What are the disadvantages of using a prepaid travel card abroad?

Disadvantages of Using a Prepaid Travel Card Abroad

While prepaid travel cards offer convenience and security, they can also come with hidden costs that can diminish their value. Here are some of the disadvantages of using a prepaid travel card abroad:

Transaction Fees:

• Foreign transaction fees: Many prepaid travel cards charge a fee for transactions made in a currency other than the card’s base currency. This fee can range from 1% to 3% of the transaction amount and can add up quickly.
• Purchase fees: Some cards charge an additional fee for each purchase made, regardless of the currency used. This fee can be a flat rate or a percentage of the transaction amount.

ATM Withdrawal Charges:

• ATM withdrawal fees: Prepaid travel cards typically charge a fee for withdrawing cash from ATMs abroad. This fee can range from $2 to $5 per withdrawal and can also include a percentage of the withdrawn amount.

Inactivity and Balance Return Fees:

• Inactivity fees: Some prepaid travel cards charge a monthly or annual fee if the card is not used for a certain period of time. This fee can diminish the value of the card if it is not used frequently.
• Balance return fees: When returning the remaining balance on a prepaid travel card, some cards charge a fee for this service. This fee can reduce the amount of money you receive back.

Additional Considerations:

• Exchange rates: Prepaid travel cards often have less favorable exchange rates compared to credit cards or exchange bureaus. This means you may get less money for your local currency when reloading your card.
• Limited acceptance: Prepaid travel cards may not be accepted everywhere, especially in smaller businesses or remote areas. It’s important to check if the card is widely accepted in your destination before relying solely on it.
• Security risks: Prepaid travel cards are not as secure as credit cards in case of theft or fraud. If your card is stolen or lost, you may not be able to recover the remaining balance.

Overall, while prepaid travel cards can offer some advantages, it’s crucial to be aware of the potential disadvantages and hidden costs associated with their use abroad. By understanding these fees and limitations, you can make an informed decision about whether a prepaid travel card is the right choice for your travel needs.