How do you keep yourself and your family on a budget when you travel? Prepaid cards can be a good option but you’ll need to watch out for fees. Here are the best prepaid cards to consider and the fees you can expect to pay.
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When you’re planning a trip, most likely you’re thinking about the cost. After that, you’re probably wondering what the best card to use is so you can get the most points for your trip.
But here’s the problem with using a credit card while you’re traveling–You can end up going overboard (yes, pun intended) on your spending.
Trust me, I went to Turks & Caicos a few years ago, and there’s something about the beautiful weather, white sandy beaches, and crystal clear water that make you throw all caution to the wind when you’re ordering $10 drinks all day.
So I have an alternative option for you–Use a prepaid card.
Yep, they’re mainstream now, and for the right person and the right situation, they make a ton of sense for use while traveling. In this article, I’ll review some of the best prepaid travel cards options you can find. Let’s first start by recapping what a prepaid card is, in case you aren’t aware.
Overview: Best Prepaid Debit Credit Cards For Traveling.
|Netspend® Visa® Prepaid Card||Money management tools and a savings account||$9.95/month or $2 per use plus additional fees for reloading, ATM withdrawals and inactivity||Individual travelers|
|Green Dot 5% Cash Back Visa® Debit Card||5% cash back on purchases||$9.95/month, $1.95 per in store purchase, 3% foreign transaction fee, plus additional fees for reloading and ATM withdrawals||Use beyond traveling|
|FamZoo Prepaid Mastercard||Parental control on accounts||$5.99/month per family, 3% foreign transaction fee||Traveling families|
Not only is this one of the best prepaid cards for traveling, but it’s also one of the most popular overall prepaid cards. Beware, though, as it comes with some pretty hefty fees and it may not make sense if you’re using it for one trip.
The Netspend® Visa® Prepaid Card offers four different ways to load your card with cash: direct deposit, mobile check load, reload locations (over 130,000), and money transfers from other Netspend cardholders. That’s a huge value-add for someone who is traveling, as it makes it much easier to be able to get cash loaded onto your card wherever you are.
The card also comes with a mobile app that features tools to help you manage your money on a day-to-day basis. The app has all the features you’d expect with a typical banking app, such as transaction information and the ability to take a picture of a check to deposit it. When you access your account online, you get even more features, such as budgeting tools. You can also get transaction alerts via text and get up to a $10 “cushion” if you overspend on the card.
Netspend offers some perks as well, which you don’t tend to see often with prepaid cards. The card has Payback Rewards, which is cash back and personalized offers when you use your card. You can get balance boosts for referring friends, and Netspend even offers you a savings account with a healthy 5.00% APY on balances up to $1,000.
Finally, the card comes with some added peace of mind, offering zero fraud liability and the ability to create virtual card numbers for shopping online. You can even customize the look of your card, which is pretty cool.
One of the most significant downsides to this card is the cost to own and use it. First of all, it costs money to get one at the store (it’s free if you order it online). Most stores charge around $3 just for the card. By default, you’ll pay up to $2 every time you use the card. Instead, you can opt to pay the $9.95 monthly fee to use the card. There’s no way to eliminate this fee, but you can get it dropped to $5 per month if you have $500 in total direct deposits per month.
Some of the other bogus fees include a $3.95 fee to reload your card at Netspend locations, a $2.50 ATM cash withdrawal fee, and a $5.95 fee if you don’t use your card for three months (90 days). There are a few other fees attached to the card, so check out Netspend’s site to learn more.
- Four different ways to load your card
- Money management tools, both online and via the mobile app
- $10 buffer in case you overspend
- Payback Rewards
- Savings account
- Virtual card numbers
- Zero fraud liability
- Expensive to get if you don’t order it online
- Past PR issues that lead to a negative brand perception
- Costly fees
The Netspend® Visa® Prepaid Card has its flaws–primarily the costs–but it’s a great overall product. It has features that few other prepaid cards have, and the savings account option sets it apart. If you can get past the fees and use the card enough to justify it, then it’s an excellent choice for traveling abroad.
