Pre-Paid Travel Cards

What are Pre-Paid Travel Cards?

The convenient and secure way of spending abroad, in this guide we’ll illustrate why it’s best to go with a pre-paid travel card, things to look out for and which card providers we recommend when going abroad.

Why Use Pre-Paid Travel Cards Instead of my Own Bank?

Things to Look Out For

• Exchange Rates – most pre-paid travel card providers set their own exchange rates, usually adding 1-2.5% as an exchange fee. That being said, it can be more cost-effective to accept this fee than to use your UK debit card for overseas transactions. With fluctuating exchange rates, when you buy on a pre-paid card, you lock in the rate when it’s good. If you’re tracking currency fluctuations, you can optimise and buy currency for your pre-paid travel card when the pound is strong. With debit cards, you get the exchange rate on the day you purchase. If the pound is strong that day, you’ll be quids-in, but make purchases when the pound is weak, and you’ll be losing out.

• Fees –  Like UK bank debit cards, pre-paid travel cards can be loaded with fees. Check out the terms and conditions before you sign up for something. Some things to look out for include:

• • Application & replacement fees – applying for a card can cost up to £10, as can a replacement card if you lose it. Some providers set the expiry date as little as one year, and you could find you have to pay a fee to continue using the money on your card after the expiry date.
  • Transaction fees – Like debit cards, pre-paid cards can charge you to use ATMs or charge per transaction.
  • Inactivity charges – usually, these come in after 12 months, but if you haven’t used your card in a while, the provided could charge a couple of pounds per month for lack of use.
  • Refunding fees – Most providers will charge a fee or set low exchange rates to refund money back from your card. It is best to get too excited by great exchange rates and not overload your card with more money than you are likely to use.

• Loading & Transaction Limits – Get a card to suit your needs. Some cards have a loading limit, which means they won’t hold more than X amount of money. Transaction limits can be as little as £50 per day for some card providers – this may cause you a headache if you need to make a big transaction. However, it is helpful for frivolous spenders or parents who want to make sure their kids keep their spending in check!
• Is Your Money Safe – Choose a card backed by a bank or building society. This way, when you put money onto it, your cash is in what’s called a ‘ring-fenced account’. This means that your money is in a different account from the pre-paid card provider’s account. So if the company goes bust, the bank or building society still holds your money.
• Spending Exceptions – Pre-paid travel cards are almost always advertised as ‘accepted anywhere you see the VISA or Mastercard symbol’. Whilst this is mainly true, you are unlikely to be able to hire a car using one of these cards. Some users also raise an issue of them being accepted at toll booths and at petrol stations. If you want to travel lots and use your card, this is something to bear in mind.

Recommended Card Providers

This is not a list of all pre-paid travel card providers, and we recommend that you do your research and find the right card for you.

• Wise.com (formally Transferwise- our personal favourite)
• Caxton FX
• Post Office
• Fair FX
• Revolut
• Travelex

Our top tip is that we find a currency card such as Wise is fantastic, and makes it easy to transfer money fast and avoid currency exchanges.

Disclaimer

For those on our WSC instructor internships we recommend creating a Wise account,

We have spent a considerable amount of time organising with our resorts to ensure that they can and will pay your salary into your Wise account because it has a real Canadian bank account attached to it which not all travel cards have, even though they allow a Canadian currency within their banking system (its sometimes a foreign bank allowing a foreign currency). We will not check with the resorts and their HR teams and 3rd party accountants to see if they will pay into your travel cards, it takes too much time and takes up too many man-hours to find out. In the event of a resort or employer not being able to pay into your Revolut or other card provider you will have to open up a Canadian bank account, which has a degree of hassle attached to it and will involve booking a meeting with a local bank, paperwork, transportation logistics and possibly time off training or work to accomplish this. Boring right?

Those who are just on our ski or snowboard courses, without a work option you are not being paid by a Canadian employer, so you do not need to worry about this aspect. However, regardless most of our clients use Wise.com and Love it! So we’ve included the link to give you a commission free initial transfer and help you get set up.