Skip navigation
  • /
  • Money /
  • Blogs /
  • Blog: Why prepaid cards are a holiday money winner

Blog: Why prepaid cards are a holiday money winner

Secure, practical and often cheaper than the alternatives: if you’re heading abroad this summer, a prepaid card might just make the perfect travel companion.

Holiday credit card

With summer almost here, many of us are busy finalising our holiday plans.

Alongside issues such as what to pack and which sights to see, how you take money abroad is an important consideration.

Many people stick with cash, debit cards and credit cards.

But increasing numbers of holidaymakers - myself included - are realising the benefits of prepaid cards.

What is a prepaid card?

A prepaid card is a payment card that you pre-load with money before you go away.

They look the same as credit and debit cards and have the same chip and PIN facilities.

However, unlike credit cards, there’s no credit facility so you can’t spend more than you load onto the card.

And, unlike debit cards, they’re not linked to your bank account.

What are the benefits?

There are several benefits to using a prepaid card over cash or a credit card, such as:

  • A prepaid card is safer than carrying lots of cash about with you.
  • You can limit your spending if you’re worried about going over budget.
  • You aren’t credit-checked before you apply so you’re guaranteed to be accepted if the provider can verify your identity.
  • They are usually cheaper to use abroad than debit cards, which often come with hefty foreign-usage fees.
  • Many cards give you the option of keeping track of your balance via text message or online.

Safer than carrying cash

I took a prepaid MasterCard for the first time on holiday to Italy last summer, and my partner and I ended up wondering why we had never taken one away before.

Before we left I topped up the card in sterling and we set ourselves a holiday budget.

Then when we went out for the day or had dinner in the evening, we used it in the same way we’d use our debit cards back at home.

We also kept a small amount of cash handy and used this to pay for smaller items such as drinks and ice creams – but having the card meant we didn’t have to carry a huge wad of notes about, which felt much safer.

How do you choose the right card?

Euros, passport and sunglassesWhen choosing a card the first thing to think about is your travel destination, as some cards can only be used in a certain currency area. Our card could only be used within the eurozone, for example.

The Post Office, a popular prepaid card provider, offers the choice of eight currencies including euros as well as US and Australian dollars.

Other prepaid cards are multi-currency, meaning you can load them up with sterling and spend on them in a variety of foreign currency zones.

The My Travel Cash card is an example of a multi-currency card.

From 1 July to 29 August has an exclusive offer whereby if a customer takes out the card and loads it with £600 they will get £5 credited to their card.

What are the drawbacks?

One of the main things to consider is charges, as prepaid cards usually come with fees in one form or another.

For example, the card we used on our Italian break would have charged us €2 each time we took out cash at an ATM.

Other common charges include application fees, monthly fees for use of the card, top-up fees, and transaction fees which take a percentage of price of any purchases.

Rachel Rawlings, personal finance expert at, says: "We’d recommend you compare different cards and look at the individual features, as well as the charges, before you take one out to make sure you’re getting the best deal for you.

"Despite the charges, prepaid cards can still be a lot cheaper than using your debit card abroad, which charge around £1.50 for every overseas transaction plus foreign-transaction fees of about 3%.

"And with travellers’ cheques on the decline, they have become a popular way for people to securely take money overseas."

Compare credit cards - you could find a great deal in minutes Compare credit cards


Adam Jolley

Adam Jolley

Adam Jolley is a content producer at He joined us in May 2012 from the world of financial services PR. Read more from Adam