[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Saturday, 6 May 2006, 13:23 GMT 14:23 UK
A new way to pay when abroad

Pre-pay cards are the latest way to pay for things abroad and providers claim they are a convenient way to budget and avoid steep credit card charges.

Art Deco hotels in Miami
The cards have been designed specifically with travellers in mind

Travelex says its new Cash Passport is a hybrid between travellers cheques and a credit or debit card.

It is pre-paid, so travellers decide how much money they want to spend while away and load it all in advance with euros or dollars.

It certainly avoids people losing out when retailers convert their credit card purchases into pounds rather than charge in the local currency, known as Dynamic Currency Conversion.

The firm's Carole Harbord claims it is cheaper than using a credit card too.

"It does work out cheaper," she told BBC Radio 4's Money Box.

There is no surprise when you get home and find out what you have actually spent
Carole Harbord, Travelex

"We have looked very closely at the costs and this card has been specifically designed with travellers in mind, whereas credit and debit cards were designed with the domestic market in mind.

"And there is no surprise when you get home, open your bank statement and find out what you have actually spent," she added.

Using the card to withdraw cash costs 2.50 each time, but there is no fee added for any purchases. So for example, spending 25 euros costs exactly that.

Lost or stolen

Travelex is not the first company to offer this service. American Express, Western Union and CASH2GO have also launched similar products.

Simon Calder of the Independent has used similar cards before and he said that in some cases they can be extremely valuable.

"I had a bag stolen in Colombia by some villains who spent the next few days assiduously cleaning out my account," he told the programme.

It is when you start using it like a normal credit card or debit card when things get difficult
Simon Calder, The Independent

"With a pre-pay card this just could not happen. There is no access to your bank account and as with travellers cheques you get your money back if it is lost or stolen."

But he said the cards do have drawbacks: "It is when you start using it like a normal credit card or debit card when things get difficult."

"For example, I stayed in a hotel last night. I couldn't pay for my stay in advance with an American Express Travellers Cheque Card but I could pay for it there."

In conclusion he said: "It is certainly very good if you want to limit the amount that you spend but quite honestly, I think most of us will be happy taking our credit or debit cards."

BBC Radio 4's Money Box was broadcast on Saturday, 6 May 2006, at 1204 BST and repeated on Sunday, 7 May, at 2102 BST.



BBC NEWS: VIDEO AND AUDIO
The Independent newspaper's travel editor Simon Calder



Money Box


SEARCH MONEY BOX:
 

Podcast

Download or subscribe to this programme's podcast

Podcast Help



SEE ALSO:
Card customers face hidden costs
22 Apr 06 |  Moneybox


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific