Prepaid Credit Cards: Debit is Better

Prepaid credit cards meant for travel like American Express Travelers Cheque Cards and Visa TravelMoney cards may not be worth the fees associated, according to news reports. Proponents say advantages exist because the cards are not connected toa checking account, but I believe that student travelers with a parent at home to help with checking account deposits shouldn't have a problem traveling with debit cards.

The Seattle Times reported back in September that travelers were experiencing difficulty using the Amex card and that fees for both card types were fairly steep.

Depending on the issuing bank, debit cards frequently have less fees associated than the prepaid credit cards, according to the Times, and the prepaid travel creidt cards are not as easily replaceable as traveler's checks.

Hopes were high that the new Masteracrd prepaid travel cards, launching soon, would be less expensive to use, but NewYorkBusiness.com reports that the fees will be discouragingly similar: "Typically a consumer pays an initial fee to get the card, a fee to reload the card with money, a fee to use the card at an ATM, and a fee to convert currency on purchases or withdrawals made with the card in other countries," writes reporter Mary Sisson.

The prepaid travel cards may work well for students without the credit scores to score a credit card, but so will a debit card, which looks just look like a credit card (meaning they're quite universally accepted) and cost a whole lot less.