When travelling to Majorca and Magaluf, having a credit card available is a very handy payment method. It gives you protection from pickpockets after cash, and it’s much easier than having to find places to cash traveller’s cheques. Of course if you don’t have a credit card you can’t use one. Or can you? With the advent of the new pre-paid cards yes, you can. This new style of card means that you can make full use of the benefits of using a credit card, without having an actual credit card.
The way these new pre-paid cards work may seem a little strange to people when they first encounter them, but it’s actually quite a simple concept. Instead of borrowing money from a credit card company, and then paying it back afterwards with interest, you have a card which you can load with cash as you might do a gift card say. Once loaded, you can then use it in stores and restaurants in the same way as you would a credit card, and because these pre-paid cards are usually backed by a big name like Visa or MasterCard, you get all the same safety and protection as you would with a credit card.
The biggest advantage to a pre-paid card of course is that because there is no way of you getting into debt with them, anyone can have one even if they don’t have a great credit rating. All this is very interesting, but where are the advantages of having one abroad?
Well, as I’ve already mentioned, the first thing is that just like a credit card, there is less chance of a thief stealing it, and if they did manage to do so, and tried to use it, the absolute maximum they could possibly spend is whatever the amount is that you have put onto the card. Many companies who issue these pre-paid cards also offer emergency card or cash replacement facilities too, so just like with a regular credit card you’re protected there too.
Another major advantage when you travel abroad is that some pre-paid cards are designed specifically for use abroad. Some of them offer excellent exchange rates as you put the money onto the card, so you load it with £’s and then spend Euros for example. This can make it much easier to keep track of what you are spending as you can easily see what’s on your card balance.
Strangely, travelling can actually be cheaper sometimes if you have a pre-paid card that you can use. For example, Ryanair have a policy where they charge every passenger a booking fee of £5 per flight. This means that if four of you are flying from the UK to Spain say, you’ll pay £40 in booking fees (£5 per person each way). The only method of payment which doesn’t incur this fee is to pay with pre-paid credit card, so if you have one of these, you’d avoid paying the £40 in booking fees.
Just like with a regular credit card, the terms and conditions of pre-paid cards vary, as do the interest rates offered, and who backs the card. So if you’re planning a holiday abroad, and want to get a card for this purpose make sure you look carefully at the various options and choose one which will be best suited to where you are travelling.
Learn more about prepaid cards at http://prepaidcreditcardsuk.org.uk/
