PRE-PAID CARD CAN STOP HOLIDAY DEBT

Dear Cash Queens

I’m going on a late summer holiday this year and I’m thinking about getting a pre-paid card to use for my spending money. I don’t have a credit card and don’t want to carry big sums of cash around. I don’t know where to start to find a pre-paid card or what to look for. Can you point me in the right direction?

Cash Queens say:

Pre-paid cards can be an excellent way to manage money while on holiday. They are good because they don’t allow you to get carried away spending too much and ending up in debt – you can only spend what you have loaded onto the card.

They can also help you to budget for a trip away as you can load them up with cash whenever you want and therefore save up over a period of time, putting a bit away each month.

But they are not all the same and you need to ensure you do your homework as they have a complex array of charges and fees. Some charge a fee for the card, top-up fees, transaction fees, ATM fees and overseas withdrawal charges – all of which can eat into your spending money if you choose the wrong one.

You will need to decide how you will use the card once you get to your destination.

If it is for purchases only, you need to find one that doesn’t charge transaction fees or you’ll be hit each time you use it. If you think you might want to withdraw cash from an ATM, you must compare the charges and find one that has the lowest fees.

Some cards let you load up with a specific currency, so there are no foreign exchange fees.

This can be good if you are planning ahead and can load up the card when the exchange rate for your chosen currency is good.

If you do choose a card and load it in pounds then make sure you pay for transactions in local currency while on holiday, or you may face a low exchange rate and pay more than you expected.

You can compare cards on comparison sites such as Moneysupermarket.com.

THE BIG Q