Prepaid Cards vs Debit vs Credit: Which is best for your trip abroad?
Why use a prepaid travel money card instead of your usual debit or credit card overseas?
Prepaid cards come with features that help you to get more out of your holiday, plus you can use them in the same way as your debit and credit cards.
Here we take you through 7 key areas where prepaid travel money cards, debit cards and credit cards compete to help you decide which is the best card for your next trip.
1. Keep control of what you’re spending
Unlike a debit card, a prepaid card lets you keep your spending money separate from your current account. This means you can't overspend and dip into your household budget unless you choose to do so. Plus, there is no link to your current account if your card is lost or stolen.
Other than a credit card there’s no line of credit, so no borrowing and no holiday debt. A prepaid card only lets you spend what you load. Simple.
Thanks to our clever website and app, it’s easy to load funds onto your travel money card and check your balance whenever you want, wherever you are in the world.
2. Lower fees when spending abroad
With a FairFX travel money card you get award winning exchange rates and lower fees when spending abroad. Some debit and credit cards charge up to 3% when used overseas, so check before you travel.
With a FairFX travel money card, there are no fees in shops and restaurants. With our Everywhere Card there is a flat 1.4% currency charge wherever you spend in the world. All of our fees are laid out clearly for you to see before you order a card.
3. Lock in exchange rates before you travel
With debit and credit cards you’re at the mercy of fluctuating exchange rates caused by the likes Brexit and an upcoming general election while you're away. Some prepaid cards, including FairFX's, allow you to lock in an exchange rate when you're satisfied to avoid being stung.
And if you leave buying currency until the airport, you could get stung even worse. Our research recently revealed that many UK airports are offering less than one euro to the pound with some offering as low as €0.80 to the pound.
When you load one of our travel money card you can lock in a great rate when you load funds onto the card. This means you know exactly how much you have to spend and how much your holiday money has cost you. No nasty surprises.
Sign up to our rate alerts and we’ll let you know when the rate is in your favour.
4. Security of Chip & PIN
If your FairFX Card is lost or stolen, you can quickly report it by calling our 24-hour helpline or through our mobile app.
5. Sharing your travel budget
You don’t want managing travel money to get in the way of you having a good time. With a FairFX Family & Friends Card you can spend more time enjoying the things you love on your holiday and spend less time worrying about managing your money.
Unlike a debit or credit card, with our travel money card you can load and manage multiple cards from a single account. That means you can easily share out everyone’s travel budget from one account.
6. No more DCC!
Dynamic Currency Conversion (DCC) is a profit-making scheme run by merchants abroad who are looking to capitalise on travellers opting to pay in their home currency and therefore allowing the merchant to dictate the exchange rate.
Fortunately for people using prepaid Mastercard cards like FairFX’s, DCC is no longer a concern after Mastercard changed their rules in April this year.
Our CEO, Ian Strafford-Taylor described DCC as “nothing but a hyper-inflated rip-off, duping people into paying unnecessary fees and accepting unfavourable exchange rates”.
7. Use them all in a similar fashion
You might think that how you’ll be using your card is a major deciding factor but it doesn’t have to be. travel money cards such as the FairFX Cards, can be used in a similar way to debit an credit cards.
With a FairFX Card you can withdraw cash and spend abroad in the same way that you would at home. FairFX Cards are accepted anywhere the Mastercard Acceptance Mark is displayed.
However, it’s best not to use your FairFX Card when checking into a hotel or hiring a car as they may process a ‘pre-authorisation’ to cover them against non-payment. No money is actually taken from your card but funds are ring-fenced for up to 21 days and you don't want your holiday spending money to be blocked by your hotel.
Travel money cards give you the security and flexibility of a debit or credit card with additional benefits that make travelling much easier.
Remember: A prepaid card should be treated as cash, if you lose your card your money is at risk so keep it secure. Funds loaded onto prepaid cards are not protected in the same way as credit cards, but FairFX safeguards all customer funds using segregated client accounts to ensure your money is never compromised.