What is a prepaid travel card?

If you’re heading off on a trip abroad and want to avoid carrying too much cash with you, then taking a prepaid travel card could be just the ticket.

Kim Jones
Kim Jones
Updated 21 March 2022  | 3 mins read

What is a prepaid travel card?

Sometimes called a prepaid currency card or travel money card, it’s a card you preload with money to take away with you on holiday. You can withdraw cash at ATMs abroad or use the card to purchase goods and services, just as you would a debit card.

You can either preload cards with:

  • Your choice of currency - like euros or dollars, at a set exchange rate
  • Sterling (British pounds), which will be converted into the currency of the country you’re spending in at the exchange rate on the day

Cards are usually underwritten by Visa or Mastercard and can be used anywhere they’re accepted - that’s more than 35 million locations around the world.

And you can reload your card should your funds run out.

Many cards are linked to an app where you can check your balance, top up with funds and review your transaction history.

Key points

  • Prepaid cards are a safe and secure alternative to carrying cash abroad
  • Use them just as you would a debit card in millions of locations worldwide
  • Preload cards with your choice of currencies at a set exchange rate
  • Or preload with sterling which is converted to the currency you’re spending in at the exchange rate of the day

Who can get a prepaid travel card?

As no credit checks are required, prepaid cards are available to everyone, even people who can’t get credit or debit cards because of a poor credit history.

They’re also an option for people who have no credit history. This might be the case for people who have just moved to the UK, or younger people who haven’t built up a credit history yet.

What are the different types of prepaid travel cards?

Single-currency cards

This type of card stores just one currency - like Euros or US dollars. You load up pounds sterling which is then converted into the currency at the exchange rate on the day you load the card

Multi-currency cards

These allow you to load several major currencies onto one card, useful if you’re travelling to more than one country on your trip

Sterling pre-paid cards

Load the card with pounds sterling which is converted into local currency when you make a purchase and at the current exchange rate. This offers flexibility if you’re going to travel through different countries

What does a prepaid travel card cost?

It’s worth comparing what fees and rates different cards charge, to determine the best deals.

Common charges to check for include:

  • Sign-up/application fees - A one-off charge to open a card account
  • Transaction fees - You may be charged a fee every time you withdraw cash from an ATM machine. Some cards also charge you for making purchases
  • Topping up your card using a credit card - Use a debit card to do this instead as you won’t be charged
  • Currency service charge - A fee for using the card for a transaction in a currency that’s not included on your card
  • Inactivity fee - If you don’t use the card in a 12-month period, you may be charged, often about £2 a month
  • Monthly or annual fee - Some cards may even charge a monthly or annual fee just to have the card
  • Refund fee – A charge to get unused money back from your card to your bank account. To avoid this, try to avoid overloading the card with more money than you’ll spend

What exchange rate will I get on a prepaid currency travel card?

The particular exchange rate you get will depend on the provider - so it’s worth comparing.

It could be the ‘interbank rate’ which is the rate banks use when swapping currencies and tends to be the most competitive on the market. Or it could be Visa or Mastercard’s own exchange rates.

You’ll usually also get charged a commission by the provider on top of that.

If you secure a good rate of exchange at the time of loading your card, your holiday budget could go a lot further. And if the pound drops even more by time you’re abroad, you’ll be better off again. (Though of course, if the pound rises in value after you load the card, then you’ll lose out.)

What are the advantages of prepaid travel cards?

  • Safety. It’s better than carrying around large amounts of cash. If you lose your card, or if it’s stolen, you can have it blocked and get unused funds transferred to a new card
  • Helps avoid overspending. You can’t go overdrawn with a prepaid card. It can help you stick to a planned budget
  • Good exchange rates. If you lock in a good exchange rate at the time of loading, your money can go further
  • Widely accepted. You can use it in millions of places worldwide

Are there any disadvantages to prepaid travel cards?

  • Fees and charges. Prepaid cards can come with lots of fees which vary from card to card, so be sure to read the terms and conditions carefully before you choose. Some cards even charge a monthly fee, and fees for every transaction, which can soon mount up
  • It can’t be used in certain circumstances. Places that require a security deposit - such as car hire firms or hotel bookings - don’t usually accept prepaid cards. They may also not be accepted at some petrol stations
  • Less protection. Under section 75 of the Consumer Credit Act, all credit card purchases on items over £100 (and under £30,000) are protected. Prepaid cards don’t offer this same level of protection

What are the alternatives?

Specialist travel credit and debit cards are likely to offer competitive rates of exchange and won’t come with the big fees that many standard credit cards charge for using them abroad.

Using a specialist travel credit card abroad will also mean you’re covered by section 75 of the Consumer Credit Act.

You’ll also have the cushion of being able to access emergency funds if necessary.

Alternatively, app-only banks like Monzo and Starling let you spend and withdraw money abroad at no extra cost. Check for their full terms and conditions.

Can you top up your card while you’re away?

Yes, you can load your card with extra funds - usually either by phone, text, online or via an app.

What currencies can my card hold?

It depends on the card. Some can hold up to 15 currencies - others up to 23 or more.

Most currencies in the world can be loaded onto a prepaid card. Of course, you’ll need to check that the card you’re looking at has the currency you need available.

Can I use my card in the UK?

If your card is loaded with pounds sterling, then you can use up anything left on your card when you return to the UK.

If you have foreign currency remaining on a prepaid single or multi-currency card, there’ll usually be a fee to get the funds transferred back to your bank account.