What are prepaid fx currency cards?
They are a relatively new idea and are taking over from travellers cheques and until recently i was not
aware of the existence of these prepaid currency cards. You basically have a plastic card that you pre-load with your
currency ie dollars or euros. Your Prepaid Currency Card is not a credit or charge card but it works like a
card. It is like a prepaid MasterCard® that carries a variable amount of money dependent on how much has been loaded
on to it. Each time you use the card, the purchase amount is deducted from the available balance and you are also able to withdraw
the funds as and when at the local atm at your holiday destination. You can also add extra foreign currency at any
time should you need too.
What are the advantages?
The first is the security aspect as unlike having all your holiday money
in cash if you have the prepaid currency card stolen you can get the funds on the prepaid currency card back.
Below is an explanation taken from the CaxtonFX prepaid currency card literature "You should treat your prepaid currency
card like cash in a wallet. If it is lost or stolen, you may lose some or all of the money on your card. As a result, you
must keep your Caxton card safe and not let anyone else use it. If you are issued with a PIN, you must immediately memorise
it and destroy the notification. You must keep your PIN secret at all times. Do not write it down or reveal it to anyone.
We recommend that you check the balance on your card regularly online. If you do lose your card or it is stolen or you suspect
that your card has been used by someone, you must tell us as soon as you can We will then cancel your card. We will
ask the police to investigate any suspected misuse of your card and they may need more information and assistance from you.
We will refund the amount of any transactions which the investigations show are not authorised by you, provided you have kept
your card and PIN secure. However, if the investigations show that any disputed transaction was authorised by you or you have
not kept your card or PIN secure, we will not refund the transaction amount. So unlike cash you are covered if you follow
Second is that these cards do not carry a foreign currency exchange rate fee, which
some card providers charge a fee of approximately 2.75% which they add on to the exchange rate.
And finally the exchange rate provided by the suppliers of prepaid currency cards is normally better than that provided
by currency exchange shops.
The first that
these prepaid currency cards require you to put the funds on before you go away so if you are looking to fund the holiday
spending money on a credit card then these won't help.
The next is that you will still
be charged an ATM withdrawal fee at the foreign ATM but this should be less than most debit cards or credit card providers
charge and finally they do not provide the protection that a credit card would should something you buy prove to
These are a great alternative to travellers cheques and for security those
who traditional carry all their holiday money in cash could consider carrying some of it on one of these prepaid fx currency cards.
Popular providers include