Prepaid travel cards FX products FAQs: 25 common questions answered

Travel money made simpler for UK travellers

A prepaid travel card can make overseas spending predictable, safer, and easier to manage. Used well, it helps you lock in exchange rates, avoid overspending, and separate holiday money from your current account. Here is what to consider in 2025 so you spend with confidence abroad.

Who benefits most

If you want a fixed holiday budget, value app controls, and prefer not to expose your main bank card, a prepaid travel card is a practical tool. It suits families, students, city breakers, and frequent travellers visiting multiple countries who want multi-currency wallets and simple top-ups without affecting their bank balance.

Key terms explained clearly

• Electronic money (e-money) - Your balance is not a bank deposit. It is safeguarded in ring-fenced accounts separate from the provider’s business funds.
• Ring-fencing - If the prepaid provider fails, client money should be protected. If the bank holding those funds fails, there is no FSCS cover.
• FSCS protection - Not available for prepaid e-money balances. Treat cards as spending tools, not savings.
• Chargeback - Some cards offer scheme-level chargeback which may help in certain disputes. This is not the same as Section 75.
• Section 75 - Credit card protection that does not apply to prepaid cards.
• Pre-authorisation - Hotels and car hire firms often place a hold. Many prepaid cards are rejected or funds can be locked, restricting access.
• Multi-currency wallets - Hold and switch between currencies in-app, often locking a rate before you travel.
• FX mark-up - A percentage added to the exchange rate on some transactions or when spending from the wrong wallet.
• Cash withdrawal limits - Daily caps at foreign ATMs apply and fees may be charged.

Prepaid travel cards are for controlled spending and convenience - not long-term storage of funds.

Leading options at a glance

Below is a snapshot of popular UK-style features. Always check live terms before applying.

• Most cards support contactless and chip & PIN for day-to-day spending.
• Multi-currency wallets help frequent travellers manage FX exposure across trips.
• Neither example connects to your bank account, limiting fraud impact and overdrafts.

What it costs and why it matters

UK prepaid travel cards often charge a mix of fees:

• Purchase or top-up fee - sometimes free, sometimes a small percentage.
• FX mark-up - if you spend from the wrong currency wallet or provider adds a spread.
• ATM withdrawal fee - a set fee or percentage abroad, with daily caps.
• Inactivity fee - charged after a period without use.
• Redemption fee - to move unspent money back to your bank account.

Impact on your trip:

• Budgeting - Load a set amount and track spend in-app to avoid overspending.
• Predictability - Lock rates in advance for known costs across multiple destinations.
• Hidden costs - Hotel or car hire holds can tie up funds and reduce card usability.

Risks to watch:

• No FSCS - Do not hold large balances for long periods.
• Bank failure risk - Ring-fencing covers provider failure but not the bank safeguarding the funds.
• Acceptance gaps - Some merchants decline prepaid cards for deposits or pre-authorised transactions.

Who is eligible in the UK

• Residency - Typically UK residents aged 18 or over.
• ID and verification - Expect standard ID checks. Branch applications can help if online checks fail.
• Credit checks - Usually lighter than for credit cards, as you are not borrowing.
• Loading methods - Bank transfer, debit card, in-branch cash at certain providers.
• Card delivery - Often 2 to 3 working days when ordered online or via app.

Good to know:

• Separate from your bank account - helps limit fraud exposure and prevents accidental overdrafts.
• Family travel - Some providers allow additional cards or easy instant top-ups for children or companions.

Set-up and everyday use - quick steps

1. Compare fees, limits, exchange rates, and acceptance rules.
2. Apply online, via app, or in branch with ID.
3. Activate the card on arrival and set a secure PIN.
4. Load funds in GBP or chosen currencies.
5. Create wallets for each destination currency.
6. Lock rates before travel where available.
7. Spend via chip & PIN or contactless and track in-app.
8. Withdraw cash only when needed to avoid extra fees.

Upsides and trade-offs

Prepaid cards are widely accepted for everyday purchases and help you budget with a fixed pot, supported by app controls and freeze features. Multi-currency wallets simplify multi-stop itineraries and can reduce FX costs if you plan ahead. Some offer scheme chargeback for disputes. Yet they are not a one-card solution. They often incur ATM and inactivity fees, lack Section 75 protection, and can struggle with hotels or car hire pre-authorisations. Limits on withdrawals and load sizes may constrain longer trips. Treat them as a travel tool, not a savings vehicle.

Red flags before you commit

• Pre-authorisations - Check hotel and car hire rules. Use a credit card for deposits if possible.
• Fees - Review ATM, FX, inactivity, and redemption fees to avoid surprises.
• Balance size - Keep only what you plan to spend due to no FSCS protection.
• Dynamic currency conversion - Always choose to pay in local currency to avoid poor rates.
• App access - Ensure you can top up, freeze, and view transactions abroad.

Keep balances lean, turn on notifications, and avoid DCC at the till.

If not this, then what

• Credit card with no foreign transaction fee - Strong for Section 75 protection and hotel or car hire holds, but requires discipline to clear balances.
• Debit card with low or no FX fees - Simple for cash withdrawals and everyday spending, but lacks Section 75.
• Cash - Useful as a backup in small amounts, but higher theft risk and no refund if lost.

A blended approach often works: a fee-free credit card for deposits, a prepaid travel card for day-to-day control, and a small cash buffer.

Your questions answered

• Are prepaid travel cards accepted everywhere? - Generally yes for retail and dining, but they may be refused for pre-authorisations such as car hire or some hotel deposits.
• Do I get Section 75 protection? - No. Prepaid cards are not credit. Some scheme chargeback rights may help in limited cases.
• Is my money safe if the provider fails? - Funds are ring-fenced as e-money. If the provider fails, safeguarding applies. If the safeguarding bank fails, there is no FSCS protection.
• Can I withdraw cash abroad? - Yes, but daily limits and ATM fees often apply. Consider cash only when necessary.
• How do multi-currency wallets save money? - You can convert when rates are favourable and spend from the local currency to avoid extra FX mark-ups.
• What are typical load limits? - Providers vary. For example, common ranges include £10 minimum loads, up to £5,000 per load, and daily ATM caps around £500.

What to do next

• Shortlist 2 to 3 cards with clear fees and multi-currency wallets.
• Check acceptance for your itinerary, especially hotels and car hire.
• Plan currency loads and lock rates in advance.
• Keep balances modest and enable app alerts.
• Carry a backup card and small cash reserve.

Smart move: screenshot key card numbers and provider helplines, store securely, and know how to freeze the card in-app.

Important information

This article provides general information for UK consumers. It is not financial advice. Terms, fees, and acceptance can change. Always read the provider’s latest documents and consider alternatives for deposits or pre-authorisations. If unsure, seek independent advice.