The cost of holiday spending money and the solution – pre-paid travel money cards


The cost of holiday spending money and the solution – pre-paid travel money cards

When you’re off on your hols, the last thing you want to think about is how much you’ll be charged to get at your own money. But, it is something you need to consider. Why? Because, if you’re not careful, accessing your cash could end up costing you a small fortune in fees.

The problem

If you use your debit or credit card overseas, to take money out of the ATM or to make purchases, you will normally be charged a fee. How much this is will depend on your card provider. To give you an idea of what you could end up paying, a quick check of the major credit cards available in the UK, shows that for withdrawing cash from an overseas ATM with a credit card will typically attract a charge of between 2%-5%, or a minimum amount of between £2-£5.

And if you flex your plastic in the shops in your exotic destination, or treat yourself to a fancy dinner at a local seafood restaurant, most providers will charge you between 2-2.99% of your transaction amount. There are some cards that charge nothing, but these are few and far between.  

It’s not much different for debit cards, with most cards attracting a fee of between 1.9-2.99% for foreign spending on the card. And the typical charges for taking money from overseas ATM vary from £1.50 per withdrawal, up to 2% of the total amount you’ve taken out – with minimum and maximum’s amounts applicable too.

The Solution

So, what can you do to avoid these charges? After all, your holiday spending money is supposed to be for spending on the things you want to treat yourself with, not on charges. Well, you’ll be happy to hear that there is a solution – pre-paid travel money cards. These are pre-paid cards, which means you simply load the card up with the currency of your choice – pounds, dollars or euros – before you go and then use it like you would your debit or credit card once you’re on your hols. Once the amount you’ve loaded runs out, the card stops working until you can load it with more cash.  And the best things about them is – many of them make no charge for either cash withdrawals or purchases! But, no charge is not the only advantage of a travel money card. Read on to find out more.

Low fee and no fee

One of the major advantages of a pre-paid travel money card is that there are usually no fees to pay on foreign transactions. Of course, there are always exceptions to the rule, so it’s worth making sure. For example, a cursory look at the some of the major pre-paid travel money cards in the UK reveals there are some who apply transaction charges, which range from 1.4 – 3%, but from a list of 20 cards, only three have these charges.

When it comes to charging for withdrawals from ATMs the rules are slightly different. Some cards charge nothing, but most do charge a small fee. However, this is much lower than your debit or credit card would charge. From the list of 20, nine charge a fee for withdrawing money from the cash machine. Some charge a per withdrawal fee, which can be as low as £1, others charge a percentage of the amount you’re withdrawing, which is 2.5% for the only card that does this on the list.

There are also some other fees to be aware of when you’re choosing which card to apply for. Some charge a fee for applying for the card and others charge a monthly fee too, but again, these appear to be the exception, rather than the rule.  

There might also be load charges. As well as allowing you to check your balance online, most cards also allow you to add extra funds to your card too – this is called loading and it’s something else that may be charged for. Again, it’s the exception, rather than the rule, with only one card out of the 20 charging a fee for loading with a debit card, but it’s still something you need to consider.

Other charges to be aware of…

Other charges you’ll have to keep in mind are inactivity fees and redemption fees. Inactivity fees are just that, if you’ve not used your card for 12 months, for example, some cards will charge you a £2 monthly fee to keep the account open. And, if you’ve not used up all the money on the card, and you want to get it back once you get home, you’ll probably be charged for that too. So, the best way to avoid these charges is to make sure you leave the card with a zero balance and, if you’re not planning on travelling overseas again soon, close the card.

Accepted almost everywhere

Travel money cards can be used in almost all the same places as your regular credit or debit card. However, there is one notable exception to this rule – self-service petrol stations. Other than that, your card should be accepted in bars, cafes, shops, at attractions and in restaurants.


This is one of the major advantages of a travel money card. Unlike cash, if you misplace your card or it’s stolen, all is not lost. All you need to do is report it to your provider and they’ll block it and send another one to you. Some providers will transfer any balances across for free, others however will charge you a fee, so keep the card, and your pin, as safe as you would any other. Most providers give you two cards, which is always handy, and if you require it, others will make emergency cash available, if you’re left with nothing.

The other great thing about these cards is that they are not linked to your bank or credit card accounts. So, if your card were to be stolen or found by an unscrupulous fraudster, they would not be able to access anything other than what you’d loaded onto that card, which is always a relief.  

Better exchange rates

Most pre-paid travel money cards will give you a much better exchange rate than at the airport or the bureau de change, with differences being as much as 8%, according to this report. And if you are a frequent traveller, it’s possible for you to take advantage of good exchange rates, by loading your card up when rates are favourable to spend later on.

Other things to be aware of…

Be Organised

It’s easy to apply for a travel money card – there are no credit checks and all you really need is a UK address and bank account. But, it’s not like popping into your local bureau de change with physical money and exchanging there and then. Applying for a card can take a little while. Once the application has been completed, you’ll usually have to wait up to 7 days for the cards to arrive in the post, so bear this in mind when planning your trip.

Not covered by Section 75

Unlike credit cards, pre-paid travel money cards offer no protection under Section 75 of the Consumer Credit Act. This is the clause that provide you with protection, and allows you to claim your money back, when you spend over £100 on your credit card, if something goes awry. So if you’re thinking of making a large purchase of over £100, it may be worth you paying the charges and getting the Section 75 cover. 

All in all, travel cards are a good option and, as time goes on, we’re sure more and more people will use them. Why not try one next time you go on holiday, we’re sure you won’t be disappointed.