Recent Trends In Card Technology: Pre-paid Cards

These have been around for a couple of years now, and are becoming increasingly popular, with new products hitting the market every week. Visit MoneySupermarket.com, for example, and you will find dozens of this type of card to choose from.  They are marketed as a cost-effective alternative to using credit and debit cards abroad and a way of avoiding excessive bank charges for foreign exchange. They are typically available as Dollar Cards, Euro Cards, Sterling Cards, as well as in many other currencies.

The main advantage of the pre-paid card is that it allows you to manage foreign cash on your account whilst travelling abroad, via your mobile phone or the Internet. You can load cash onto the card, check your balance, top it up, make payments withdraw cash from ATM both at home and overseas. Some can also be topped up at the Post Office, making it a handy option for anyone without a Bank Account.        

As well as regular travelers and holiday-makers, they are a particularly good option for under-18s, gap-year students and other young travellers, offering a way to learn to handle money responsibly, without carrying a lot of cash or borrowing a credit card from a begrudging parent. Another advantage for the young globe-trotter is the ability to track spending online or via their mobile.

Most cards have the option of a secondary card, so the principal card-holder can share funds with their spouse or children in a secure and controlled manner. As you can spend what is loaded on the card, and no more, there is no risk of Junior going crazy with Dad’s credit card, as well as no risk of losing a wad of cash.  In fact all those of you who need to limit and control your spending should consider using a pre-paid card: no nasty shocks and big credit bills after you return from your holiday! They are also a boon for anyone with a poor credit rating, as no credit checks are required when applying for a pre-paid card.

          

Amex/ICICI Bank (India’s 2^nd-largest bank) have recently launched a new card targeting business people as well as holiday-makers.  According to the press release:-

The new card is aimed at the fast-expanding customer segment of discerning travelers who have frequent travel schedules for both business and leisure

Added benefits on offer include a 24x7 customer hotline, an international toll-free number, travel insurance, emergency travel and medical assistance, and access to the numerous offers from over 10,000 merchant participating in the Amex Selects program in more than 76 countries.

I used one (Caxton FX) on a recent holiday in France, and found that it was a cheaper option than resorting to my usual debit card. For those of us, like me, with the memory and attention span of a gnat, however, it may prove challenging to remember yet another PIN number, as well as Internet account login and password details. It certainly saved me the worry of losing cash, but introduced a clutch of new things to worry about…what if I lose my mobile, what if I lose my laptop, what if there is no Internet café in the rural South of France? But admittedly, that may just be me. In reality the only problem I experienced was a bit of faffing about with my mobile when travelling in rural areas with poor reception.

My better half had a different card and wasn’t so happy with the service from his provider: endless problems trying to top up the card and check the balance; the contact number he had been given just didn’t seem to work. When we got back we found - on a different page of the website - something that said that the contact number may not work outside of western Europe, and a full-length alternative number. It would have helped if that had been on the same page as the general instructions. Although last time I looked, France WAS in western Europe.

If you decide to go down the pre-paid route, make sure you watch out for other pitfalls, like activation fees, monthly fees, statement fees, inactivity penalties and reduced legal safeguards for lost or stolen cards.