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Prepaid holiday cash cards: any experiences?


 YCCMB
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I've been looking into these cards for one of my sons, who is shortly off on a longish trip to the USA. Given that he will need to take a reasonable amount of money with him, and that travellers' cheques are becoming a rather antiquated means of taking money abroad, and given also that he refuses to own a credit card, I thought that this might prove a better solution than him travelling with too much cash.

My initial view of these, from previous cursory reading, was that there are a lot of hidden charges nevertheless, and that they probably aren't a good solution. However, having read about the current ones on offer, there are one or two - the Caxton FX card plus some others - which seem to offer a good deal, including the ability to draw cash from ATM's with no charges.

I realise there may be other solutions, but given his personal and financial situation (he's still a student) they aren't open to him or appropriate to his circumstances.

Has anyone got/used any of these cards and discovered any downsides that may not be evident from reading what's published online? I know they don't work on motorway toll roads in France, or at petrol stations, but as he doesn't drive that's not an issue.

Thanks in advance.

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I took one out for a trip to Canada a few years ago, and could use it either to make payment or to withdraw from an ATM. These days it seems to be the recommended way to take money, as you say.

I think you could top it up during its lifetime, which might be good if your son runs out of cash or had unexpected costs somewhere along the line.

I think my only reservation was that, as the sum remaining did not show up on the ATM screens, i was never quite sure how much was still on it, till I was taking my hosts out for a Thank you meal and it rather embarrassingly did not have enough left on it. So I paid that on my credit card.

Only other downside is to make sure you soend ALL the amount credited as, I seem to remember you could not jst withdraw the sterling equivalent of the balance remaining - which had been created in Canadian dollars. Luckily it was not a huge amount, but as I was not going back to Canada in the ensuing 12 months I could not use it. I gess I could have sent the card to my cousin over there, and given her the password so she could have taken the remaining cash.

Angela
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Thanks , Angela, that's helpful. I have found one card: the Caxton FX , which charges you £1.50 to refund any remaining balance if you wish to do so after a trip. Others charge more. As you say, it would be a shame (and a cost) if you had money left that you couldn't get changed back. I think also now that some offer an easy way to check your balance by SMS.

Good info and advice, though..and I think it is definitely the best way forward for my son, and also offers a reasonably secure way to top it up if there's an emergency or a need.
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If he doesn't want a credit card, then does he have a debit card, would he have a debit card, ???

When we went to the States and Canada we only took our Visa or was it Mastercard Debit cards with us and no problem. I know that we have travelled with debit cards from both companies as we have changed french banks several times and different banks seemed to use different ones. When we lived in France we never had credit cards, just used the debit card system all the time. The good thing being that there was no 'debt' to come back to.

That is what I would do and check that the card could be used abroad.

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Thanks, folks. He does have a debit card, Idun, but that's the problem as Anton points out: the fees for using it. He won't know the extent of the extra charges till he gets a statement.

The advantage of these cards (as long as he picks the right one) is that he puts the money on the card before leaving, and he knows he has $100 on the card so he has $100 to spend. No extra cost.

Thanks for the MSE link, Pickles. I've looked at "Which?" and Moneysupermarket.com but forgot MSE, which isn't like me. I usually go there first!
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[quote user="You can call me Betty"]Thanks, folks. He does have a debit card, Idun, but that's the problem as Anton points out: the fees for using it. He won't know the extent of the extra charges till he gets a statement. [/quote]

Change bank accounts to Norwich and Peterborough Building Society and no charges - just like the Nationwide was but now is not. Plus in our experience of drawing euros in France a very good exchange rate.

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What about travellers cheques? Perhaps he can get a pre-paid card in the US, charge it with money from travellers cheques as he goes. Visa offers this service, he can get a card direct or visit one of their stores to get one when he is there. Might be worth a phone call to check if he can get one as a visitor with no 'fixed' address.

http://usa.visa.com/personal/cards/prepaid/prepaid-card.html

Get his travellers cheques from somebody like Amex (who also offer pre-paid cards) so you get quick replacement cheques if stolen. In fact if you book his flights through them and buy his travellers cheques through them then I believe he will get free medical insurance for his trip. To be honest it is the only reason I still keep my Amex card because of the free benefits you get with them when traveling outside Europe.

