Prepaid Credit Cards: Helping You Stick to Your Holiday Budget

By Angela Monroe - December 13, 2019

How often have you been on holiday and overspent on your budget? It’s easy to do – the sun is shining, you’re feeling relaxed and you just want to enjoy yourself. Yet the financial holiday ‘hangover’ is a common feeling and it can take its toll on both you and your credit rating.

Prepaid credit cards have become increasingly popular for holiday spending. Often taking lots of cash isn’t a safe option when abroad or away from home, and your standard debit or credit cards are likely to charge you for use overseas – so prepaid credit cards can be an excellent alternative.

Understanding prepaid credit cards

You can use a prepaid card in the same way as your standard credit card – but you just have to make sure you have put the funds there in advance of the spending. This means that you can only spend what you have on the card. You have the option to top it up with extra funds whenever you need to.

One of the big advantages about using a prepaid credit card on holiday is that you can load them with different currencies – this means that you won’t have to budget for high fees or inflated exchange rates.

You don’t need to pass a credit check for most prepaid cards so they can be a really good option if you have bad credit. By showing responsible use of a prepaid card you may even help to boost your credit rating. 

Using prepaid credit cards

Being on holiday, it’s easy to forget about the realities of life back home. Yet you mustn’t forget your regular repayments; perhaps you’ve got a bad credit car loan or a personal loan that you took out recently to cover unexpected costs. Before you go on holiday, think carefully about your budget and what you can realistically spend whilst still ensuring you make all your standard repayments on time and in full.

Once you’ve loaded up your prepaid credit card, you can be sure that you’ll stick to your holiday budget. Although you’ve got the option to top up your funds, you’ll have to do this with far more awareness than a standard credit card where you can simply deal with the consequences when you’re home!

Using your prepaid credit card has a number of other advantages including:

  • You don’t need to carry around cash or worry about the security of where to keep it
  • If your card is stolen, you won’t have to worry about huge bills being wracked up
  • You won’t be charged foreign transaction fees as you would with a standard credit card
  • There is no need worry about charges on your card when withdrawing cash (or if you are charged, it will be at a lower rate than your standard credit card would be)
  • You could load up your prepaid card when the exchange rate for the currency you’re spending in is strong – this is especially useful if the rate dips whilst you’re away.

Don’t let bad credit ruin your holiday

If you have a bad credit rating or poor credit history, it shouldn’t mean you can’t enjoy your holiday. Take simple steps like using a prepaid card to ensure you don’t overspend whilst at the beach, and can only pay for what you can really afford. Sticking to a holiday budget is vital if you’ve got bad credit as you don’t want anything to jeopardise the repayments and financial obligations you need to fulfil back home.

Used properly, prepaid credit cards can not only help you to stick to your holiday budget and also improve your credit rating. You don’t have to have a credit check in order to get a prepaid credit card so why not see this as yet another step towards getting back on track and improving your bad credit score?

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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