Prepaid cards prove increasingly popular with UK consumers
Holidaymakers are being encouraged to lock into the current strength of sterling against the euro and US dollar in order to make holiday spending more enjoyable this summer.
Loading foreign currency on to a prepaid card while sterling is still strong will secure a rewarding exchange rate for holidaymakers later on in the year.
Available in sterling, euros and US dollars, prepaid cards can be used abroad in restaurants, hotels, cash machines and shops, which is why experts are saying prepaid cards are a cheaper alternative to using a debit or credit card on holiday this year.
According to recent research, more holidaymakers are turning to prepaid cards due to their convenience and increased security as the most that could be lost should it be stolen or lost, is the amount of currency on the card.
Prepaid cards are not linked to a bank account, and should it become lost or stolen the account can be frozen so that the money can be retrieved.
However, while prepaid cards can be useful to holidaymakers while the sterling is so strong against the euro, most will still charge 2.5 to 2.7% to withdraw cash or to make a purchase.
Some prepaid cards have annual fees or charge if the card has not been used for a prolonged period.
An account manager for a lifestyle magazine commented on her recent experience with a prepaid card, which she has purchased for her holiday in July.
Lucie Burton, 26, said: “I read recently the pound was at a two-year high against the euro. Since I’m going to Spain quite soon I wanted to take advantage of the rate so I bought my euros and have loaded them on to the card.”
Due to the variety of prepaid cards available, it is important that holidaymakers compare the different rates and charges incurred abroad to make sure they are getting the cheapest and most cost-effective rates.