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[quote user="Quillan"]In fact if you book his flights through them and buy his travellers cheques through them then I believe he will get free medical insurance for his trip. To be honest it is the only reason I still keep my Amex card because of the free benefits you get with them when traveling outside Europe.[/quote]

I'm drifting again, but I have been impressed by the insurance offered with French Visa cards if you pay for even only part of your holiday with their card. Having had a first-hand report from a friend who required hospitalisation whilst away, it does seem to work. Although many charge for their cards, you can get some for free if you have savings with the same bank: viz Boursorama/Fortuneo.

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[quote user="Pickles"]I'm drifting again, but I have been impressed by the insurance offered with French Visa cards if you pay for even only part of your holiday with their card. Having had a first-hand report from a friend who required hospitalisation whilst away, it does seem to work. Although many charge for their cards, you can get some for free if you have savings with the same bank: viz Boursorama/Fortuneo.
[/quote]

This is true but my experience has been that it does not come with the standard card but the Gold Card version, well with Banque Populaire anyway when I was with them. Of course you pay a lot more for the Gold Card version and if you don't use it for travelling abroad much then the cost way outweighs the benefits.

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Thanks for the further suggestions.

Changing bank accounts...well, not an option I'm afraid. As I mentioned, he's a student. No student loans as he's a postgrad. His earnings are sporadic as he's entirely self-employed. I expect (like me) that you won't remember or have recent experience of trying to open a bank account without any sort of guaranteed income, but it's not that simple. Besides, it IS a bit like using a sledgehammer to crack a nut for the sake of a 3-4 week trip.

Quillan: I don't know if you've travelled recently with travellers' cheques, but these days it's a bit like offering to pay with beads and trinkets. I realise that once upon a time this would have been the best solution, but even in the USA it's not that easy to use them. My husband took some to Egypt a couple of years ago and, if it hadn't been for the fact that I'd changed cash before leaving the UK we would have been potless. It took us 2 days to find a BANK that would change them!

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Re Travellers Cheques, certainly no problem with Banque Populaire and with BNP. We get many quests from outside the EU with them and I just give them to the bank in the same way as I would a normal French cheque, last one was three weeks back. Perhaps there is a difference when it comes to try to cash them for cash, something I have not done for a few years.

Anyway it might still be interesting to follow the link, you may be able to transfer money from his (or your) bank to the card.

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I forgot to mention that using a French Visa card, well the one I had with Banque Populaire, was a nightmare when abroad. It stopped giving me money on holiday and when I got back and went to the bank they told me I had to tell them before I went how much I would want and they would set the limit accordingly. The default limit is very low.
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I'm sure there's fundamentally no problem with travellers' cheques, Quillan, but the additional commission charges, handling charges and so on don't make them that attractive. These are largely avoided with prepaid cards, as far as I can tell. 

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[quote user="Quillan"]

Re Travellers Cheques, certainly no problem with Banque Populaire and with BNP.[/quote]

It certainly wasn't the type of travellers' cheques that caused us a problem in Egypt. The answer to the question "Can I change some travellers' cheques?" was "NO". They didn't even see which bank the cheques were from. They were Amex, BTW, which I'm pretty sure is better known that BNP or Banque Populaire.

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Using a European visa card or the like over here is quite expensive. But the prepaid Visa cards are very commonplace here too, I think it costs something like $55 for a $50 card and they can be used pretty much everywhere. Walmart sells them for example. I started using one about a year ago until I was finally allowed to open a bank account here in the US.

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[quote user="You can call me Betty"][quote user="Quillan"]

Re Travellers Cheques, certainly no problem with Banque Populaire and with BNP.[/quote]

It certainly wasn't the type of travellers' cheques that caused us a problem in Egypt. The answer to the question "Can I change some travellers' cheques?" was "NO". They didn't even see which bank the cheques were from. They were Amex, BTW, which I'm pretty sure is better known that BNP or Banque Populaire.
[/quote]

I am talking about me cashing them or more to the point putting the money in my bank account as a retailer not as a user. All Travellers Cheques I have had are from Canada, US, Australia, New Zealand and South Africa and in the main have been American Express. There is absolutely no problem with either of the two banks I mentioned accepting them for payment in to my account. More simply, give me your Amex Travellers Cheques and I will cash them for you as a retailer.