Another card that is sold in stores like CVS and Walmart, Green Dot has a couple of different options for prepaid cards. We felt their newer 5% Cash Back Visa® Debit Card was an excellent choice for travelers.
One of the impressive features of the Green Dot 5% Cash Back Visa® Debit Card is what the name says–cash back. When using the card, you’ll receive 5% back on your purchases, up to $100 annually. It may not seem like much, but when traveling, you’ll spend $2,000 in no time–hitting your max for cash back.
Green Dot also features what they call ASAP Direct Deposit. This feature allows you to get your paycheck up to two days earlier, depending on when Green Dot gets payment instructions from your employer. Also, they’re featuring a $5,000 Payday Bonus, where you register and are eligible to win if you make a purchase with your card. They pick a new winner every week.
For those who tend to receive their fair share of paper checks, you can deposit checks to your Green Dot card using your smartphone. Just download the Green Dot app, and you can take a picture of the check to be deposited directly to your card.
One of the unique features of this prepaid card, however, is the ability to order and write checks. For times when you can’t swipe your card, you can order checks directly from Green Dot–personalized with your information–so you can write them for things like rent or a payment to a contractor.
Like the Netspend card, the Green Dot card can be purchased in most stores for a small fee, but you can get it for free online. The monthly charge is $9.95, and it costs up to $1.95 to make a purchase in a store (it’s free online). You’ll pay up to $4.95 to reload your balance, $2.50 to withdraw cash at an ATM, and $5 if you need a replacement card. And since you’re looking to use it for travel, the foreign transaction fee is 3%.
- 5% cash back on purchases
- The ability to order and use paper checks
- Get your paycheck up to two full days early
- The monthly fee is high
- Foreign transaction fee can be substantial for expensive trips
- Cashback is very limited
You’ll find that all prepaid cards have serious pros and cons. The Green Dot 5% Cash Back Visa® Debit Card has its disadvantages (like most prepaid cards, it’s the fees), but it does give you some cash back. If you spend $2,000 in a year, 10 out of the 12 months you have the card are virtually wiped out from having a monthly fee (you’ll pay $120 per year in monthly fees, but can get up to $100 in cash back). The feature I like is the ability to get paper checks. It’s rare that most people will have to use these, but in the event you do, you don’t have to have a separate checking account to do so. Checks may also come in handy when traveling.
Okay, so FamZoo is a little bit of a different option when it comes to prepaid cards. I met the founder, Bill, at FinCon a few years ago and he’s incredibly passionate about his product. It’s also really in-depth with features, so I’m going to cover the highlights for you.
The primary goal of FamZoo is to teach kids about money and save time for busy families. But the product works great for traveling, especially with the family. FamZoo allows you to assign parent and child roles within the system of cards provided to you. This enables you as the parent to control the accounts and the money rules within them. This would be a nice feature if you wanted to send your kids off to go shopping while on vacation but wanted to limit their spending.
Some of the other convenience features include instant and scheduled transfers between cards, activity alerts (great for knowing what your kids are buying and where), the ability to lock and unlock cards, and purchase reimbursement.
On what FamZoo refers to as the “Financial Literacy” side of features, you’ll find a lot of beneficial tools. The first is Payment Checklists. I love this tool, as it gives you the ability to schedule tasks for the kids (or other cardholders) to do in exchange for money. You can also do this in reverse–meaning if they don’t complete the task they lose money. Imagine how busy you could keep your kids on vacation by establishing various Payment Checklists for them? You then split these payments into multiple accounts for them (savings, spending, etc.).
You can pay out interest to other cards and also set up a loan system–called IOUs. Growing up, my parents shelled out all kinds of money for ridiculous stuff for my sister and me while we were traveling. Instead of taking on the burden of purchases that will eventually end up at a garage sale, why not set up an IOU with your kids, so they have to work on paying you back?
