A prepaid travel card is foreign currency in the form of a card, which you can use for your spending purposes abroad. Also referred to as travel money card, a prepaid travel card is a plastic card similar to a credit or debit card in appearance. You can pre-load a card with a single foreign currency or multiple currencies of your choice. Prepaid cards offer the convenience of easy access to money when abroad without the need for a bank or credit card account.
Prepaid Cards Accommodate Various Spending Needs
You can use a prepaid travel card for your shopping needs, or to pay for your food, stay, and other services, when abroad, at all locations supporting the card; for example, if you are using a MasterCard prepaid travel card, you can use the card at all commercial locations accepting MasterCard. Just swipe the prepaid card to make a payment.
Prepaid Cards: Purchase, Exchange Rates and Top-up
Prepaid travel cards are offered by financial institutions such as banks, foreign exchange outlets, and money transfer service providers. You can purchase a prepaid card in person by visiting the service provider outlet. Many service providers also offer online card purchase facility.
Load your prepaid card with a select foreign currency or currencies of your choice. Load the card for as much amount as you want within the minimum and maximum limits specified by the card provider. There are single and multi-currency prepaid cards. Choose cards depending on your requirement; for example, if you are planning a vacation trip to multiple countries, a multi-currency card could be beneficial.
Some card providers may charge a fee towards card application. You can pay for the card and the amount you want to load, in cash, or using your debit card or bank account; check with the card issuer about their acceptable modes of payment. You may receive the card immediately or it could take a few days to reach you.
Exchange rates are applicable as according to the rate prevailing at the time of loading the card. But, some cards offer you the advantage of locked-in exchange rates. For example, cards such as Cash Passport (available in the UK, Australia, New Zealand, Brazil, and South Africa) and gocash (available in the UAE) lock in exchange rate applicable for the foreign currency at the time of load. The exchange rate remains the same till you reload the card. Ask your card issuer if their card offers such features.
Some cards may need to be activated on purchase. Some may require you to register to avail facilities such as card top-up. Get clear instructions from the issuer or read instructions on the card for using the card effectively.
You can reload, or check the balance on the card, by visiting an authorised retail outlet, or online, or through a phone call or SMS. Check with the service provider to know about the channels they offer for such activities.
You get the convenience of spending abroad with a swipe of the card. Prepaid cards eliminate the inconvenience of having to visit a money exchange outlet to encash your traveller’s cheques (if you are of the habit of carrying them). With cash, there is always the risk of theft, which is eliminated with the use of a prepaid card. Even if the card is lost, you can get a substitute with your last balance, free of cost or for a fee, depending on your service provider.
Prepaid cards are not sourced from your bank or credit card account. So, in case of theft or misuse, your bank or credit card account remains intact, and you lose only the money available on the card.
You get to spend only as much as you load on the prepaid card; so, you don’t have to worry about your spending going out of control.
Prepaid Cards: A Note of Caution and Precautions
Exercise caution in purchase and usage of a prepaid card so that you do not lose money due to ignorance:
Ask the service provider about all applicable charges. There could be charges in the form of initial fees during purchase. Some service providers may levy a charge for withdrawing cash from ATMs abroad, or charge a percentage of every transaction executed abroad.
Some card issuers may charge a fee for the payment mode you are using for top-up; for example, you may need to pay a fee if you are using a credit card to reload your card.
Fees (usually monthly) may also apply if you have not been using your card for a specific period of time. There could also be fees if you want to redeem the balance on your card as cash.
Read the Terms & Conditions of the prepaid service provider thoroughly to know about applicable charges beforehand.
Use the local currency to make payments when abroad, if you are using a multi-currency card. Retailers make profit on exchange rates when you use your native currency.
Never disclose your prepaid card PIN number, to reduce your risk of losing money