Teenagers heading abroad should be looking at prepaid bank cards – but which ones?
‘Tui took £260 off my prepaid card after I didn’t use it for six years’
No one forgets their first solo trip abroad, but if you want to remember it for all the right reasons, it will certainly help if you have the right plastic in your wallet or purse.
Over the coming months, thousands of parents will be waving off their kids as they head off on holiday with friends or go travelling.
But don’t let them make the mistake of using high-charging UK bank cards when they arrive.
Make a load of shop purchases and a handful of ATM withdrawals in Spain or further afield using some debit and credit cards, and the charges could easily add up to more than the cost of a cheap flight.
It’s much better to arm them – or yourself – with a card that won’t charge £2 every time you wave and pay, or cost more than £9 to take out the equivalent of £200 from a cash machine.
The obvious solution for young people – or anyone with standard bank cards – is a prepaid travel money card. They are quick and easy to get hold of – there are no credit checks – and once you have loaded them up from your UK bank account at a typical currency conversion fee of 1%-2%, they can be used abroad just like any other bank card – but (mostly) without hefty charges.
Guardian Money has spent this week trawling the market and come up with the best value cards.
The three standout cards, in our view, are Caxton FX Black, Sainsbury’s Bank Cash Passport and WeSwap. All will let you load multiple currencies – up to 18 in the case of WeSwap – and each allows you to make fee-free purchases in shops, and free ATM withdrawals – provided you are getting out the currency you have loaded on.
Website MoneySavingExpert claims WeSwap offers the lowest currency conversion fee – charged as you swap your pounds into the currency of your choice. It can be as low as 1%, provided you make the transfer at least a week before using it. You have to take out a minimum of £200 to get fee-free ATM withdrawals. The others don’t have this restriction. All three are Mastercards, meaning they should be widely accepted.
In each case, the card is free, and there are no fees to reload cash – which is typically done online or via a mobile phone app. Each card allows the user to move money between the currencies held, at the prevailing rate that day. It is important to choose the card that holds the currency of the places you are visiting.
Bank card expert Andrew Hagger, who runs MoneyComms, says: “It’s definitely worth applying for your cards a few weeks in advance so the traveller and their parents are comfortable with how they work and how to top them up.
“Both the parents and the traveller should make a note on their phone of the 24/7 assistance telephone number in case there are any issues or the card is lost.”
He says both Caxton and Sainsbury’s will issue a second card for free in the event that the first is lost. WeSwap charges £4.95.
Users should be aware that prepaid cards aren’t suitable when hiring a car, as most car hire companies will require a credit card to cover the excess deposit.
And don’t just forget about the card when you return home, warns Hagger, as some cards impose a fee if it isn’t used.
Caxton can charge £2 a month if an account hasn’t been used for over two years, and Sainsbury’s cardholders pay £2 a month after 18 months of inactivity. Don’t use these cards in the UK, as charges can apply.
So, which card? WeSwap may be the cheapest, and it certainly looks good, but overall the Caxton card would be our first choice, not least because it is long established.
The Sainsbury’s card can be delivered to your local store, making it a good last-minute choice, and it is easy to get back the balance post-trip.
Lastly, if the parent has a credit card, they should consider adding a second card to their account in their son’s or daughter’s name – assuming they trust their offspring not to run amok with it. Home bank cards are a useful back-up to carry, too.
After all, you don’t want to get that call in the middle of the night: “I’ve lost my wallet, and I’m stuck in XXX with no money.”
This article was amended on 10 June 2019 because an earlier version said that Caxton doesn’t have an inactivity charge. Its terms and conditions state that for some of its cardholders, there is a monthly fee of £2 for accounts that have not been used for over two years. This has been corrected.
