any have branches conveniently located to avoid paying (typically £5) for secure delivery to your home or workplace.