What travel card should you choose for your next holiday?

• What are prepaid travel cards?
• What are travel credit cards?
• What is the best card option for overseas travel?
• What other cards can I use for travel?
• Remember to keep your money safe

When it comes to travel cards, there are many choices, such as prepaid travel cards, currency cards, travel credit cards and more.  The question is how to choose the right one? And how do you cut costs and save money on your next holiday overseas?

What are prepaid travel cards?

Prepaid travel cards can be used like debit cards. You can spend money on your card, withdraw money from cash machines, check your spending, and more. But unlike a debit card, you have to top it up, a bit like pay-as-you-go.

A good thing about getting a prepaid card is that no matter your credit history, you should be eligible (although some checks, including security checks, may still apply). Some of the best prepaid cards for travel offer on-the-hour foreign exchange rates and without the high commission charges. Normally, these charge a small exchange fee. These include Revolut, Currensea, and Wise (formally TransferWise).

Many of these cards can hold multiple currencies, which is useful if you plan to visit different countries that use different currencies. It also means you don't have to carry cash or worry about exchanging any leftover cash when you return home - that can normally be done on the providers’ app.

Prepaid travel cards can be useful for budgeting as there is no overdraft or credit and less chance of overspending. However, before you consider a prepaid card for holidays abroad, check all the additional charges and fees, such as withdrawing money. There may also be charges for topping up your card, replacing your card, and more, it is worth comparing these costs when deciding between a prepaid card and a debit card.

What are travel credit cards?

All credit cards are a form of debt, and you will have to pay whatever you borrow, sometimes with interest. So, it’s important to try to keep your spending in check. Travel credit cards are specialist cards specifically made to offer travel benefits, competitive exchange rates or no fees for using your card abroad.

Some travel credit cards offer perks such as cashback, travel incentives and vouchers, but it is important to remember that these perks should never be used as a reason to spend. Some travel credit cards offer fee-free usage overseas, examples of this include Barclaycard Rewards Card and Santander World Elite Credit Card (monthly fees apply).

There are quite a few differences between a prepaid card and a credit card. For example, when applying for a credit card, you will be subject to a credit check. Interest rates charged and the total balance you’re allowed to have may depend on whether you have a good or bad credit score. Also, if you plan to use your credit card overseas, avoid cash withdrawals or cash advances with your credit card - unless you know these are included and free.

What is the best card option for overseas travel?

It depends on your circumstances. One consideration is how often you travel. Do you want to budget and control costs while on holiday? If you often are over-indulging on holidays and want to limit yourself, a prepaid travel card could be a good option.

A credit card has added protection. Section 75 of the Consumer Credit Act 1974 does not just offer additional consumer protection and rights for UK purchases, it also covers foreign transactions. But unless it’s a travel credit card, foreign exchange rates and overseas withdrawals can be very costly. No matter what travel card you choose, there will be pros and cons, so you may need to research before making a final decision.

What other cards can I use for travel?

Other types of reward cards, such as airline reward credit cards, help you save money on flights and hotel stays by earning points. These points can then be used for future flights and accommodation. However, some cards are locked to specific airlines and hotel chains, so you need to decide if you want to commit to a limited range of options or to be able to choose from a wider range of airlines and accommodations.

American Express is a popular choice for rewards. The Amex Preferred Rewards Gold offers no annual fee in the first 12 months (this may not apply if you have held an Amex card in the past 24 months). After this period, the annual fee for this card is £140. American Express offers other cards without any annual fees while still allowing you to earn points on your spending.

Remember to keep your money safe

Be safe and careful with your possessions, especially with passports and mobile phones with banking apps. Contact your provider if your card is lost or stolen immediately, or freeze or block the card on the provider's app immediately.

Look for suspicious transactions or purchases you don’t recognise or your card statement and inform your card provider immediately. If your card is cancelled, you can ask for a replacement to be sent to you. If you have no other money, there is usually a way for your bank to give you emergency money.

Final thoughts

Finding the right travel card for your holiday can significantly impact your peace of mind while abroad. Prepaid travel cards offer controlled spending and convenience, while travel credit cards provide valuable perks and protections. Your choice will depend on your travel habits, financial needs, and preferences. Comparing the features, fees, and benefits of each type of card will help you make an informed decision and save you money.

Remember, whichever card you choose, always stay vigilant about the security of your money and personal information. Happy travels!

Did you enjoy this guide? Please share with family and friends.