The best UK prepaid cards for spending in Europe, Australia, USA, Canada, New Zealand, South Africa, Japan and more

Mastercard is to tackle a notorious rip-off where travellers are encouraged to pay with pounds but get a terrible exchange rate. Sadly, it will only apply to certain cards.

Next time you spend money abroad, you may be asked if you'd like to pay in pounds, instead of the local currency.

Sounds convenient, right?

Unfortunately not: by selecting pounds, you get a terrible exchange rate, making your purchase on average 7.7% more expensive, according to foreign exchange company FairFX.

You'll pay those exorbitant fees even if you have a top of the range travel credit card.

Now Mastercard is finally starting to crack down on 'dynamic currency conversion' on its currency cards. 

From 12 April, businesses around the world will have to process the transaction in the local currency.

This only applies to prepaid cards at present.

Mastercard claims that competition law prevents them from extending the conversion ban to Mastercard debit and credit cards, so the rip-offs will continue.

American Express and Visa haven't announced plans to restrict conversion and in fact, Visa was reportedly trying to make it easier last year.

Just remember, businesses can never force you to use dynamic currency conversion, so you should always opt for local currency.

In this article, we look at prepaid cards, how they work and which are the best.

Prepaid cards vs credit and debit cards

Years ago, a prepaid money card was one of the only ways to avoid rip-off conversion fees.

Nowadays, however, certain bank accounts or credit cards could be a better option - with some credit cards even paying cashback and providing Section 75 protection for big purchases.

Rates can be better, as they are more likely to use the Mastercard/Visa conversation rates (see below).

Plus you won't have the hassle of redeeming any unused money on your prepaid card; just make sure you pay off your credit card balance.

Click on the links above to see the options and compare them with the prepaid travel cards on offer.

The best fee-free credit cards to use abroad

Prepaid card comparison

Not all prepaid cards use the same exchange rate.

Most use their own rates, which can vary hugely and you should compare before getting the card.

Others use the Mastercard or Visa exchange rates, which are far better then what you'll get at a bank, Post Office, or foreign exchange bureau.

Even better is the 'interbank exchange rate' which is similar to the rate you'll see on Google. WeSwap claims to be better still by swapping your money with other travellers (see below).

You should also be wary of fees, particularly for ATM withdrawals as you're likely to need cash.

We've arranged this table firstly by ATM fees, then by the competitiveness of exchange rate (although this varies). Scroll down to see our verdict on individual cards.

*free if you withdraw £50+
**minimum - up to 1%
***minimum - up to 2%
****free if you withdraw £200+

Caxton FX Currency Card

The Caxton FX Currency Mastercard allows you to load money and hold a range of currencies on a single card.

There are 15 currencies available including euros, US dollars, Australian dollars, Canadian dollars, New Zealand dollars, Swiss franc, Japanese yen, Hungarian forint, Swedish krona, Polish zloty, Danish krone, Norwegian krone, South African rand and sterling.

You won't be charged any fees for overseas purchases or ATM withdrawals. However, you will need to load the cards with a minimum of either £50 or £100 if topping up via mobile.

There is a £1.50 redemption fee.

Travelex Money Card

This prepaid Mastercard allows you to load the card with up to 10 currencies including: euros, US dollars, Australian dollars, Turkish lira, Canadian dollars, New Zealand dollars, South African rand, Swiss francs, United Arab Emirates dirham and sterling.

It will pick the right currency for you, depending on where you are in the world, and if you don't have any funds in one particular currency it will draw funds (if they're available) from another. Be aware that doing this will incur a 5.75% fee each time though. 

There are no ATM or purchase fees for withdrawing or spending pre-loaded currency in an applicable destination, i.e. US dollars in the US. But the card does have an inactivity fee of £2 per month if it's not used for 12 months.

EasyJet Euro Currency Card

EasyJet has also got a prepaid card you could consider in the shape of the Euro Currency Visa Card.

Unfortunately, because it's a Visa prepaid card you don't get that protection from direct currency conversion.

You can get the card free if you load over £100. Loading under this amount will attract a £5.95 charge.

The minimum you can load is €60. ATM cash withdrawals and overseas card purchases are free of charge.

The card lasts five years. 12 months after expiry the card attracts £1 a month fee. Closing the account costs £10.

TransferWise Mastercard

You can hold 40+ currencies on this free card, including some lesser known options (Ukranian Hryvnia anyone?).

You can also get paid by people in the US, Europe and Australia without fees, making this an option for long term working holiday travellers.

The downside is a currency conversion fee every time you use the card, between 0.35% and 1%.

On the plus side, it uses the interbank exchange rate (except for rarer currencies) and you get free ATM withdrawals up to £200 a month, then 2%. The refund fee is low at just 65p.

