What are prepaid credit cards?
A pre-paid credit card operates like any normal credit card – you can use it where-ever you use a normal credit card, however, the amount you can spend is limited by the balance that you load onto the card in advance.
What’s the difference with normal credit cards?
These cards a great alternative to standard bank credit cards where there are typically loading fees (i.e. a 3% charge on top just to use the card to pay for something, before exchange rates), poor currency exchange rates, cash withdrawal fees and also the risk of misuse if it gets stolen. They also provide a much better alternative to carrying large sums of currency around with you, as long as credit cards are accepted where you are!
Less risk in the worst case scenario
If your prepaid card is stolen then you can order a replacement for a small fee and the funds will be intact. In the worst case scenario if your card is stolen and used by the thief then the most you could lose is the balance you have added in advance.
Ease of use when topping up
Adding more funds to the card is simple: either by phone or by the card operator’s website. Some cards allow a BACS transfer directly onto the card. Therefore, walking around a foreign city with a card charged up with $140 will leave you safely able to pay for dinner or the big attraction, but without the worry – you can top it up back at the hotel ready for the next day!
Recommended Prepaid Cards
CAXTONfx – find out more here
The CAXTONfx debit card can be applied for online, there is no application fee and can be yours ready to use after a week or so. It can be used anywhere that accepts Visa. CAXTONfx offer three variations: the global traveler card, the Euro card and the Dollar card.
The Euro and Dollar cards are for when traveling to Europe or the United States respectively, and are therefore paying for goods and services in those currencies. There is no currency exchange made at the point of sale or transaction processing – you buy the currency upfront at the exchange rate on the day you purchase the funds and then are tied to that rate for all your purchases. This could work out advantageous….or not so good, depending on how the rates change. Following the rates carefully and planning in advance could give you the opportunity to make your travel even better value.
CAXTONfx Euro / Dollar travel card
Please note, as these cards are designed for use specifically in EUR and Dollar countries, use in other countries will incur fees different to the above
The global travel card is for use outside of Euro and Dollar countries (although you can use it anywhere), and like the Euro and Dollar cards offers no ATM charges for cash withdrawals when overseas. One key difference is the funds on the card stay in sterling at all times, and then a conversion is made from the currency at a competitive exchange rate determined by CAXTONfx. They also add a 2.5% of the transaction amount charge, which is still lower than a typical credit card will add as a load fee.
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