A travel essential – prepaid plastic

With the global world of banking there are cash machines everywhere and needing to go to the Bureau de Change to pick up currency or traveler’s cheques is becoming necessary for only a small number of destinations.

More and more holidaymakers are using their plastic abroad and then counting the cost when they get home, and it’s not just the cost of your purchases that you will see on your bank statement.

Banks and card companies charge for using debit and credit cards at cash machines and in shops and restaurants, often raising the exchange rate by 2.5 to 3% for purchases, and when you use the cash machine there is likely to be a service fee as well.

Another recent development is that some sneaky foreign retailers will offer to bill you in sterling rather than the local currency, charging at their own inflated conversion rate, often 2 or 3% higher than those charged by your card provider. So insist on paying in the local currency, it will be cheaper.

An alternative is to use a prepaid card. They look exactly like a Visa, or MasterCard, work in exactly the same way, are available in sterling, euros or dollars, and the latter are perfect for travelling.

Even better you can load the card with as much cash as you want, so you can easily budget and there won’t be a nasty surprise when you get home.

There are a growing number of these cards available to the financially canny traveler, and are easily topped up over the phone or online.

Charges for prepaid cards vary, with some providers charging an annual fee or monthly fee, whilst others charge a foreign exchange fee, and there is often a minimum amount that you can load at any one time.

However, most do not charge for purchases and they can also be used in cash machines, though usually there is a small fee for this.

Another advantage is as the card is prepaid, there is a limit to the amount that can be lost or stolen and the risk of ID theft is minimised, as it’s not linked to personal bank accounts.

As with all financial products, compare the features and benefits of all the pre-pay cards to find the card which best suits you.

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