As I said, FamZoo is loaded with features that most other prepaid cards don’t have, so check out their site for a full list of them.
If you pay monthly, FamZoo is $5.99 for the entire family (total, not per card). If you pay in advance, though, you can get up to a 58% discount, making it as low as $2.50 per month. There are no reload fees and no purchase fees when using the card in the United States. You will get tagged with up to a 3% foreign transaction fee if you use the card out of the country, however. There are also no fees for in-network ATM withdrawals (using the MoneyPass network). Out-of-network ATMs will get a fee, assessed by that individual operator. There are no inactivity fees, and replacing a card is also free until you get beyond the fourth family member–then it’s only $2. Overall, costs are incredibly cheap with this account.
- Inexpensive prepaid card option
- Ability to add family members and parent/child roles
- Loaded with features that other prepaid cards don’t have
- The mobile app feels outdated
- Can become overly-complicated with so many features
- Not a well-known card issuer (smaller issuers have folded in the past)
This might be my favorite prepaid card system. It’s more than just a prepaid card. It’s an entire financial ecosystem bottled up into a nice little package. While the control over money might seem… well, controlling, you’ll find it useful when you don’t have to keep giving your kids $20 bills or monitoring their spending on your credit card. Instead, just set them up with a FamZoo card and let them go nuts with whatever dollar amount you give them (and you can make them earn it with the Checklist feature). It does lack things like checks and a big name, but if you’ve got the whole family with you, I’d give the FamZoo Prepaid MasterCard a shot.
A prepaid card is similar to a debit card–only it’s not connected to any checking account. You sign up for the card, load it with cash, and use it like you would any other debit or credit card. Prepaid cards tend to be equally as secure to a credit or debit card since it’s protected by a signature or pin number at the time of purchase. Prepaid cards have their place, and are not an end-all solution for any financial situation. But for many circumstances, such as traveling, they play a critical role.
A prepaid card can come in handy while traveling on many levels. Since you preload the card with cash, you can use it for all your travel expenses–from booking the trip from your laptop to the margarita on your flight home.
It can be used like any other debit or credit card while you’re traveling, too. You’re able to pay for items and services in-person that accept that type of credit card (i.e., Visa, Mastercard, or American Express), withdraw cash at an ATM, or shop online (come on, you know you want that $150 bathing suit before your trip to Barbados).
It’s also great in the sense that you can plan out a set budget for your trip and stick to it. Prepaid cards are notoriously beneficial for budgeting since you literally cannot spend more than you’ve loaded onto the card. If you run out of money, you’re out. You’re not completely stuck, though–because you can transfer funds to most cards online or via phone from your checking account.
Concerning security, it also works for traveling. One of the concerns I have in using my debit card when traveling is that it’s connected to my checking account. If someone gets a hold of my card, they could empty my checking and savings. With a prepaid card, your exposure is limited to the dollar amount you transfer to the card.
This happened to a colleague of mine who was on his honeymoon using a debit card. Someone stole the card and wiped out every dime he had. He had to go through weeks of tedious phone calls and investigations before getting his money back. And sometimes it’s not even that easy.
Overall, a prepaid card is an exceptional tool for traveling, even if it’s to supplement your credit card. Some people also use it for specific parts of their trip–such as souvenirs or going out to eat. Even if you have a particular area you want to budget, it will help you spend less.
With most prepaid cards, you’re going to end up spending a little bit of money on fees, especially foreign transaction fees. Those are determined by Visa and Mastercard, not the prepaid card issuer. With that being said, you have three excellent options for prepaid traveling cards above, based on what you’re looking for.
If you are going on just a couple of trips and you can close out your account afterward, I’d go with the Netspend card. If you’re looking to use the card beyond just your trip and will need checks, go with Green Dot. Finally, if you have a family coming with you on your travels, definitely check out FamZoo.Topics: Travel