New Pre-paid Travel Card Aimed At Overseas Travellers

Millions of Britons travel overseas each year, but deciding how to get the most for you travel money can leave most travellers in a quandary.

Most holidaymakers opt for a concoction of travellers’ cheques, cash and credit cards. However, calculating how much you get for your money with theses various payment methods can be rather tiresome and difficult as different fees, charges and exchange rates come into play.

Now there is a new kid on the block that will either simplify your foreign spending needs or further complicate them.

Pre-pay travel cards are the new entrants to the market and work by allowing holidaymakers to load money onto a card in the UK and then use it to withdraw cash from foreign ATMs.

The question for many Brits is how do they compare to cash, travellers cheques and credit cards in terms of value for money for the traveller?

Independent online comparison service Moneyfacts.co.uk collated and analysed information available regarding pre-paid cards in order to give consumers a clearer picture regarding the value they offer.

"With so many options now available to travellers; debit cards, credit cards, travellers cheques, cash and the latest entrant to the market, prepaid travel cards, the choice is already somewhat baffling," said Moneyfacts’ Rachel Thrussell.

"Both travellers cheques and prepaid cards offer the consumer protection against loss and theft, guaranteeing fast replacement," she added.

"However the added benefit of using a card is that it is operated via an ATM using an individual pin, so travellers don’t have the hassle and worry of carrying around their passport or having to remember to record their spent travellers cheque numbers.

"Additionally if you do run short of cash while overseas, the prepaid cards can be reloaded over the phone, but do plan ahead as the reloading time varies between providers."

That’s the virtues of pre-paid travel cards dealt with, but do they offer value for money for the traveller?

"Moneyfacts researchers . . . took to the street again to highlight just how much difference small variations in exchange rates and fees can really have on the consumer's pocket, and to explore whether prepaid cards are a real alternative to traditional travellers cheques," Ms Thrussell explained.

"The Western Union card certainly gives travellers cheques a run for their money; however when considering simply the initial costs, travellers cheques on the whole win, albeit by a pretty small margin," Ms Thrussell said.

"There is however one final piece of the ‘travel money cost’ puzzle missing – overseas charges.

"Often there will be a combination of foreign exchange charges and commission, and unfortunately especially with traveller’s cheques, this is unknown cost until you are overseas and these can vary depending on the amount borrowed.”

Alisdair Milton
7th July 2006

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