Save, make, understand money

Credit Cards & Loans

The pros and cons of pre-paid cards

Lucinda Beeman
Written By:
Lucinda Beeman

If you’re seeking some last-minute sun a pre-paid currency card may be the perfect travel companion – but be wary of the downsides.

Bob Atkinson, travel expert at MoneySuperMarket, says: “Prepaid cards are the new travellers cheque, but far easier and more flexible to use.”

According to Vanessa Schotes of Moneycorp, pre-paid currency cards are also a great way to keep money secure.

She says: “When it comes to holiday planning, most of us are guilty of leaving things to the last minute. However, if you do a bit of pre-planning for your travel money, there are some great options available. Pre-paid cards, for example, are easy to use and can offer some of the best exchange rates.”

But nothing is perfect, so we’ve broken down their pros and cons.


Topping up a prepaid card online will often secure you a much better exchange rate than changing your money at the airport.

In addition, Schotes says: “Depending on how much you are exchanging, even a seemingly small difference in exchange rates can make a big difference when you convert currencies. With a currency card you can pre-load your card with currency when the exchange rate is most advantageous.”

Budgeting for a long trip – or even one where you’re unsure of how much basics like food and public transportation cost – can be difficult. Pre-paid cards, which can be reloaded but won’t allow you to spend more than you have, are a great solution. Some cards will even let you chop and change currencies as you go.

Schotes says: “We’ve all had that horrible moment of seeing the credit card bill after a holiday and realising that we’ve spent much more than planned. A pre-paid card can help you stick to what you had planned to spend, as well as keep your budget flexible and adaptable if your plans change along the way.”

Most of all, pre-paid cards are easy to use and reload.

Schotes explains: “To put it simply, a pre-paid currency card makes travel money easy. You can be confident that you are securing a great exchange rate, all the while spending with the same ease as using a bank card back home.”


According to Atkinson, not every pre-paid card is created equal. For example, some will charge for just about every transaction.

He explains: “Ensure you don’t end up with one of the bad examples of pre-paid cards on the market with charges every time you load the card, spend money on it and withdraw cash. The worst ones will also charge you an inactivity fee if you leave money on them at the end of your break and even a fee to close the card down to get your leftover cash back.”

Pre-paid cards can also be tricky for checking into hotels or renting hire cars because the amount of any deposit you put down is blocked on your card. That means you won’t have access to those funds for the duration of your stay.

Finding the card for you

FairFX, Caxton and Travelex all offer good deals, Atkinson says, but every card is different. Comparing cards online will help you find the best fit for your needs.