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Tourist in a straw hat looking out to sea

Prepaid cards are often used by tourists whilst they are abroad

Prepaid cards are useful if you're going on holiday or you want to tighten the reins on your spending.

The idea behind prepaid cards is simple - you load money on to the card and use it to withdraw cash or make purchases. Unlike credit cards, there is no borrowing facility.

Many of these cards are a cheaper option for spending abroad than many credit or debit cards, and some tourists also prefer to carry one of these rather than wads of foreign currency. 

Choosing the best prepaid card

As it's not possible to spend more than the pre-loaded amount, you'll never have to worry about interest charges. 

Prepaid card providers don't do any credit checks on applicants - there's no credit involved - so if you have a poor credit rating, this type of card is a good option.

It's important to pick the right prepaid card as some charge you each time you top up, make a purchase or withdraw cash.    

We've reviewed a selection of euro and dollar prepaid cards and sterling prepaid card, and ranked them based on the exchange rate.

Getting the most out of your prepaid card

There are some prepaid cards that offer credit building services, which will improve your credit score. 

These cards charge a monthly fee, which after a certain period of time will appear as a completed loan on your credit report, making lenders more likely to approve you for traditional forms of credit in the future.  

However, it's worth assessing whether the advantages of possessing one of these cards are worth the fees associated with them.   

Other common charges applied by prepaid card providers include; 

  • application fees 
  • top-up fees
  • transaction fees 
  • ATM withdrawal fees 
  • inactivity fees

For more information on prepaid cards: see our guide How do prepaid cards work

Prepaid cards - keep an eye on your balance

Prepaid cards are issued under the Visa and MasterCard network and can be used at most locations that accept these forms of payment.

You can preload most cards at cashpoints, over the internet, via text or by phoning your provider. 

However, as you can't get any credit on standard prepaid cards, you need to regularly check your balance and top up when necessary, so you don't run out of funds at an awkward moment.

It's also worth bearing in mind that prepaid cards offer no protection for losses under Section 75 of the Consumer Credit Act, although those using Visa cards can still retrieve funds using the chargeback system

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