The good news about these fees however, is that they are more transparent than those that accompany debit and credit cards. Unlike a credit card you can’t be charged for interest, late fees, balance transfer fees and so on – the typical ways card providers make their money.
So who are prepaid cards right for?
Prepaid cards are very popular with the four million people who don’t qualify for a bank account – perhaps because of poor credit or because they are immigrants joining the country without a credit profile. Students too have embraced prepaid cards as a great way of budgeting and managing their money.
Compare pre-paid credit cardsIndeed prepaid cards have proven immensely popular among gap-year travellers as they provide welcome reassurance to parents who know they can always add money on to the card with a simple transaction, should their student son or daughter need it.
Above all however, prepaid cards have become a legitimate alternative to traveller’s cheques. They save you carrying bundles of cash with you, they’re easy to replace and some providers even offer 0% foreign exchange fees. Before you travel however, be sure to check the top-up methods permitted on the card – some will only allow you to top up face-to-face, whereas others will allow you to top-up over the internet or on the phone.
How do you find a good prepaid card?
In the United States, customers have quickly adopted prepaid cards with two out of three US consumers having purchased a prepaid card in 2006. The value of prepaid cards transactions is expected to top $185billion this year.
Their popularity is now catching on here in the UK too. Prepaid cards have become the fastest growing product with companies like the Post Office, lastminute.com, CaxtonFX, FairFX and Club 18-30 all launching products. With so many deals available, you should shop around for prepaid cards just as you would for a credit card.
The FairFX Euro Currency Card is one of the leading deals on the market and there is no card application fee when you order more than £500. FairFX also offers a Dollar Currency Card for travellers heading to the USA.
The key is look beyond the initial application fee and think about how you will use the card and how the provider’s fees affect you. Don’t just make a decision based on the initial cost of the card – think about what you need it for, how you will make top-ups and check that you can examine the account online so you don’t need to pay hefty call centre charges.
Compare pre-paid credit cards