FairFX Currency Cards

FairFX also offers three prepaid MasterCard currency cards – the Everywhere Card, the Euro Card, and the US Dollar Card.

The Euro and Dollar cards have their own FairFX exchange rate, which is generally pretty competitive. But to offset this there are some fees to consider.

The Euro and Dollar card don't have a fee for purchases abroad, but all three cards attract a fee for ATM cash withdrawals of €1.5/$2/£1 and on the Everywhere Card there is an additional 1.4% fee for purchases and withdrawals.

You get cashback on purchases on certain retailers in the UK if you use the card on your return. To redeem any leftover balance will cost you €5/$5/£5.

The best fee-free credit cards to use abroad

Virgin Money Travel Money MasterCard

The Virgin Prepaid Travel Money MasterCard allows you to load either euros or US dollars.

You’ll need to load a minimum of either €100 or $100 when you apply.

You can use the cards to make purchases for free in the currency specified. However, cash withdrawals attract either a €1.50 or $2 charge.

There are no inactivity, dormancy or initial fees to worry about. But there is a redemption fee of €7.50 or $10 which may apply.

WeSwap Currency Card

WeSwap claims it will get you better rates because it swaps your money with over travellers.

You can swap with around 20 currencies including the major currencies.

However, this Mastercard still has fees.

If you spend on the card whilst it has Sterling loaded, you'll incur a 2% fee. If you convert currency seven days in advance it costs 1%, or three days in advance for 1.3%.

There are ATM fees of £1.50 unless you withdraw over £200 and it has a refund fee of £5.

ICE Clear card

This Mastercard also allows you to load up to 10 currencies - the same as above.

It's free but it does charge £1.50 ATM fees, which could add up.

There's also a 5.75% charge for currency conversion and a £2 fee for not using your card in 12 months or £6 to cashout.

The best fee-free credit cards to use abroad

BA Executive Club / Avios Multi-Currency Cash Passport

The Multi-Currency Cash Passport available from British Airways Executive Club (previously Avios) allows you to load up on up to 10 different currencies: sterling, euros, Canadian dollars, US dollars, South African rand, Australian dollars, Turkish lira, Swiss franc, Emirati dirham and New Zealand dollars.

Its main attraction is that you collect 1 Avios for each £1 you own (for more on Avios, click here).

The downside is a £1.50 (or equivalent) ATM withdrawal fee that will almost certainly wipe out the value of any Avios you earn.

The minimum load/top up is £50. There is also an inactivity fee of £2 a month if you don’t use your card for 12 months but if you choose to redeem the card you’ll have to pay £6.

AA Travel Currency Cards

The AA offers Euro and Worldwide (Sterling) Travel Currency prepaid Mastercards.

The cards cost £9.95, but you get refunded if your first load is over £100. The minimum load is £10 or €10.

There are no transaction fees and no withdrawal fees if you withdraw £50/€50 or more (the withdrawal fee will be charged but then refunded to your account). If the withdrawal is less than these amounts, then you will be charged £1.50/€1.50 respectively.

A £1 a month dormancy fee will kick in if you don't use the card for 12 months. If you choose to close the card, there is a £10 redemption fee.

Post Office Travel Money Card

The MasterCard Post Office Travel Money Card (mentioned above) can be loaded with 13 currencies: sterling, euros, US dollars, Canadian dollars, Australian dollars, Croatian kuna, New Zealand dollars, Polish zloty, South African rand, Swiss francs, Thai baht, Turkish lira and UAE dirham.

Unfortunately, it has some pretty hefty fees.

All the cards have ATM withdrawal fees, which vary by the exact currency but are around £2.

There’s a minimum top-up of £50 no matter the currency and there’s a 3% charge if you use your card in a country other then those mentioned above. You'll have to pay a load fee if you opt for the sterling version, which is 1.5% (minimum of £3, maximum of £50).

You won’t be charged a fee on transactions unless you have gone for the sterling option which attracts a £1.50 fee.

The card lasts for four years and there is a £2 monthly maintenance fee which starts 12 months after your card expires. To close your account there is a £5 redemption fee.

The best fee-free credit cards to use abroad

Other things to bear in mind

It's worth noting that some of these cards will add a fee if you use a credit card as opposed to a debit card or bank transfer to load them.

You are also likely to be charged for using your card outside the currency it was intended for. If you think you’ll need more than one currency when you are away, go for a multi-currency option or a Sterling card.

Many of the cards also have a cancellation or redemption charge when you stop using the card and ask for it to be closed down and any money refunded to you. This ranges from £6 to £10 in most cases.

Prepaid cards are not designed for reserving hotels, rental cars or automated petrol pumps or toll booths.

This best buy round up is regularly updated