If you’re looking for a way to take money on holiday that’s safer than carrying cash, or you want to give children or grandchildren a bit of financial independence, a prepaid card could be worth considering.
As their name suggests, prepaid cards can be loaded with money, either pounds or other currencies, depending on where you plan to use them. You can then use them as you would any other debit or credit card, either to withdraw cash or make purchases. However, since you can only spend what you’ve paid onto the card, it’s impossible to go overdrawn.
Here’s our rundown of some of the prepaid travel card options, as well as those which are available to children or grandchildren.
Prepaid travel cards
Prepaid travel cards have three big advantages. Firstly, they’re a good option if you’re worried about fraud, as prepaid cards aren’t linked to your bank account.
Secondly, you can lock into an exchange rate before you travel, meaning you can load up the card at a good rate and not have to worry about fluctuations while you’re travelling.
Thirdly, they can help you budget because you can preload them up to certain limits. Once you’ve spent the money on the card, it’s gone until you top it up again. Additionally, one advantage they have over cash is that if you lose your card you can usually get it replaced for a relatively small fee (often around £10).
There are a number of prepaid travel cards to choose from, and the one that’s best for you will depend on where you’re going and how you plan to use it. For example, will it be your main source of spending money, or for emergencies only?
The main disadvantage of prepaid travel cards is that they don’t give you Section 75 protection like normal credit cards do, meaning the card company isn’t legally required to refund you if something goes wrong with a purchase. In addition, some outlets, such as car hire companies, may not accept prepaid cards as payment. You therefore shouldn’t rely on them as your only source of money while you’re abroad.
Here’s our rundown of some of the best known prepaid travel cards and what they offer, but there are plenty of others available, so always compare as many as possible so you end up with the best option to suit your needs. The following are correct as of the time of writing:
Revolut: Supports 29 currencies, and it costs £4.99 to get the card delivered. The first five cash withdrawals overseas each month are free up to £200. You will be charged 2% after this.
Wise: Supports 54 currencies for a £7 delivery fee. You get two free cash withdrawals overseas per month, again up to £200. You’ll be charged 1.75% plus 50p after this.
EasyFX: Supports 13 currencies. There’s no delivery fee, but you have to add at least £50 to get going. There’s no withdrawal fees either, except in the UK, where it costs £1.50. Beware that there is also a £2 fee if you don’t use it for 12 months.
Children’s prepaid debit cards to help them manage money
There are several different online apps and prepaid debit cards on the market, designed to help your child manage their money.
GoHenry: this service is free for the first 30 days and then charges £3.99 a month. You set up your own account and link it to an account for your child or grandchild.
Features: You can transfer ‘pocket money’ regularly from your GoHenry account to your child’s and he or she can spend this money on their debit card. They can’t go overdrawn on it. Your child can receive extra money for completing certain tasks and can set spending goals. The account comes with a prepaid Visa card which your child can use in shops or online according to the rules you’ve set (for example, limiting them to high street only, online only or barring them from cash machine withdrawals). You can block or unblock the card and you can see their spending in real time.
You get one load per calendar month included in the membership fee, but there’s a 50p fee for every extra top-up within the same period. If the card gets lost or stolen, GoHenry will replace it for free.
It’s free to use the card abroad, but some ATMs may charge to make withdrawals.
Osper: Osper works in a similar way to GoHenry in that children are given a prepaid debit card (in this case a MasterCard, not Visa). You can set up a regular amount to be transferred to your child’s card. The first 30 days are free and after that it costs £2.50 a month.
Features: Instant loads cost 50p and friends and family can load the card too for 5p each time. You get a text message every time the allowance has been transferred to your child. Your child can see when their allowance has been loaded onto their card and when the next allowance is due.
It costs 3% to use the card abroad in a shop and £2 to take out money at a cash machine abroad. You can lock the card if it’s lost, but there’s a £4 charge to get a new Osper card.
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