Also you pay the commission and any charges when you buy the cheques, once you have them there is no further charges for both the user or the retailer. As to the costs I suspect they will tell you on their website. If your in the UK you can also get them from the Post Office.

Meanwhile what I was saying about buying a card in the US seems true judging by what Richard says

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Betty,

On my first trip to England from the US  in 1970 to work on an archaeological site, and not being that au fait with foreign travel, I bought a lot of ?American Express travellers' checks. Some 'went missing' and I got a refund. I now wish that I had just got a lot of pounds from my bank in the US rather thann have a lot of travellers' checks to get rid of afterwards.  

We stayed on a campsite in France last year that wouldn't let you use cash and made you 'buy' a card with credit on it for a certain amount of euros. I think they didn't trust some of the people working on the site with cash. It was a pain in the neck because a few beers used up the euros on the card and we had to get more put on it and at the end of the holiday we had to hand in the card and get euros refunded. However, we liked the site and would return.

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Thanks! Well, it's useful to know you have no problem cashing them, Quillan, although it doesn't really help resolve my OP unless you want to open a B&B in lower Manhattan....[:D]

I'll leave you with this little quote from Moneysupermarket.com's guide to travel money:

Travellers cheques, while secure and offering peace of mind are not always the

cheapest way of carrying your money overseas. This is because there are a

number of charges to take into account.

Commission charges are frequent with travellers cheques and are often as high

as 2-3%. Handling fees are also regularly charged and you could even face

another charge when you cash your cheque in. Shopping around to get the best

deal is crucial.

The option to buy a Visa card in the US seems a good one....but if it costs $55 for a $50 card, that's a bit hefty, IMO. The cards I'm looking at, bought and loaded with dollars in the UK, can be obtained free, and are Visa cards as well. They can be topped up via SMS from your own UK account and the top-up funds are available on your card within minutes, apparently.

Anyway, I'm grateful for the input from one and all, and some useful food for thought. If anyone else has had any first hand experience of these cards and has encountered anything negative that I've overlooked, it's be great to hear.

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[quote user="dwmcn"]

Betty,

On my first trip to England from the US  in 1970 to work on an archaeological site, and not being that au fait with foreign travel, I bought a lot of ?American Express travellers' checks. Some 'went missing' and I got a refund. I now wish that I had just got a lot of pounds from my bank in the US rather thann have a lot of travellers' checks to get rid of afterwards.  

We stayed on a campsite in France last year that wouldn't let you use cash and made you 'buy' a card with credit on it for a certain amount of euros. I think they didn't trust some of the people working on the site with cash. It was a pain in the neck because a few beers used up the euros on the card and we had to get more put on it and at the end of the holiday we had to hand in the card and get euros refunded. However, we liked the site and would return.

[/quote]

I can see how both those experiences would have been a PITA.

Ladies and gents, thanks for the suggestions and input. I didn't want to get too detailed about this, but the truth is we're talking about quite a lot of money: the boy child has won a travel bursary that's quite substantial, and both he and I are worried about the potential for loss, theft or misappropriation of the money, given that he'll be travelling alone and won't necessarily be staying in 4* luxury. He also wants to ensure that the money he has to budget with is "fixed" and not have too much of it eaten up by fluctuating exchange rates or excessive commission charges. It seemed to me that the beauty of a prepaid card would be that he could leave most of his money safe in his UK bank account, take the card, loaded up with enough money to see him through his first few days or whatever, and top it up by SMS from his UK account as and when he needed more funds. I can see that for people of my/our age, there are many potentially more convenient alternatives, but am not sure they'd be the right choices for him. He'll have nothing to carry around or lose except for a pin-protected piece of plastic and enough cash for his immediate needs, and in the event he loses the card, he can get a new one fairly quickly at a small charge..

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I have just looked at these cards and one remarkably says 'free' for just about everything. The only thing it doesn't say is what exchange rate they give, because 'free' means nothing if the exchange rate is bad. They soon gobble up those 2.75% 's that the cards appear to charge, simply in the exchange rate if they are so inclined.

It all is down to the exchange rate here isn't it. You need to know what exchange rate they give and then you can if it is worth doing, his card may in theory look expensive, but at the end of the day he may get more $ to his £'s with his card.

That is what I would do.

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