MoneyMagpie

Sep 08

Why a prepaid card is essential for your travels

Whether you are going on a gap year, a holiday or a Christmas vacation, a prepaid card is a great way to avoid unwanted charges, budget your money and keep yourself safe.

 What is a prepaid travel card?

A pre-paid travel card is much like a regular debit or credit card. It can be used to make purchases and to withdraw money from an ATM. The difference, however, is you have to preload a prepaid card like you do with mobile phones. You will only be able to spend the amount of money you put on your card, after that you will have to top it up.

 What are the advantages of a prepaid travel card?

You’ll avoid extra charges

The biggest advantage of a prepaid travel card is that they can save an awful lot of money. Many people don’t realise the many costs they can incur by using their debit card abroad.

Most debit cards charge a withdrawal fee, as well as a conversion and transaction fee. The conversion charge is usually a percentage of the transaction value, and the transaction fee can either be a flat fee or a percentage charge. 39% of people who have used their debit card abroad have admitted to not checking the charges.

Credit cards have a similar problem with loading fees, spending fees and cash machine charges. In the case of cash withdrawal, you’ll usually pay at least 2.5% and you’ll start paying interest on the cash you take out as soon as it’s in your hand (and remember, the interest rate for cash withdrawals is often a lot higher than your normal APR.)

These charges are the reason we are so keen on prepaid cards. Many prepaid cards offer at least one benefit such as no transaction charges, free cash withdrawals from an ATM or free top ups when using a debit card. One card however, the Ukash Travel Money Prepaid MasterCard, offers all these benefits and also has the added extra of no running costs.

You’ll be able to budget

Whether you’re on your gap year, having a city break or on your summer vacation, it is easy to get lost in the moment, throw caution to the wind and spend more than you had originally intended.

With a prepaid card you’ll only be able to spend the amount that is on your card. Once it’s gone you can’t spend unless you top it up. This is a great way to help you think before you spend money you probably can’t afford. It’s particularly great for those on gap years, allowing you to give yourself a budget each month that you know you can’t go over.

You’ll be safer

When you’re in a new place you are always more vulnerable to pickpockets and fraudsters. Carrying a prepaid card around is a lot safer than carrying around cash.

If cash is stolen then it’s gone, whereas prepaid cards have a minimum level of insurance and will have a chip and pin system to protect your balance. If the worst happens and your card is stolen then you can put a stop on the card so it can’t be used and your card can easily be replaced.

Equally a large proportion of credit card fraud happens abroad. If someone gets your debit or credit card details they can empty your account or rack up huge bills in your name. If they get hold of your prepaid card, the worst they can do is use the remaining balance on the card.

 Finding the best prepaid card for you

When choosing a prepaid card for your travels you need to look at the charges and then look at the exchange rate they are offering.

A great prepaid card currently available is the Ukash Travel Money Prepaid MasterCard. It has the lowest FX rate on the market, has no transaction fees, allows free ATM withdrawals in Europe and the US, and has chip and pin security.

You can load the card with as little as £50 and it can be used at over 34 million outlets worldwide that accept MasterCard. The card is free with no monthly or annual fees. Click here to find out more about the Ukash card.

To find out more, read our comprehensive article on prepaid cards, and for more on saving abroad read our article on getting the cheapest foreign currency for your holiday.

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