UK holidaymakers are returning from trips abroad with a total of £438m sitting on pre-paid travel cards, according to research from Currensea. The latest data reveals that 15% of British travellers use pre-paid cards for their holiday spending money – more than 7.9m people across the UK, but only 15% spend all the money they topped up.
On average, travellers have £55.20 left on these cards once they've returned from their getaways, while more frequent travellers are returning with an average of £96. These funds are at risk of being forgotten about if they're not immediately withdrawn and unfortunately, withdrawals are often hit with fees or poor foreign exchange rates.
Younger travellers are at particular risk of losing out as one in five 18-34 year olds return with more than £100 still on cards, compared to 14% of 35-54 year olds. Almost two thirds of pre-paid card users claim they use it because it is convenient, despite having to top up from your bank account before travel.
Read more:
Yet, over a third mistakenly believe that these pre-paid cards offer better foreign exchange rates on overseas transactions, with 26% of travellers opting for this option as they thought they could save money. The research also reveals that over a fifth of travellers still persist with cash for 100% of their holiday spending.
However, if they run out of money they face high fees from withdrawing cash from overseas ATMs or from currency exchange shops, reports Hull Live. Currensea is a travel debit card which uses open banking technology to allow people to spend directly from their existing current account when abroad.
James Lynn, Co-Founder of Currensea, said: “UK travellers are sitting on a huge stockpile of unused spending money. Many will have worked and saved extremely hard to enjoy their first overseas holiday since the pandemic but risk wasting huge amounts in foreign exchange fees if they aren’t savvy with how they get their holiday money.
“Too many people still believe that pre-paid cards offer the best solution when spending money abroad. They used to be seen as more secure – as if you lost your pre-paid card, you only lost the amount you topped up – however, banks and other financial providers have caught up.
"If you lose your bank card abroad, you can usually simply freeze it, meaning that the biggest advantage pre-paid cards may have had historically is no longer relevant. It’s a guessing game trying to figure out how much money you’ll need with many overestimating their spend.
"Whilst travellers can withdraw what is left on their pre-paid cards once they return from holiday, many are likely to forget the high fees they’ll face mean that it’s not worth exchanging. Unfortunately, many of these cards simply get stuck in a drawer at home and travellers are losing huge sums.”
