New Which? research finds the best sterling prepaid cards offer better value than their euro/dollar counterparts.
Tired of being charged through the nose by your debit and credit card provider whilst on holiday? Travel prepaid cards offer a competitive alternative to many credit and debit cards currently held by consumers.
However, for those interested in travel prepaid cards new research from Which? reveals you could be better off with the best sterling prepaid card rather than a dedicated euro/dollar prepaid card.
Prepaid card rates tracked over 6 weeks
We tracked the exchange rates on offer from sterling, euro and US dollar prepaid cards over a 6-week period in February and March 2013 and found that the best sterling prepaid cards beat their euro and US dollar counterparts when comparing their exchange rates, loading and ATM fees.
In our scenario, spending 500 euros on the best sterling prepaid card cost £5 less than on the best euro prepaid card and £3 less than the best dollar prepaid card on $500 spend.
Best sterling prepaid cards
ICE’s sterling Travellers Cashcard consistently offered the best option. The sterling prepaid card charges no foreign exchange mark-up on the MasterCard exchange rate, no foreign ATM fees and a 1.75% debit card load fee. The Travelex Cash Passport Globe and Caxton FX Global Traveller offer the next best options, charging no debit card loading fees or foreign ATM fees.
FairFx’s Anywhere card and My Travel Cash also offered competitive sterling card options matching the best on offer from dollar and euro prepaid cards. If you are unlikely to withdraw money abroad, FairFx’s Anywhere card offers one of the best options with a low 1.4% mark up on the exchange rate, but it does charge a £1 ATM fee.
Sterling and euro/dollar prepaid cards – key difference
Prepaid cards in a dedicated foreign currency differ from their sterling prepaid card counterparts in one key way. Money loaded onto a sterling card remain in pounds until you make a transaction abroad, where it is converted into the local currency at the time of the transaction, based on the rate offered by the card network and including any foreign exchange mark up.
A dedicated foreign currency prepaid card, for example in euros or US dollars, will convert money at the point it is loaded onto the card. One advantage of these cards is that you can ‘lock in’ currency on the card when exchange rates are favourable, though this can work against you if rates continue to improve after you have loaded the money onto the card.
For more information read our guide on prepaid cards.