Holidaymakers switch from cash to prepaid cards: top picks
Prepaid cards allow you to load cash onto them. They can then be used in shops and restaurants like debit and credit cards.
According to data analytics firm Consumer Intelligence, 27% of people heading overseas this winter plan to use prepaid cards up from 23% last year.
Nearly three-quarters (74%) will still use some cash, the study found, but that is down from 76% last year.
The data also revealed a rise in the use of credit and debit cards for holiday spending, with prepaid cards nearly as popular as debit cards.
Consumer Intelligence said the advantages for holidaymakers using prepaid cards include potentially better exchange rates plus less risk for their money if they lose the cards. But customers need to watch out for fees.
Best option for travellers
Jon Ostler, CEO of finder.com, a comparison site, said prepaid cards have risen to prominence over the past few years and are generally the best option for travellers.
“They often have no withdrawal fees, and this, combined with very competitive exchange rates, means you will pay less than if you withdraw money the traditional way. If every Brit who went on holiday used prepaid currency cards, the annual fees we pay would be £552m instead of the £1.9bn we currently spend.
“Another benefit of prepaid cards is that you can track your spending and the fees you’re paying more easily. Some providers offer real-time notifications and holiday summaries, so you know exactly what you have been charged for. While fewer people currently use prepaid cards than cash while abroad, the savings and convenience that these cards offer should see their usage keep growing at a fast rate.”
Top pick prepaid cards
According to finder.com, here are the top five prepaid cards:
Allows you to spend in over 150 currencies, at the interbank exchange rate. Revolut also allows customers to buy overseas medical insurance from as little as £1 a day.
You can use this card anywhere in the world and withdraw up to £200 – both with no fees. Monzo gives you a handy report when you land back in the UK, telling you how much you spent while abroad.
This card is 90% cheaper than banks and bureaus, on average. You can use it in any country using their built in global currencies feature and it also comes with a free £10 for new users as long as you top up £50.
A top up card with 10 popular currencies. You can ‘lock in’ exchange rates in advance to avoid being affected by fluctuations.
There are zero fees and no ATM fees with this card. You get real time notifications so you know how much you’re spending and it beats all major banks and exchanges.