Pre Paid Travel Cards - Exchange Rate Used?

GSP

When you load dollars onto the card, what exchange rate is used?
Is this the same rate the company would be offering on the day if you bought cash dollars, or is another rate triggered perhaps less favourable?
Thanks 

eskbanker

You'd need to check the Ts & Cs of the card you have in mind.

Mark_d

There are lots of pre-paid cards.  Some hold the balance in GBP and do the conversion when you spend.  Some cards hold the balance in USD or EUR - and these tell you the conversion rate at the times when you top up the card.
Why do you want a pre-paid card?  There are alternative ways of getting foreign currency or making foreign purchases.

eDicky

If you identify the exchange company and card that you're referring to it should be possible to compare the current rates for card loading and cash purchase - but then, you could do this for yourself...

GSP

Mark_d said:

There are lots of pre-paid cards.  Some hold the balance in GBP and do the conversion when you spend.  Some cards hold the balance in USD or EUR - and these tell you the conversion rate at the times when you top up the card.
Why do you want a pre-paid card?  There are alternative ways of getting foreign currency or making foreign purchases.

We ‘normally’ use our credit card paying in the local currency.
It was the Post Office a couple of weeks back who made us aware of these cards. As I try to get familiar with these, one question I can’t find the answer for is say if you can buy dollars over the counter at say 1.2852, would that be the rate used if you transacted and loaded the card at the same time?

GSP

I found this in the PO’s terms & conditions.
”Rate of exchange means the rate as determined by Mastercard to perform a currency conversion when a transaction is conducted in a currency other than the one available on the card. The rate of exchange is variable and will be applied to the transaction on the date the transaction is charged to your account”.

If reading right, to me you are still exposed to currency fluctuations on a daily basis. If you bought dollars in cash before you went on holiday, that’s it you have your rate. Also, it says ‘determined by Mastercard’s currency conversion’. So just what is that as my sceptical mind thinks that rate will be worse than buying dollars over the counter? 

GSP

eskbanker said:

You'd need to check the Ts & Cs of the card you have in mind.

I found this in the PO’s terms & conditions.
”Rate of exchange means the rate as determined by Mastercard to perform a currency conversion when a transaction is conducted in a currency other than the one available on the card. The rate of exchange is variable and will be applied to the transaction on the date the transaction is charged to your account”.

If reading right, to me you are still exposed to currency fluctuations on a daily basis. If you bought dollars in cash before you went on holiday, that’s it you have your rate. Also, it says ‘determined by Mastercard’s currency conversion’. So just what is that as my sceptical mind thinks that rate will be worse than buying dollars over the counter? 

daveyjp

In the grand scheme of things currency fluctuations over the course of a few weeks holiday aren't worth losing sleep over.

The PO has to make money providing those cards and you pick up the bill which is why they are now not the option for MSE holiday makers.  Forex free debit and credit cards are the way to go.

GSP

Oops, I haven’t read that properly. “ in a currency other than the one available on the card”. I would have already loaded in dollars, so this would not apply! 

eDicky

Is your objective to:

a) Buy your US dollars in advance at a rate 'locked in' at that time, regardless of how good that rate is compared to the current mid-market rate.

b) Or, find and use the overall simplest and most cost effective way of spending in USD during your trip.

If b), forget about the Post Office Travel Money Card and similar prepaid card products from travel agents and supermarkets.

I see that the PO give no information on their website about rates used for loading foreign currency on the card, in order to compare it with the current mid-market rate. I expect it will cost ~3%, and much worse to exchange any leftover currency back to GBP.

Instead, obtain and use debit/credit cards that convert your pounds at the time of transaction using ideal rates with no fees.

https://www.moneysavingexpert.com/credit-cards/travel-credit-cards/#debit

If a), consider opening an account with Wise, you can buy dollars etc in advance at the perfect mid-market rate (of that moment) with a transparent and relatively modest % fee, then use their debit card to spend.

https://wise.com

Never rely on only one source of funds when traveling.

Neil49

If you are travelling to the USA and have a requirement for dollar bills then the Chase debit card account is a good option as you can use their ATMs free of commission charges. Check that they have branches in the states you are visiting. 

The conversion rate from £ to USD's Is also very good.

As always, don't just rely on one card. A Halifax Clarity credit card is a good option.