According to Travelex, the card is a more secure way to deal with purchasing goods on holiday in comparison to the credit card.

The report carried out by Travelex reveals that more holiday makers are replacing their traveller’s cheques and credit cards for the pre-pay cards.

A Travelex official said- “Traveller’s cheques are still in use but the people are favouring pre-paid travel cards now. Security is so good with pre-pay cards, you can use them at the point of sale, you can draw money out at ATMs, so it’s just got as many advantages.”

Nationwide revealed that over £650 million was wasted by UK holiday makers on foreign currency usage fees last year.  

According to price comparison site, moneysupermarket.com, there is a strong support for pre-paid cards which may act as an alternative from credit and debit cards.

Moneysupermarket.com, do however, warn that there are negative effects of the pre paid card.

Although there are no interest charges, no risk of overdraft and no threat of building up debts, there is in fact an initial charge for getting the card. ATMs will also charge for withdrawals and some providers may charge top-up fees.

However, a number of industry officials have stated that in the current financial climate and the slowdown of the economy, these pre-paid cards can act as a good alternative. 

One official said- “While the strength of the euro is of concern to holiday makers, using the wrong foreign exchange product can be even more costly. If you are stuck with an uncompetitive debit or credit card and don’t have time to get a new one, pre-paid cards can be a good option. And you don’t need to worry about overspending on your holiday budget.”